(Mark One)
|
|
|
x
|
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended September 30, 2008
|
||
OR
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||
o
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|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the transition period
from to
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||
|
||
Commission
File Number: 001-33756
|
Delaware
|
|
61-1521161
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
|
(I.R.S.
Employer
Identification
No.)
|
7700
San Felipe, Suite 485
Houston,
Texas
|
|
77063
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
Accelerated
filer o
|
|
Smaller
reporting company o
|
|
(Do
not check if a smaller reporting company)
|
|
|
|
Page
|
GLOSSARY
OF TERMS
|
|
|
|
|
|
PART
I - FINANCIAL INFORMATION
|
|
|
Item
1.
|
Unaudited
Financial Statements
|
|
|
Consolidated
Statements of Operations
|
3
|
|
Consolidated
Balance Sheets
|
4
|
|
Consolidated
Statements of Cash Flows
|
5
|
|
Consolidated
Statements of Comprehensive Income (Loss)
|
6
|
|
Notes
to Consolidated Financial Statements
|
7
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
32
|
Item
4.
|
Controls
and Procedures
|
35
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|
|
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PART
II – OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
37
|
Item
1A.
|
Risk
Factors
|
37
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
39
|
Item
3.
|
Default
in Senior Securities
|
39
|
Item
4.
|
Submission
of Matters to a Vote of Securities Holders
|
39
|
Item
5.
|
Other
Information
|
40
|
Item
6.
|
Exhibits
|
40
|
/day
|
|
=
per day
|
|
Mcf
|
|
=
thousand cubic feet
|
Bbls
|
|
=
barrels
|
|
Mcfe
|
|
=
thousand cubic feet of natural gas equivalents
|
Bcfe
|
|
=
billion cubic feet of natural gas equivalents
|
|
MMBtu
|
|
=
million British thermal units
|
Btu
|
|
=
British thermal unit
|
|
MMcf
|
|
=
million cubic feet
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Revenues:
|
|||||||||||||
Natural
gas and oil sales
|
$
|
20,838,797
|
$
|
7,641,064
|
$
|
55,692,781
|
$
|
26,709,417
|
|||||
Realized
gain (loss) on commodity cash flow hedges
|
—
|
940,566
|
—
|
(725,286
|
)
|
||||||||
Total
revenues
|
20,838,797
|
8,581,630
|
55,692,781
|
25,984,131
|
|||||||||
|
|||||||||||||
Costs
and expenses:
|
|||||||||||||
Lease
operating expenses
|
3,483,968
|
1,347,565
|
7,799,721
|
3,807,985
|
|||||||||
Depreciation,
depletion, amortization and accretion
|
4,187,241
|
2,267,050
|
10,341,243
|
6,587,339
|
|||||||||
Selling,
general and administrative expenses
|
1,561,031
|
1,084,995
|
4,843,497
|
2,300,484
|
|||||||||
Bad
debt expense
|
—
|
—
|
—
|
1,007,458
|
|||||||||
Taxes
other than income taxes
|
1,263,223
|
326,175
|
3,658,301
|
1,217,167
|
|||||||||
Total
costs and expenses
|
10,495,463
|
5,025,785
|
26,642,762
|
14,920,433
|
|||||||||
|
|||||||||||||
Income
from operations
|
10,343,334
|
3,555,845
|
29,050,019
|
11,063,698
|
|||||||||
|
|||||||||||||
Other
income and (expense):
|
|||||||||||||
Interest
income
|
4,265
|
19,793
|
16,272
|
47,439
|
|||||||||
Interest
expense
|
(1,488,745
|
)
|
(2,524,427
|
)
|
(3,862,855
|
)
|
(6,944,241
|
)
|
|||||
Realized
gain (loss) on commodity derivative contracts
|
(2,943,833
|
)
|
—
|
(9,792,946
|
)
|
—
|
|||||||
Unrealized
gain (loss) on commodity derivative contracts
|
66,353,176
|
—
|
(6,042,967
|
)
|
—
|
||||||||
Realized
loss on interest rate derivative contracts
|
(39,058
|
)
|
—
|
(90,364
|
)
|
—
|
|||||||
Unrealized
loss on interest rate derivative contracts
|
(419,769
|
)
|
—
|
(419,769
|
)
|
—
|
|||||||
Loss
on extinguishment of debt
|
—
|
—
|
—
|
(2,501,528
|
)
|
||||||||
Total
other expense, net
|
61,466,036
|
(2,504,634
|
)
|
(20,192,629
|
)
|
(9,398,330
|
)
|
||||||
|
|||||||||||||
Net
income
|
$
|
71,809,370
|
$
|
1,051,211
|
$
|
8,857,390
|
$
|
1,665,368
|
|||||
|
|||||||||||||
Net
income per unit:
|
|||||||||||||
Common
& Class B units – basic
|
$
|
5.90
|
$
|
0.18
|
$
|
0.77
|
$
|
0.29
|
|||||
|
|||||||||||||
Common
& Class B units – diluted
|
$
|
5.90
|
$
|
0.18
|
$
|
0.77
|
$
|
0.29
|
|||||
Weighted
average units outstanding:
|
|||||||||||||
Common
units – basic & diluted
|
11,749,421
|
5,540,000
|
11,115,463
|
5,540,000
|
|||||||||
Class
B units – basic & diluted
|
420,000
|
393,098
|
420,000
|
231,410
|
|
September 30,
2008
|
December 31,
2007
|
|||||
|
(Unaudited)
|
||||||
Assets
|
|||||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
340,850
|
$
|
3,109,563
|
|||
Trade
accounts receivable, net
|
11,103,113
|
4,372,731
|
|||||
Derivative
assets
|
3,723,104
|
4,017,085
|
|||||
Other
current assets
|
940,824
|
453,198
|
|||||
Total
current assets
|
16,107,891
|
11,952,577
|
|||||
|
|||||||
Property
and equipment, net of accumulated depreciation
|
195,682
|
166,455
|
|||||
|
|||||||
Natural
gas and oil properties, at cost
|
278,974,900
|
135,435,240
|
|||||
Accumulated
depletion
|
(38,746,260
|
)
|
(28,451,891
|
)
|
|||
Natural
gas and oil properties, net – full cost
method
|
240,228,640
|
106,983,349
|
|||||
|
|||||||
Other
assets
|
|||||||
Derivative
