Vanguard Natural Resources, Inc. - FORM 8-K/A - EX-99.4 - SUMMARY PRO FORMA COMBINED NATURAL GAS, OIL AND NATURAL GAS LIQUIDS RESERVE DATA OF VANGUARD NATURAL RESOURCES, LLC AS OF DECEMBER 31, 2011 - July 13, 2012

Attached files

file filename
8-K/A - Vanguard Natural Resources, Inc.form8-ka.htm
EX-23.1 - CONSENT OF KPMG LLP - Vanguard Natural Resources, Inc.exhibit23-1.htm
EX-23.2 - CONSENT OF DEGOLYER AND MACNAUGHTON, INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS - Vanguard Natural Resources, Inc.exhibit23-2.htm
EX-99.2 - ANTERO RESOURCES CORPORATION UNAUDITED FINANCIAL STATEMENTS AND THE NOTES THERETO FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011 - Vanguard Natural Resources, Inc.exhibit99-2.htm
EX-99.1 - ANTERO RESOURCES CORPORATION FINANCIAL STATEMENTS AND THE NOTES THERETO FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 2011, 2010, AND 2009 - Vanguard Natural Resources, Inc.exhibit99-1.htm
EX-99.3 - UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION OF VANGUARD NATURAL RESOURCES, LLC AS OF MARCH 31, 2012 AND FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND FOR THE YEAR ENDED DECEMBER 31, 2011 - Vanguard Natural Resources, Inc.exhibit99-3.htm
  Exhibit 99.4
Summary Pro Forma Combined
Natural Gas, Oil and Natural Gas Liquids
 Reserve Data
 
 
The following tables set forth summary pro forma information with respect to Vanguard's pro forma combined estimated net proved and proved developed natural gas, oil and natural gas liquids reserves as of December 31, 2011. This pro forma information gives effect to the ENP Merger, the Permian Basin Acquisition I and the Arkoma Basin Acquisition as if they occurred on January 1, 2011. Future exploration, exploitation and development expenditures, as well as future commodity prices and service costs, will affect the reserve volumes attributable to the acquired properties and the standardized measure of discounted future net cash flows.
 
 Estimated changes in the quantities of natural gas, oil and natural gas liquids reserves for the year ended December 31, 2011 are as follows:

 
Gas (in Mcf)
  
 
Vanguard historical
    
Permian Basin Acquisition I
    
Arkoma Basin Acquisition
    
Pro forma Adjustments
    
Vanguard
pro forma combined (d)
  
Net proved reserves
                            
January 1, 2011 (a)
153,942,674
    
30,424,000
    
823,000,000
    
—
    
1,007,366,674
  
Revisions of previous estimates
(9,154,293
)
  
(21,965,443
)
  
(288,000,000
)
  
(250,645,406
)
(b)
(569,765,142
)
Extensions, discoveries and other
324,868
    
—
    
92,000,000
    
—
    
92,324,868
  
Purchases of reserves in place
28,202,483
    
—
    
—
    
(7,497,000
)
(c)
20,705,483
  
Sales of reserves in place
(72,996
)
  
—
    
(1,000,000
)
  
—
    
(1,072,996
)
Production
(10,413,161
)
  
(961,557
)
  
(33,000,000
)
  
—
    
(44,374,718
)
December 31, 2011
162,829,575
    
7,497,000
    
593,000,000
    
(258,142,406
)
  
505,184,169
  

 
Oil (in Bbls)
  
 
Vanguard historical
    
Permian Basin Acquisition I
    
Arkoma Basin Acquisition
    
Pro forma Adjustments
    
Vanguard
pro forma combined (d)
  
Net proved reserves
                            
January 1, 2011 (a)
38,120,869
    
64,000
    
—
    
—
    
38,184,869
  
Revisions of previous estimates
4,823,593
    
560,388
    
—
    
38,688
  
(b)
5,422,669
  
Extensions, discoveries and other
91,713
    
—
    
—
    
—
    
91,713
  
Purchases of reserves in place
4,577,786
    
—
    
—
    
(566,000
)
(c)
4,011,786
  
Sales of reserves in place
(85,086
)
  
