Vanguard Natural Res (VNR)

Description:

Vanguard Natural Resources, LLC, was formed in October 2006. It completed its initial public offering on October 2007. The Company focuses on the acquisition and development of mature, long-lived natural gas and oil properties in the United States. Through its operating subsidiaries, the Company owns properties in the southern portion of the Appalachian Basin, mainly in southeast Kentucky and northeast Tennessee, in the Permian Basin, mainly in west Texas and southeastern New Mexico, and in south Texas. The Appalachian Basin is a mature producing region with well known geologic characteristics. Reserves in the Appalachian Basin typically have a high degree of step-out development success; that is, as development progresses, reserves from newly completed wells are reclassified from the proved undeveloped to the proved developed category and additional adjacent locations are added to proved undeveloped reserves. In the Permian Basin, most of the Company's gas production is casinghead gas produced in conjunction with its oil production. Casinghead gas typically has a high Btu content and requires processing prior to sale to third parties. The Company has a number of processing agreements in place with gatherers/processors of its casinghead gas. In south Texas, the Company's natural gas production has a high Btu content and requires some processing prior to sale to third parties. Through its relationship with the operator of the south Texas properties, Lewis Petro Properties, Inc., it benefits from a processing agreement that was in place prior to its acquisition of these natural gas properties. The natural gas and oil industry is highly competitive. The Company encounters competition from other independent operators and from major oil companies in acquiring properties, leasing acreage, contracting for drilling equipment and securing trained personnel. It is also affected by competition for drilling rigs and the availability of related equipment. The Company encounters strong competition from other independent operators and from major oil companies in acquiring properties, leasing acreage, contracting for drilling equipment and securing trained personnel. It is subject to federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to conservation and environmental protection.