assets
|
486,311
|
1,329,511
|
|||||
Deferred
financing costs
|
897,521
|
941,833
|
|||||
Non-current
deposits
|
45,963
|
8,285,883
|
|||||
Other
assets
|
1,909,537
|
1,519,577
|
|||||
Total
assets
|
$
|
259,871,545
|
$
|
131,179,185
|
|||
|
|||||||
Liabilities
and members’ equity
|
|||||||
|
|||||||
Current
liabilities
|
|||||||
Accounts
payable – trade
|
$
|
184,726
|
$
|
1,056,627
|
|||
Accounts
payable – natural gas and oil
|
1,801,613
|
257,073
|
|||||
Payables
to affiliates
|
5,066,485
|
3,838,328
|
|||||
Accrued
expenses
|
2,503,386
|
203,159
|
|||||
Total
current liabilities
|
9,556,210
|
5,355,187
|
|||||
|
|||||||
Long-term
debt
|
134,500,000
|
37,400,000
|
|||||
Derivative
liabilities
|
10,108,110
|
5,903,384
|
|||||
Asset
retirement obligations
|
2,404,429
|
189,711
|
|||||
Total
liabilities
|
156,568,749
|
48,848,282
|
|||||
|
|||||||
Commitments
and contingencies
|
|||||||
|
|||||||
Members’
equity
|
|||||||
Members’
capital, 12,145,873 common units issued and outstanding at September
30,
2008 and 10,795,000 December 31, 2007
|
107,163,017
|
90,257,856
|
|||||
Class
B units, 420,000 issued and outstanding at September 30, 2008 and
December
31, 2007
|
4,016,122
|
2,131,995
|
|||||
Accumulated
other comprehensive loss
|
(7,876,343
|
)
|
(10,058,948
|
)
|
|||
Total
members’ equity
|
103,302,796
|
82,330,903
|
|||||
Total
liabilities and members’ equity
|
$
|
259,871,545
|
$
|
131,179,185
|
|
Nine Months Ended
September
30,
|
||||||
|
2008
|
2007
|
|||||
Operating
activities
|
|||||||
Net
income
|
$
|
8,857,390
|
$
|
1,665,368
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation,
depletion, amortization and accretion
|
10,341,243
|
6,587,339
|
|||||
Amortization
of deferred financing costs
|
263,691
|
217,739
|
|||||
Bad
debt expense
|
—
|
1,007,458
|
|||||
Unit-based
compensation
|
2,708,381
|
1,314,778
|
|||||
Amortization
of premiums paid and non-cash settlements on derivative
contracts
|
3,981,775
|
—
|
|||||
Unrealized
losses on commodity and interest rate derivative contracts
|
6,462,736
|
—
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Trade
accounts receivable
|
(6,730,382
|
)
|
(811,658
|
)
|
|||
Payables
to affiliates
|
661,767
|
(1,303,192
|
)
|
||||
Other
current assets
|
(434,416
|
)
|
(187,373
|
)
|
|||
Price
risk management activities, net
|
(452,426
|
)
|
(5,928,677
|
)
|
|||
Accounts
payable
|
672,639
|
1,561,210
|
|||||
Accrued
expenses
|
2,300,227
|
(1,482,634
|
)
|
||||
Net
cash provided by operating activities
|
28,632,625
|
2,640,358
|
|||||
|
|||||||
Investing
activities
|
|||||||
Additions
to property and equipment
|
(69,603
|
)
|
(45,760
|
)
|
|||
Additions
to natural gas and oil properties
|
(13,359,807
|
)
|
(9,426,483
|
)
|
|||
Acquisitions
of natural gas and oil properties
|
(99,814,585
|
)
|
—
|
||||
Deposits
and prepayments of natural gas and oil properties
|
(901,481
|
)
|
(1,225,273
|
)
|
|||
Net
cash used in investing activities
|
(114,145,476
|
)
|
(10,697,516
|
)
|
|||
|
|||||||
Financing
activities
|
|||||||
Proceeds
from borrowings
|
112,900,000
|
114,600,000
|
|||||
Repayment
of debt
|
(15,800,000
|
)
|
(101,867,500
|
)
|
|||
Contributions
from members
|
—
|
41,221,000
|
|||||
Distributions
to members
|
(13,846,053
|
)
|
(41,220,000
|
)
|
|||
Financing
costs
|
(219,379
|
)
|
(1,202,966
|
)
|
|||
Offering
costs
|
(54,191
|
)
|
(2,021,898
|
)
|
|||
Purchase
of units for issuance as unit-based compensation
|
(236,239
|
)
|
—
|
||||
Net
cash provided by financing activities
|
82,744,138
|
9,508,636
|
|||||
|
|||||||
Net
(decrease) increase in cash and cash equivalents
|
(2,768,713
|
)
|
1,451,478
|
||||
|
|||||||
Cash
and cash equivalents,
beginning of period
|
3,109,563
|
1,730,956
|
|||||
|
|||||||
Cash
and cash equivalents,
end of period
|
$
|
340,850
|
$
|
3,182,434
|
|||
|
|||||||
Supplemental
cash flow information:
|
|||||||
Cash
paid for interest
|
$
|
3,341,880
|
$
|
7,055,565
|
|||
Non-cash
financing and investing activities:
|
|||||||
Asset
retirement obligations
|
$
|
2,155,010
|
$
|
157,514
|
|||
Assumption
of natural gas and oil swaps
|
$
|
2,467,573
|
$
|
—
|
|||
Deferred
swap liability
|
$
|
—
|
$
|
7,322,685
|
|||
Initial
contribution of assets
|
$
|
—
|
$
|
3,289,055
|
|||
Issuance
of common units for acquisition of natural gas and oil
properties
|
$
|
21,360,000
|
$
|
—
|
|||
Transfer
of deposit for acquisition of natural gas and oil
properties
|
$
|
7,830,000
|
$
|
—
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
|
|||||||||||||
Net
income
|
$
|
71,809,370
|
$
|
1,051,211
|
$
|
8,857,390
|
$
|
1,665,368
|
|||||
|
|||||||||||||
Net
gains (losses) from derivative contracts:
|
|||||||||||||
Unrealized
mark-to-market gains (losses) arising during the period
|
—
|
4,584,832
|
(2,747,150
|
)
|
(6,381,176
|
)
|
|||||||
Reclassification
adjustments for settlements
|
(6,766
|
)
|
(944,481
|
)
|
564,545
|
(436,738
|
)
|
||||||
Other
comprehensive income (loss)
|
(6,766
|
)
|
3,640,351
|
(2,182,605
|
)
|
(6,817,914
|
)
|
||||||
|
|||||||||||||
Comprehensive
income (loss)
|
$
|
71,802,604
|
$
|
4,691,562
|
$
|
6,674,785
|
$
|
(5,152,546
|
)
|
1.