—
    
—
    
—
    
(85,086
)
Production
(2,725,852
)
  
(58,388
)
  
—
    
—
    
(2,784,240
)
December 31, 2011
44,803,023
    
566,000
    
—
    
(527,312
)
  
44,841,711
  

 
Natural Gas Liquids (in Bbls)
  
 
Vanguard historical
    
Permian Basin Acquisition I
    
Arkoma Basin Acquisition
    
Pro forma Adjustments
    
Vanguard
pro forma combined (d)
  
Net proved reserves
                            
January 1, 2011 (a)
5,507,991
    
1,622,000
    
12,000,000
    
—
    
19,129,991
  
Revisions of previous estimates
(71,861
)
  
683,141
    
(2,000,000
)
  
188,543
  
(b)
(1,200,177
)
Extensions, discoveries and other
—
    
—
    
2,000,000
    
—
    
2,000,000
  
Purchases of reserves in place
2,380,284
    
—
    
—
    
(2,158,000
)
(c)
222,284
  
Production
(431,550
)
  
(147,141
)
  
—
    
—
    
(578,691
)
December 31, 2011
7,384,864
    
2,158,000
    
12,000,000
    
(1,969,457
)
  
19,573,407
  
 
(a)  
Includes the non-controlling interest in the Encore reserves of approximately 53.3% at January 1, 2011.
(b)  
Represents the change in Vanguard’s estimated proved reserves compared to Antero’s estimated proved reserves on properties acquired in the Arkoma Basin Acquisition. The significant decrease in estimated proved natural gas reserves is related to locations where Vanguard does not plan to undertake development activities.
(c)  
To adjust the amount of purchases of reserves representing the Permian Basin I Acquisition during 2011 included in Vanguard’s historical information. The pro forma effect of this acquisition is presented separately in the table above.
(d)  
Includes Vanguard’s, the Permian Basin Acquisition I’s and Arkoma Basin Acquisition’s estimated net proved and proved developed oil, natural gas and natural gas liquids reserves as of December 31, 2011.

 
   
Vanguard historical
    
Arkoma Basin Acquisition
    
Pro forma adjustment (a)
    
Vanguard
 pro forma combined (b)
  
Estimated proved reserves:
                        
Natural Gas (Mcf)
     162,829,575       593,000,000       (250,645,406 )     505,184,169  
Oil (Bbls)
     44,803,023       —       38,688       44,841,711  
Natural Gas Liquids (Bbls)
     7,384,864       12,000,000       188,543       19,573,407  
BOE
     79,326,150       110,833,333       (41,547,003 )     148,612,480  
                                 
Estimated proved developed reserves:
                                
Natural Gas (Mcf)
     131,476,797       226,000,000       (3,483,578 )     353,993,219  
Oil (Bbls)
     40,090,104       —       38,688       40,128,792  
Natural Gas Liquids (Bbls)
     6,173,060       2,000,000       1,140,685       9,313,745  
BOE
     68,175,964       39,666,667       598,776       108,441,407  
 
(a)  
Represents the change in Vanguard’s estimated proved reserves compared to Antero’s estimated proved reserves on properties acquired in the Arkoma Basin Acquisition. The significant decrease in estimated proved natural gas reserves is related to locations where Vanguard does not plan to undertake development activities.
(b)  
Includes Vanguard’s, the Permian Basin Acquisition I’s and Arkoma Basin Acquisition’s estimated net proved and proved developed oil, natural gas and natural gas liquids reserves as of December 31, 2011.

The standardized measure of discounted future net cash flows relating to the combined proved oil, natural gas and natural gas liquids reserves at December 31, 2011 is as follows (in thousands):
 
   
Vanguard
historical
    
Arkoma Basin Acquisition
    
Pro forma adjustment (a)
    
Vanguard
pro forma 
combined (b)
    
