Vanguard 3Q Report Notes Divestitures, Lower Net Loss

November 16, 2018

 

Vanguard Natural Resources reports the third quarter closing of divestitures as it notes a net loss to Common Stockholders of $32.1 million, down from a $57.8 million net loss in the second quarter of 2018.

Houston-based Vanguard said the 3Q net loss was attributable to “higher revenues due to higher average realized natural gas and NGLs prices combined with a decrease in losses on commodity derivative contracts (realized and unrealized).

“We also had lower LOE and lower impairment expense, offset by a lower gain on divestitures compared to second quarter.”

And the adjusted Net Loss Attributable to Common Stockholders was $22.8 million in the third quarter of 2018 compared to Adjusted Net Loss of $25.2 million in the second quarter of 2018.

“The Adjusted Net Loss for the third quarter of 2018 included adjustments for net non-cash expenses of $8.2 million primarily comprised of a $2.0 million impairment charge on our oil and natural gas properties and a $8.0 million loss from the change in fair value of commodity derivative contracts, offset by a $1.7 million net gain on asset sales,” the company stated.

 

Key Highlights of Vanguard’s 3Q Statement:

  • Closed four divestitures for aggregate gross proceeds of $30.9 million, including its Potato Hills assets in Oklahoma which closed for gross proceeds of $22.9 million, interests in over 145 wells in Texas and Louisiana for gross proceeds of $5.5 million, and interests in five wells and associated undeveloped acreage in the DJ Basin in Colorado for gross proceeds of $2.6 million
  • Additionally, the Company entered into a purchase and sale agreement for the sale of its ownership in natural gas properties in the Arkoma basin of Arkansas in mid-September, which comprise all of its interests located in the state. The sale closed on October 15, 2018 for a total contract price of $12.0 million
  • Reported production volumes of 330 million cubic feet equivalent (MMcfe) per day
  • Lease operating expenses were $35.4 million
  • Selling, general and administrative expenses (excluding non-cash compensation and severance costs) were $9.6 million
  • Continued success in the oil-prone Red Lake area of New Mexico with a total of six recompletes to date with average rate of returns in excess of 90% and additional recomplete candidates and future infill drilling locations identified
  • Updated fourth quarter and full-year 2018 operational and financial guidance for the year, with an updated full year 2018 capital budget of approximately $120.0 million to $125.0 million
  • Remain significantly hedged for the balance of 2018 and through 2020 with the balance of 2018 production hedged 85%, 91% and 42% for natural gas, oil and NGLs, respectively, at the mid-point of announced guidance
  • Added Rockies basis hedges for 2018 and 2019 for a portion of our Rockies production
  • Added MidlandCushing basis hedges for 2019 for a portion of our Permian production