|
Summary
of Significant Accounting
Policies
|
(a) |
Basis
of Presentation and Principles of Consolidation:
|
(b) |
Financial
Statement Restatement:
|
(c) |
Recently
Adopted Accounting
Pronouncements:
|
(d) |
New
Pronouncements Issued But Not Yet
Adopted:
|
(e) |
Use
of Estimates:
|
2.
|
Acquisitions
|
|
December 31, 2007
|
|||
(In thousands)
|
||||
Revenues
|
$
|
18,205
|
||
Direct
operating expenses
|
(6,624
|
)
|
||
Excess
of revenues over direct operating expenses
|
$
|
11,581
|
|
December 31, 2007
|
|||
(In thousands)
|
||||
Revenues
|
$
|
8,730
|
||
Direct
operating expenses
|
(2,782
|
)
|
||
Excess
of revenues over direct operating expenses
|
$
|
5,948
|
3.
|
Accounts
Receivable and Allowance for Doubtful
Accounts
|
4.
|
Credit
Facilities and Long-Term
Debt
|
|
Amount Outstanding
|
||||||||||||
Description
|
Interest Rate
|
Maturity Date
|
September 30,
2008
|
December 31,
2007
|
|||||||||
$400
million senior secured revolver facility
|
Variable
|
March 31, 2011
|
134,500,000
|
37,400,000
|
|||||||||
Total
|
$
|
134,500,000
|
$
|
37,400,000
|
Borrowing Base Utilization Grid | |||||||||||||
Borrowing
base utilization percentage
|
<25
|
%
|
>25%<50
|
%
|
>50%<75
|
%
|
>75
|
%
|
|||||
Eurodollar
loans
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
|||||
ABR
loans
|
0.000
|
%
|
0.250
|
%
|
0.500
|
%
|
0.750
|
%
|
|||||
Commitment
fee rate
|
0.250
|
%
|
0.300
|
%
|
0.375
|
%
|
0.375
|
%
|
|||||
Letter
of credit fee
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
5.
|
Price
Risk Management Activities
|
|
Gas
|
Oil
|
|||||||||||
Contract
Period
|
MMBtu
|
Weighted
Average
Fixed Price
|
Bbls
|
WTI
Price
|
|||||||||
2008
|
713,831
|
$
|
9.00
|
48,000
|
$
|
90.30
|
|||||||
2009
|
3,623,946
|
$
|
9.42
|
181,500
|
$
|
87.23
|
|||||||
2010
|
3,236,040
|
$
|
9.10
|
164,250
|
$
|
85.65
|
|||||||
2011
|
2,962,312
|
$
|
7.82
|
151,250
|
$
|
85.50
|
|||||||
2012
|
—
|
$
|
—
|
144,000
|
$
|
80.00
|
Contract
Period
|
Volume in MMBtu
|
Purchased NYMEX
Price Floor
|
|||||
2008
|
246,920
|
$
|
7.50
|
||||
2009
|
840,139
|
$
|
7.50
|
|
Gas
|
Oil
|
|||||||||||||||||
|
MMBtu
|
Floor
|
Ceiling
|
Bbls
|
Floor
|
Ceiling
|
|||||||||||||
Production Period:
|
|||||||||||||||||||
October
2008 – December 2008
|
566,800
|
$
|
10.13
|
$
|
10.94
|
9,200
|
$
|
100.00
|
$
|
127.00
|
|||||||||
January
2009 – December 2009
|
1,000,000
|
$
|
7.50
|
$
|
9.00
|
36,500
|
$
|
100.00
|
$
|
127.00
|
|||||||||
January
2010 – December 2010
|
730,000
|
$
|
8.00
|
$
|
9.30
|
—
|
$
|
—
|
$
|
—
|
|
Notional
|
Fixed
Libor
|
|||||
|
Amount
|
Rates
|
|||||
Period:
|
|||||||
October
1, 2008 to December 10, 2010
|
$
|
20,000,000
|
3.88
|
%
|
|||
October
1, 2008 to January 31, 2011
|
$
|
30,000,000
|
3.00
|
%
|
|||
October
1, 2008 to March 31, 2011
|
$
|
10,000,000
|
2.66
|
%
|
|||
October
10, 2008 to September 10, 2009 (Basis Swap)
|
$
|
20,000,000
|
LIBOR
1M vs. LIBOR 3M
|
||||
October
31, 2008 to October 31, 2009 (Basis Swap)
|
$
|
40,000,000
|
LIBOR 1M vs. LIBOR 3M
|
6.
|
Fair
Value Measurements
|
Level
1
|
|
Quoted
prices for identical instruments in active markets. Level 1 assets
include
short-term investments (such as Money Market Funds and Treasury
Bills).
|
|
|
|
Level
2
|
|
Quoted
market prices for similar instruments in active markets; quoted prices
for
identical or similar instruments in markets that are not active;
and
model-derived valuations in which all significant inputs and significant
value drivers are observable in active markets.