Future cash inflows
   $ 5,102,442     $ 2,357,000     $ (1,087,864 )   $ 6,371,578  
Future production costs
     (1,701,143 )     (483,000 )     146,595       (2,037,548 ) 
Future development costs
     (143,156 )     (664,000 )     429,175       (377,981 ) 
Future net cash flows before income tax
     3,258,143       1,210,000       (512,094 )     3,956,049  
Future income tax expense
     —       (131,000 )     131,000       —  
Future net cash flows
     3,258,143       1,079,000       (381,094 )     3,956,049  
10% annual discount for estimated timing of cash flows
     (1,781,910 )     (694,000 )     258,290       (2,217,620 ) 
Standardized measure of discounted future net cash flows
   $ 1,476,233     $ 385,000     $ (122,804 )   $ 1,738,429  
 
(a)  
Represents the reduction in future net cash flows and discounted future net cash flows relating to the properties acquired in the Arkoma Basin Acquisition primarily related to locations where Vanguard does not plan to undertake development activities. The adjustments also include the elimination of future tax expense since Vanguard is not a taxable entity.
(b)  
The pro forma standardized measure includes Vanguard, the Permian Basin Acquisition I and Arkoma Basin Acquisition.

For the December 31, 2011 calculations in the preceding table, estimated future cash inflows from estimated future production of proved reserves were computed using the average oil and natural gas price based upon the 12-month average price of $79.43 per barrel of crude oil and $4.45 per MMBtu for natural gas, adjusted for quality, transporation fees and a regional price differential. For the Arkoma Basin Acquisition, estimated future cash inflows from estimated future production of proved reserves were computed using based upon a 12-month weighted average price of $3.90 per Mcfe. We may receive amounts different than the standardize measure of discounted cash flow for a number of reasons, including price changes and the effects of our hedging activities.
 
The following are the principal sources of change in the combined standardized measure of discounted future net cash flows for the year ended December 31, 2011 (in thousands):

   
Vanguard historical
    
Permian Basin Acquisition I
    
Arkoma Basin Acquisition
    
Pro forma Adjustments
      
Vanguard 
pro forma
combined (b)
  
Sales and transfers, net of production costs
$
(220,277
)
$
(18,796)
  
$
(75,000
)
$
—
    
$
 (314,073
)
Net changes in prices and production costs
  
325,906
    
—
    
 (52,000
)
  
—
      
273,906
  
Extensions discoveries and improved recovery, less related costs
  
3,665
    
—
    
65,000
    
—
      
68,665
  
Changes in estimated future development costs
  
(8,283
)
  
—
    
(43,000
)
  
—
      
(51,283
)
Previously estimated development costs incurred during the period
  
34,096
    
—
    
40,000
    
—
      
74,096
  
Revision of previous quantity estimates
  
70,777
    
—
    
(199,000
)
  
—
      
    (128,223
)
Accretion of discount
  
111,845
    
—
    
60,000
    
—
      
171,845
  
Purchases of reserves in place
  
214,225
    
—
    
—
    
(56,247
)
(c)
  
     157,978
  
Sales of reserves in place
  
(2,707
)
  
—
    
(1,000
)
  
—
      
(3,707
)
Net change in income taxes
  
—
    
—
    
90,000
    
—
      
90,000
  
Change in production rates, timing and other
  
(171,462
)
  
(7,678
)
  
17,000
    
(122,804
)
(d)
  
(284,944
)
Net change in standardized measure
  
   357,785
    
(26,474
)
  
(98,000
)
  
(179,051
)
    
54,260
  
Standardized measure, January 1, 2011(a)
  
  1,118,448
    
82,721
    
483,000
    
—
      
  1,684,169
  
Standardized measure, December 31, 2011
$
1,476,233
  
$
56,247
  
$
385,000
  
$
(179,051
)
  
$
1,738,429
  


(a)  
The standardized measure includes approximately $596.1 million attributable to the non-controlling interest of ENP as of December 31, 2010.
(b)  
The pro forma standardized measure includes Vanguard, the Permian Basin Acquisition I and Arkoma Basin Acquisition.
(c)  
To adjust the amount of purchases of reserves representing the Permian Basin I Acquisition during 2011 included in Vanguard’s historical information. The pro forma effect of this acquisition is presented separately in the table above.
(d)  
Represents the change in estimates relating to the properties acquired in the Arkoma Basin Acquisition primarily related to locations where Vanguard does not plan to undertake development activities.

Vanguard Natural Resources, Inc. Reports