Attached files
| file | filename |
|---|---|
| 8-K/A - Vanguard Natural Resources, Inc. | form8-ka.htm |
| EX-99.1 - Vanguard Natural Resources, Inc. | exhibit99-1.htm |
EXHIBIT
99.2
Vanguard
Natural Resources, LLC and Subsidiaries
Unaudited
Pro Forma Consolidated Balance Sheet
The
Company acquired certain producing natural gas and oil properties and related
assets and liabilities from Private Sellers on December 2, 2009, with an
effective date of October 1, 2009. The following pro forma
consolidated balance sheet has been prepared to reflect the acquisition as if it
occurred on September 30, 2009. Additionally, the following pro forma
consolidated balance sheet includes the effects of the Company’s borrowings
under the Company’s reserve-based credit facility used in order to initially
finance the acquisition. Furthermore, the following pro forma consolidated
balance sheet also includes the effects of the Company’s public equity offering
of 2.3 million common units completed on December 4, 2009 which was used to
reduce borrowings under the reserve-based credit facility. This unaudited pro
forma balance sheet has been prepared for comparative purposes only and may not
reflect what would have occurred if the Company had completed the acquisition at
an earlier date. This pro forma balance sheet should be read in conjunction with
the audited December 31, 2008 and unaudited September 30, 2009 consolidated financial statements of
Vanguard Natural Resources, LLC. Pro forma statements of
operations have not been provided as the use of forward-looking information
regarding the revenues and expenses of the acquired natural gas and oil
properties, as reorganized under new derivative contracts, our company
structure, and management, would be necessary to meaningfully present the
effects of the acquisition.
Vanguard
Natural Resources, LLC and Subsidiaries
Unaudited
Pro Forma Consolidated Balance Sheet
As
of September 30,
(in thousands)
|
Vanguard
Historical
|
Pro
Forma
|
Vanguard
Pro
Forma
As
Adjusted
|
|||||||
|
2009
|
Adjustments
|
2009
|
|||||||
|
Assets
|
|||||||||
|
Current
assets
|
|||||||||
|
Cash
and cash equivalents
|
$
|
2,046
|
49,500
(55,021)
|
(a)
(c)
|
$
|
(3,475)
|
|||
|
Trade
accounts receivable, net
|
5,410
|
5,410
|
|||||||
|
Derivative
assets
|
19,516
|
19,516
|
|||||||
|
Other
receivables
|
2,912
|
2,912
|
|||||||
|
Other
currents assets
|
766
|
25
|
(c)
|
791
|
|||||
|
Total
current assets
|
30,650
|
(5,496)
|
25,154
|
||||||
|
Natural
gas and oil properties, at cost
|
341,898
|
56,347
|
(c)
|
398,245
|
|||||
|
Accumulated
depletion
|
(175,493)
|
(175,493)
|
|||||||
|
Natural
gas and oil properties, net – full cost method
|
166,405
|
56,347
|
222,752
|
||||||
|
Other
assets
|
|||||||||
|
Derivative
assets
|
6,850
|
6,850
|
|||||||
|
Deferred
financing costs
|
3,301
|
3,301
|
|||||||
|
Other
assets
|
1,627
|
1,627
|
|||||||
|
Total
assets
|
$
|
208,833
|
50,851 |
$
|
259,684
|
||||
|
Liabilities
and members’ equity
|
|||||||||
|
Current
liabilities
|
|||||||||
|
Accounts
payable – trade
|
$
|
611
|
— |
$
|
611
|
||||
|
Accounts
payable – natural gas and oil
|
1,525
|
1,525
|
|||||||
|
Payables
to affiliates
|
866
|
866
|
|||||||
|
Deferred
swap liability
|
997
|
997
|
|||||||
|
Derivative
liabilities
|
29
|
29
|
|||||||
|
Phantom
unit compensation accrual
|
3,034
|
3,034
|
|||||||
|
Accrued
ad valorem taxes
|
1,591
|
1,591
|
|||||||
|
Accrued
expenses
|
344
|
344
|
|||||||
|
Total
current liabilities
|
8,997
|
—
|
8,997
|
||||||
|
Long-term
debt
|
123,500
|
49,500
(40,252)
|
(a)
(b)
|
132,748
|
|||||
|
Derivative
liabilities
|
2,801
|
2,801
|
|||||||
|
Deferred
swap liability
|
2,075
|
2,075
|
|||||||
|
Asset
retirement obligations
|
4,133
|
248
|
(c)
|
4,381
|
|||||
|
Total
liabilities
|
141,506
|
9,496
|
151,002
|
||||||
|
Commitments
and contingencies
|
|||||||||
|
Members’
equity
|
|||||||||
|
Members’
capital, 16,078,673 pre-equity offering and 18,416,173
post-equity offering common units issued and outstanding at
September 30, 2009
|
67,409
|
40,252
1,103
|
(b)
(c)
|
108,764
|
|||||
|
Class
B units, 420,000 issued and outstanding at September 30,
2009
|
6,045
|
6,045
|
|||||||
| Other comprehensive loss | (6,127) | (6,127) | |||||||
|
Total
members’ equity
|
67,327
|
41,355
|
108,682
|
||||||
|
Total
liabilities and members’ equity
|
$
|
208,833
|
50,851 |
$
|
259,684
|
||||
See
notes to unaudited pro forma consolidated balance sheet
Vanguard
Natural Resources, LLC and Subsidiaries
Notes
to Unaudited Pro Forma Consolidated Balance Sheet
|
(a)
|
To
record the initial financing of the acquisition with borrowings under the
Company’s reserve-based credit
facility.
|
|
(b)
|
To
record the public equity offering of 2.3 million common units completed on
December 4, 2009, the proceeds of which were used to reduce borrowings
under the reserve-based credit
facility.
|
|
(c)
|
To
record the acquisition of certain producing natural gas and oil
properties, prepaid ad valorem tax for the month of December 2009 ($0.03
million asset) and asset retirement obligation ($0.2 million liability)
associated with the natural gas and oil properties
acquired.
|
Total
cash consideration was $55.0 million. The measurement of the fair value at
acquisition date of the assets acquired as compared to the fair value of
consideration transferred, adjusted for purchase price adjustments, resulted in
a gain of $1.1 million, calculated in the following table. The gain resulted
from the changes in natural gas and oil prices used to value the
reserves.
|
(in
thousands)
|
||||
|
Fair
value of assets and liabilities acquired:
|
||||
|
Natural
gas and oil properties
|
$ | 56,347 | ||
|
Other
current assets
|
25 | |||
|
Asset
retirement obligations
|
(248 | ) | ||
|
Total
fair value of assets and liabilities acquired
|
56,124 | |||
|
Fair
value of consideration transferred
|
55,021 | |||
|
Gain
on acquisition
|
$ | 1,103 | ||