|
|
|
|
Level 3
|
|
Valuations
derived from valuation techniques in which one or more significant
inputs
or significant value drivers are unobservable. Level 3 assets and
liabilities generally include financial instruments whose value is
determined using pricing models, discounted cash flow methodologies,
or
similar techniques, as well as instruments for which the determination
of
fair value requires significant management judgment or estimation
or for
which there is a lack of transparency as to the inputs
used.
|
|
September 30, 2008
|
||||||||||||
|
Fair Value Measurements Using
|
Assets/Liabilities
|
|||||||||||
|
Level 1
|
Level 2
|
Level 3
|
at Fair value
|
|||||||||
Assets:
|
|||||||||||||
Commodity
price derivative contracts
|
$
|
—
|
$
|
3,735,994
|
$
|
—
|
$
|
3,735,994
|
|||||
Interest
rate derivative contracts
|
—
|
473,421
|
—
|
473,421
|
|||||||||
Total
derivative instruments
|
$
|
—
|
$
|
4,209,415
|
$
|
—
|
$
|
4,209,415
|
|||||
|
|||||||||||||
Liabilities:
|
|||||||||||||
Commodity
price derivative contracts
|
$
|
—
|
$
|
(9,978,747
|
)
|
$
|
—
|
$
|
(9,978,747
|
)
|
|||
Interest
rate derivative contracts
|
—
|
(129,363
|
)
|
—
|
(129,363
|
)
|
|||||||
Total
derivative instruments
|
$
|
—
|
$
|
(10,108,110
|
)
|
$
|
—
|
$
|
(10,108,110
|
)
|
7.
|
Asset
Retirement Obligations
|
|
2008
|
2007
|
|||||
|
|||||||
Asset
retirement obligations at January 1,
|
$
|
189,711
|
$
|
—
|
|||
Liabilities
added during the current period
|
2,155,010
|
157,514
|
|||||
Accretion
expense
|
59,708
|
9,094
|
|||||
Asset
retirement obligation at September 30,
|
$
|
2,404,429
|
$
|
166,608
|
8.
|
Related
Party Transactions
|
9.
|
Common
Units and Net Income per
Unit
|
10.
|
Unit-Based
Compensation
|
|
Number of
Non-vested Units
|
Weighted Average
Grant Date Fair Value
|
|||||
|
|||||||
Non-vested
units at December 31, 2007
|
425,000 |
$
|
18.14
|
||||
Granted
|
15,000 | 16.79 | |||||
Non-vested
units at September 30, 2008
|
440,000 |
$
|
18.10
|
11.
|
Subsequent
Event
|
Borrowing
Base Utilization Grid
|
|||||||||||||
Borrowing
base utilization percentage
|
<33
|
%
|
>33%
<66
|
%
|
>66%
<85
|
%
|
>85
|
%
|
|||||
Eurodollar
loans
|
1.500
|
%
|
1.750
|
%
|
2.000
|
%
|
2.125
|
%
|
|||||
ABR
loans
|
0.000
|
%
|
0.250
|
%
|
0.500
|
%
|
0.750
|
%
|
|||||
Commitment
fee rate
|
0.250
|
%
|
0.300
|
%
|
0.375
|
%
|
0.375
|
%
|
|||||
Letter
of credit fee
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
Borrowing
Base Utilization Grid
|
Borrowing
base utilization percentage
|
<25
|
%
|
>25%<50
|
%
|
>50%<75
|
%
|
>75
|
%
|
|||||
Eurodollar
loans
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
|||||
ABR
loans
|
0.000
|
%
|
0.250
|
%
|
0.500
|
%
|
0.750
|
%
|
|||||
Commitment
fee rate
|
0.250
|
%
|
0.300
|
%
|
0.375
|
%
|
0.375
|
%
|
|||||
Letter
of credit fee
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
Borrowing
Base Utilization Grid
|
|||||||||||||
Borrowing
base utilization percentage
|
<33
|
%
|
>33%
<66
|
%
|
>66%
<85
|
%
|
>85
|
%
|
|||||
Eurodollar
loans
|
1.500
|
%
|
1.750
|
%
|
2.000
|
%
|
2.125
|
%
|
|||||
ABR
loans
|
0.000
|
%
|
0.250
|
%
|
0.500
|
%
|
0.750
|
%
|
|||||
Commitment
fee rate
|
0.250
|
%
|
0.300
|
%
|
0.375
|
%
|
0.375
|
%
|
|||||
Letter
of credit fee
|
1.000
|
%
|
1.250
|
%
|
1.500
|
%
|
1.750
|
%
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||
|
2008(b)
|
2007
|
2008(a)(b)
|
2007
|
|||||||||
Revenues:
|
|||||||||||||
Natural
gas and oil sales
|
$
|
20,838,797
|
$
|
7,641,064
|
$
|
55,692,781
|
$
|
26,709,417
|
|||||
Realized
gain (loss) on commodity cash flow hedges
|
—
|
940,566
|
—
|
(725,286
|
)
|
||||||||
Total
revenues
|
$
|
20,838,797
|
$
|
8,581,630
|
$
|
55,692,781
|
$
|
25,984,131
|
|||||
Costs
and expenses:
|
|||||||||||||
Lease
operating expenses
|
$
|
3,483,968
|
$
|
1,347,565
|
$
|
7,799,721
|
$
|
3,807,985
|
|||||
Depreciation,
depletion, amortization and accretion
|
4,187,241
|
2,267,050
|
10,341,243
|
6,587,339
|
|||||||||
Selling,
general and administrative expenses
|
1,561,031
|
1,084,995
|
4,843,497
|
2,300,484
|
|||||||||
Bad
debt expense
|
—
|
—
|
—
|
1,007,458
|
|||||||||
Taxes
other than income taxes
|
1,263,223
|
326,175
|
3,658,301
|
1,217,167
|
|||||||||
Total
costs and expenses
|
$
|
10,495,463
|
$
|
5,025,785
|
$
|
26,642,762
|
$
|
14,920,433
|
|||||
Other
income and (expense):
|
|||||||||||||
Interest
expense, net
|
$
|
(1,484,480
|
)
|
$
|
(2,504,634
|
)
|
$
|
(3,846,583
|
)
|
$
|
(6,896,802
|
)
|
|
Realized
gain (loss) on commodity derivative contracts
|
$
|
(2,943,833
|
)
|
$
|
—
|
$
|
(9,792,946
|
)
|
$
|
—
|
|||
Unrealized
gain (loss) on commodity derivative contracts
|
$
|
66,353,176
|
$
|
—
|
$
|
(6,042,967
|
)
|
$
|
—
|
||||
Realized
loss on interest rate derivative contracts
|
$
|
(39,058
|
)
|
$
|
—
|
$
|
(90,364
|
)
|
$
|
—
|
|||
Unrealized
loss on interest rate derivative contracts
|
$
|
(419,769
|
)
|
$
|
—
|
$
|
(419,769
|
)
|
$
|
—
|
|||
Loss
on extinguishment of debt
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
(2,501,528
|
)
|
(a)
The Permian acquisition closed on January 31, 2008 and as such
only eight
months of operations are included in the nine month period ended
September
30, 2008.
|
(b)
The South Texas acquisition closed on July 28, 2008 and as such
only two
months of operations are included in the three and nine month period
ended
September 30, 2008.
|
Three Months Ended
|
Percentage
|
|||||||||
September 30,
|
Increase
|
|||||||||
2008
|
2007
|
(Decrease)
|
||||||||
Net
Natural Gas Production:
|
||||||||||
Appalachian
gas (MMcf)
|
923
|
1,002
|
(8
|
)%
|
||||||
Permian
gas (MMcf)
|
—
|
—
|
N/A
|
|||||||
South
Texas gas (MMcf)
|
239
|
(a)
|
—
|
N/A
|
||||||
Total
natural gas production (MMcf)
|
1,162
|
1,002
|
16
|
%
|
||||||
Average
Appalachian daily gas production (Mcf/day)
|
10,031
|
10,892
|
(8
|
)%
|
||||||
Average
Permian daily gas production (Mcf/day)
|
—
|
—
|
N/A
|
|||||||
Average
South Texas daily gas production (Mcf/day)
|
3,684
|
(a)
|
—
|
N/A
|
||||||
Average
Vanguard daily gas production (Mcf/day)
|
13,715
|
10,892
|
||||||||
|
||||||||||
Average
Natural Gas Sales Price per Mcf:
|
||||||||||
Net
realized gas price, including realized gains (losses) on commodity
derivative contracts
|
$
|
11.35
|
(b)
|
$
|
9.44
|
(b)
|
20
|
%
|
||
Net
realized gas price, excluding realized gains (losses) on commodity
derivative contracts
|
$
|
11.46
|
$
|
6.69
|
71
|
%
|
||||
|
||||||||||
Net
Oil Production:
|
||||||||||
Appalachian
oil (Bbls)
|
11,122
|
11,348
|
(2
|
)%
|
||||||
Permian
oil (Bbls)
|
54,924
|
—
|
N/A
|
|||||||
Total
oil (Bbls)
|
66,046
|
11,348
|
482
|
%
|
||||||
Average
Appalachian daily oil production (Bbls/day)
|
121
|
123
|
(2
|
)%
|
||||||
Average
Permian daily oil production (Bbls/day)
|
597
|
—
|
N/A
|
|||||||
Average
Vanguard daily oil production (Bbls/day)
|
718
|
123
|
||||||||
|
||||||||||
Average
Oil Sales Price per Bbl:
|
||||||||||
Net
realized oil price, including realized gains (losses) on commodity
derivative contracts
|
$
|
93.26
|
$
|
82.46
|
13
|
%
|
||||
Net
realized oil price, excluding realized gains (losses) on commodity
derivative contracts
|
$
|
114.01
|
$
|
82.46
|
38
|
%
|
(a)
|
The
South Texas acquisition closed on July 28, 2008 and as such only
two
months of operations are included in the three month period ended
September 30, 2008.
|
|
|
(b)
|
Excludes
amortization of premiums paid and non-cash settlements on derivative
contracts.
|
Nine Months Ended
|
Percentage
|
|||||||||
September 30,
|
Increase
|
|||||||||
2008
|
2007
|
(Decrease)
|
||||||||
Net
Natural Gas Production:
|
||||||||||
Appalachian
gas (MMcf)
|
2,693
|
3,102
|
(13
|
)%
|
||||||
Permian
gas (MMcf)
|
150
|
(a)
|
—
|
N/A
|
||||||
South
Texas gas (MMcf)
|
240
|
(b)
|
—
|
N/A
|
||||||
Total
natural gas production (MMcf)
|
3,083
|
3,102
|
—
|
%
|
||||||
Average
Appalachian daily gas production (Mcf/day)
|
9,827
|
11,363
|
(14
|
)%
|
||||||
Average
Permian daily gas production (Mcf/day)
|
618
|
(a)
|
—
|
N/A
|
||||||
Average
South Texas daily gas production (Mcf/day)
|
3,684
|
(b)
|
—
|
N/A
|
||||||
Average
Vanguard daily gas production (Mcf/day)
|
14,129
|
11,363
|
||||||||
Average
Natural Gas Sales Price per Mcf:
|
||||||||||
Net
realized gas price, including realized gains (losses) on commodity
derivative contracts
|
$
|
10.78
|
(c)
|
$
|
8.73
|
(c)
|
23
|
%
|
||
Net
realized gas price, excluding realized gains (losses) on commodity
derivative contracts
|
$
|
11.56
|
$
|
8.14
|
42
|
%
|
||||
|
||||||||||
Net
Oil Production:
|
||||||||||
Appalachian
oil (Bbls)
|
32,543
|
19,861
|
64
|
%
|
||||||
Permian
oil (Bbls)
|
157,463
|
(a)
|
—
|
N/A
|
||||||
Total
oil (Bbls)
|
190,006
|
19,861
|
857
|
%
|
||||||
Average
Appalachian daily oil production (Bbls/day)
|
119
|
73
|
63
|
%
|
||||||
Average
Permian daily oil production (Bbls/day)
|
648
|
(a)
|
—
|
N/A
|
||||||
Average
Vanguard daily oil production (Bbls/day)
|
767
|
73
|
||||||||
Average
Oil Sales Price per Bbl:
|
||||||||||
Net
realized oil price, including realized gains (losses) on commodity
derivative contracts
|
$
|
87.62
|
$
|
73.03
|
20
|
%
|
||||
Net
realized oil price, excluding realized gains (losses) on commodity
derivative contracts
|
$
|
105.56
|
$
|
73.03
|
45
|
%
|
|
(a)
|
The
Permian acquisition closed on January 31, 2008 and as such only
eight
months of operations are included in the nine month period ended
September
30, 2008.
|
(b)
|
The
South Texas acquisition closed on July 28, 2008 and as such only
two
months of operations are included in the nine month period ended
September
30, 2008.
|
|
(c)
|
Excludes
amortization of premiums paid and non-cash settlements on derivative
contracts.
|
|
·
|
the
London interbank offered rate, or LIBOR, plus an applicable margin
between
1.50% and 2.125% per annum; or
|
|
·
|
a
domestic bank rate plus an applicable margin between 0.00% and
0.75% per
annum.
|
|
·
|
incur
indebtedness;
|
|
·
|
grant
certain liens;
|
|
·
|
make
certain loans, acquisitions, capital expenditures and
investments;
|
|
·
|
make
distributions;
|
|
·
|
merge
or consolidate; or
|
|
·
|
engage
in certain asset dispositions, including a sale of all or substantially
all of our assets.
|
|
·
|
consolidated
net income plus interest expense, income taxes, depreciation, depletion,
amortization, accretion, changes in fair value of derivative instruments
and other similar charges, minus all non-cash income added to consolidated
net income, and giving pro forma effect to any acquisitions or
capital
expenditures, to interest expense of not less than 2.5 to
1.0;
|
|
·
|
consolidated
current assets, including the unused amount of the total commitments,
to
consolidated current liabilities of not less than 1.0 to 1.0, excluding
non-cash assets and liabilities under SFAS No. 133, which includes
the
current portion of derivative
contracts;
|
|
·
|
consolidated
debt to consolidated net income plus interest expense, income taxes,
depreciation, depletion, amortization, accretion, changes in fair
value of
derivative instruments and other similar charges, minus all non-cash
income added to consolidated net income, and giving pro forma effect
to
any acquisitions or capital expenditures of not more than 4.0 to
1.0.
|
|
·
|
failure
to pay any principal when due or any interest, fees or other amount
within
certain grace periods;
|
|
·
|
a
representation or warranty is proven to be incorrect when
made;
|
|
·
|
failure
to perform or otherwise comply with the covenants in the credit
agreement
or other loan documents, subject, in certain instances, to certain
grace
periods;
|
|
·
|
default
by us on the payment of any other indebtedness in excess of $2.0
million,
or any event occurs that permits or causes the acceleration of
the
indebtedness;
|
|
·
|
bankruptcy
or insolvency events involving us or our
subsidiaries;
|
|
·
|
the
entry of, and failure to pay, one or more adverse judgments in
excess of
$1.0 million or one or more non-monetary judgments that could reasonably
be expected to have a material adverse effect and for which enforcement
proceedings are brought or that are not stayed pending
appeal;
|
|
·
|
specified
events relating to our employee benefit plans that could reasonably
be
expected to result in liabilities in excess of $1.0 million in
any year;
and
|
|
·
|
a
change of control, which includes (1) an acquisition of ownership,
directly or indirectly, beneficially or of record, by any person
or group
(within the meaning of the Securities Exchange Act of 1934 and
the rules
of the Securities Exchange Commission) of equity interests representing
more than 25% of the aggregate ordinary voting power represented by our
issued and outstanding equity interests other than by Majeed S.
Nami or
his affiliates, or (2) the replacement of a majority of our directors
by
persons not approved by our board of
directors.
|
Payments Due by Year (in thousands)
|
||||||||||||||||||||||
2008
|
2009
|
2010
|
2011
|
2012
|
After 2012
|
Total
|
||||||||||||||||
Management compensation
|
$
|
150
|
$
|
600
|
$
|
100
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
850
|
||||||||
Asset
retirement obligations
|
—
|
12
|
24
|
180
|
32
|
2,156
|
2,404
|
|||||||||||||||
Derivative
liabilities
|
607
|
3,484
|
7,326
|
5,999
|
3,195
|
—
|
20,611
|
|||||||||||||||
Long-term
debt (1)
|
—
|
—
|
—
|
134,500
|
—
|
—
|
134,500
|
|||||||||||||||
Operating
leases
|
10
|
41
|
10
|
—
|
—
|
—
|
61
|
|||||||||||||||
Total
|
$
|
767
|
$
|
4,137
|
$
|
7,460
|
$
|
140,679
|
$
|
3,227
|
$
|
2,156
|
$
|
158,426
|
|
(1)
|
This
table does not include interest to be paid on the principal balances
shown
as the interest rates on the reserve-based credit facility are
variable.
|
|
•
|
Net
interest expense (including write-off of deferred financing
fees);
|
|
•
|
Loss
on extinguishment of debt;
|
|
•
|
Depreciation,
depletion and amortization (including accretion of asset retirement
obligations);
|
|
•
|
Bad
debt expenses;
|
|
•
|
Amortization
of premiums paid and non-cash settlement on derivative
contracts;
|
|
•
|
Unrealized
gains and losses on commodity and interest rate derivative
contracts;
|
|
•
|
Unit-based
compensation expense; and
|
|
•
|
Realized
gains and losses on cancelled
derivatives.
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
||||||||||
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
||||
Net income
|
$
|
71,809,370
|
$
|
1,051,211
|
$
|
8,857,390
|
$
|
1,665,368
|
|||||
Plus:
|
|||||||||||||
Interest
expense
|
1,488,745
|
2,524,427
|
3,862,855
|
6,944,241
|
|||||||||
Loss
on extinguishment of debt
|
—
|
—
|
—
|
2,501,528
|
|||||||||
Depreciation,
depletion, amortization and accretion
|
4,187,241
|
2,267,050
|
10,341,243
|
6,587,339
|
|||||||||
Bad
debt expense
|
—
|
—
|
—
|
1,007,458
|
|||||||||
Amortization
of premiums paid and non-cash settlements on derivative contracts
|
1,450,582
|
1,813,495
|
3,981,775
|
2,546,999
|
|||||||||
Unrealized
(gains) losses on commodity and interest rate derivative
contracts
|
(65,933,407
|
)
|
—
|
6,462,736
|
—
|
||||||||
Unit-based
compensation expense
|
812,034
|
751,635
|
2,708,381
|
1,314,778
|
|||||||||
Realized
loss on cancelled derivatives
|
—
|
—
|
—
|
776,634
|
|||||||||
Less:
|
|||||||||||||
Interest
income
|
4,265
|
19,793
|
16,272
|
47,439
|
|||||||||
Adjusted
EBITDA
|
$
|
13,810,300
|
$
|
8,388,025
|
$
|
36,198,108
|
$
|
23,296,906
|
|
October 1, -
December 31,
2008
|
Year
2009
|
Year
2010
|
Year
2011
|
Year
2012
|
|||||||||||
Gas Positions:
|
||||||||||||||||
Fixed
Price Swaps:
|
||||||||||||||||
Notional
Volume (MMBtu)
|
713,831
|
3,623,946
|
3,236,040
|
2,962,312
|
—
|
|||||||||||
Fixed
Price ($/MMBtu)
|
$
|
9.00
|
$
|
9.42
|
$
|
9.10
|
$
|
7.82
|
$
|
-—
|
||||||
Puts:
|
||||||||||||||||
Notional
Volume (MMBtu)
|
246,920
|
840,139
|
—
|
—
|
—
|
|||||||||||
Floor
Price ($/MMBtu)
|
$
|
7.50
|
$
|
7.50
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Collars:
|
||||||||||||||||
Notional
Volume (MMBtu)
|
566,800
|
1,000,000
|
730,000
|
—
|
—
|
|||||||||||
Floor
Price ($/MMBtu)
|
$
|
10.13
|
$
|
7.50
|
$
|
8.00
|
$
|
—
|
$
|
—
|
||||||
Ceiling
Price ($/MMBtu)
|
$
|
10.94
|
$
|
9.00
|
$
|
9.30
|
$
|
—
|
$
|
—
|
||||||
Total:
|
||||||||||||||||
Notional
Volume (MMBtu)
|
1,527,551
|
5,464,085
|
3,966,040
|
2,962,312
|
—
|
|||||||||||
|
||||||||||||||||
Oil
Positions:
|
||||||||||||||||
Fixed
Price Swaps:
|
||||||||||||||||
Notional
Volume (Bbls)
|
48,000
|
181,500
|
164,250
|
151,250
|
144,000
|
|||||||||||
Fixed
Price ($/Bbl)
|
$
|
90.30
|
$
|
87.23
|
$
|
85.65
|
$
|
85.50
|
$
|
80.00
|
||||||
Collars:
|
||||||||||||||||
Notional
Volume (Bbls)
|
9,200
|
36,500
|
—
|
—
|
—
|
|||||||||||
Floor
Price ($/Bbl)
|
$
|
100.00
|
$
|
100.00
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Ceiling
Price ($/Bbl)
|
$
|
127.00
|
$
|
127.00
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Total:
|
||||||||||||||||
Notional
Volume (Bbls)
|
57,200
|
218,000
|
164,250
|
151,250
|
144,000
|
|
Notional
Amount
|
Fixed
Libor
Rates
|
|||||
Period:
|
|||||||
October
1, 2008 to December 10, 2010
|
$
|
20,000,000
|
3.88
|
%
|
|||
October
1, 2008 to January 31, 2011
|
$
|
30,000,000
|
3.00
|
%
|
|||
October
1, 2008 to March 31, 2011
|
$
|
10,000,000
|
2.66
|
%
|
|||
October
1, 2008 to September 10, 2009 (Basis Swap)
|
$
|
20,000,000
|
LIBOR 1M vs. LIBOR 3M
|
||||
October
31, 2008 to October 31, 2009 (Basis Swap)
|
$
|
40,000,000
|
LIBOR 1M vs. LIBOR 3M
|
Citibank, N.A.
(AA)
|
BNP Paribas
(AA+)
|
The Bank of
Nova Scotia
(AA-)
|
Wachovia
Bank, N.A.
(AA-)
|
Total
|
||||||||||||
Current Asset, net
|
$ | — |
$
|
3,466,419
|
$
|
215,306
|
$
|
41,379
|
$
|
3,723,104
|
||||||
Current
Liability, net
|
$ | — |
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Long-Term
Asset, net
|
$ | — |
$
|
—
|
$
|
268,241
|
$
|
218,070
|
$
|
486,311
|
||||||
Long-Term
Liability, net
|
$ | (6,245,146 | ) |
$
|
(3,862,964
|
)
|
$
|
—
|
$
|
—
|
$
|
(10,108,110
|
)
|
|||
Total
Amount Due from Counterparty/(Owed to Counterparty) at
September 30, 2008
|
$ | (6,245,146 | ) |
$
|
(396,545
|
)
|
$
|
483,547
|
$
|
259,449
|
$
|
(5,898,695
|
)
|
·
|
the
level of consumer demand for crude oil and natural
gas;
|
·
|
the
domestic and foreign supply of crude oil and natural
gas;
|
·
|
Commodity
processing, gathering and transportation availability, and the
availability of refining capacity;
|
·
|
the
price and level of imports of foreign crude oil and natural
gas;
|
·
|
the
ability of the members of the Organization of Petroleum Exporting
Countries to agree to maintain crude oil price and production
controls;
|
·
|
domestic
and foreign governmental regulations and
taxes;
|
·
|
the
price and availability of alternative fuel
sources;
|
·
|
weather
conditions;
|
·
|
political
conditions or hostilities in oil and gas producing regions, including
the
Middle East, Africa and South
America;
|
·
|
technological
advances affecting energy consumption;
and
|
·
|
worldwide
economic conditions.
|
·
|
the
amount of natural gas and oil we
produce;
|
·
|
the
price at which we are able to sell our natural gas and oil
production;
|
·
|
the
level of our operating costs;
|
·
|
the
level of our interest expense which depends on the amount of our
indebtedness and the interest payable thereon;
and
|
·
|
the
level of our capital expenditures.
|
·
|
the
level of our capital expenditures;
|
·
|
our
ability to make working capital borrowings under our credit facility
to
pay distributions;
|
·
|
the
cost of acquisitions, if any;
|
·
|
our
debt service requirements;
|
·
|
fluctuations
in our working capital needs;
|
·
|
timing
and collectibility of receivables;
|
·
|
restrictions
on distributions contained in our credit
facility;
|
·
|
prevailing
economic conditions; and
|
·
|
the
amount of cash reserves established by our board of directors for
the
proper conduct of our business.
|
Exhibit
No.
|
Exhibit Title
|
Incorporated by Reference to the Following
|
||
3.1
|
Certificate of
Formation of Vanguard Natural Resources, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
3.2
|
Second
Amended and Restated Limited Liability Company Agreement of Vanguard
Natural Resources, LLC (including specimen unit certificate for
the
units)
|
Form
8-K, filed November 2, 2007 (File No. 001-33756)
|
||
10.1
|
Amended
and Restated Credit Agreement, dated February 14, 2008, by and
between
Nami Holding Company, LLC, Citibank, N.A., as administrative agent
and L/C
issuer and the lenders party thereto
|
Previously
filed with our Form 10-K on March 31, 2008
|
||
10.2
|
Vanguard
Natural Resources, LLC Long-Term Incentive Plan
|
Form
8-K, filed October 24, 2007 (File No. 001-33756)
|
||
10.3
|
Form of
Vanguard Natural Resources, LLC Long-Term Incentive Plan Phantom
Options
Grant Agreement
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.4
|
Vanguard
Natural Resources, LLC Class B Unit Plan
|
Form
8-K, filed October 24, 2007 (File No. 001-33756)
|
||
10.5
|
Form of
Vanguard Natural Resources, LLC Class B Unit Plan Restricted
Class B Unit Grant
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.6
|
Management
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC, Vanguard Natural Gas, LLC, Trust Energy
Company,
LLC and Ariana Energy, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.7
|
Participation
Agreement, effective January 5, 2007, by and between Vinland Energy
Eastern, LLC, Vanguard Natural Gas, LLC, Trust Energy Company,
LLC and
Ariana Energy, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.8
|
Gathering
and Compression Agreement, effective January 5, 2007, by and between
Vinland Energy Gathering, LLC, Vinland Energy Eastern, LLC, Vanguard
Natural Gas, LLC and Ariana Energy, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.9
|
Gathering
and Compression Agreement, effective January 5, 2007, by and between
Vinland Energy Gathering, LLC, Vinland Energy Eastern, LLC, Vanguard
Natural Gas, LLC and Trust Energy Company
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.10
|
Gathering
and Compression Agreement, effective January 5, 2007, by and between
Vinland Energy Gathering, LLC and Nami Resources Company,
L.L.C.
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.11
|
Well
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC, Vanguard Natural Gas, LLC and Ariana Energy,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.12
|
Well
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC, Vanguard Natural Gas, LLC and Trust Energy
Company, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.13
|
Well
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC and Nami Resources Company, L.L.C.
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.14
|
Amended
and Restated Operating Agreement by and between Vinland Energy
Operations,
LLC, Vinland Energy Eastern, LLC and Ariana Energy, LLC, dated
October 2,
2007 and effective as of January 5, 2007
|
Form
S-1/A, filed October 22, 2007 (File No. 333-142363)
|
||
10.15
|
Operating
Agreement, effective January 5, 2007, by and between Vinland Energy
Operations, LLC, Vinland Energy Eastern, LLC and Trust Energy Company,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.16
|
Amended
and Restated Indemnity Agreement by and between Nami Resources
Company,
L.L.C., Vinland Energy Eastern, LLC, Trust Energy Company, LLC,
Vanguard
Natural Gas, LLC and Vanguard Natural Resources, LLC, dated September
11,
2007
|
Form
S-1/A, filed September 18, 2007 (File No. 333-142363)
|
||
10.17
|
Revenue
Payment Agreement by and between Nami Resources Company, L.L.C.
and Trust
Energy Company, dated April 18, 2007 and effective as of January
5,
2007
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.18
|
Gas
Supply Agreement, dated April 18, 2007, by and between Nami Resources
Company, L.L.C. and Trust Energy Company
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.19
|
Amended
Employment Agreement, dated April 18, 2007, by and between Scott W.
Smith, VNR Holdings, LLC and Vanguard Natural Resources,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No.
333-142363)
|
10.20
|
Amended
Employment Agreement, dated April 18, 2007, by and between Richard A.
Robert, VNR Holdings, LLC and Vanguard Natural Resources,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.21
|
Registration
Rights Agreement, dated April 18,
2007, between
Vanguard Natural Resources, LLC and the private investors named
therein
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.22
|
Purchase
Agreement, dated April 18,
2007, between
Vanguard Natural Resources, LLC, Majeed S. Nami and the private
investors
named therein
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.23
|
Omnibus
Agreement, dated October 29, 2007, among Majeed S. Nami, Vanguard
Natural
Resources, LLC, Vanguard Natural Gas, LLC, Ariana Energy, LLC and
Trust
Energy Company, LLC.
|
Form
8-K, filed November 2, 2007 (File No. 001-33756)
|
||
10.24
|
Employment
Agreement, dated May 15, 2007, by and between Britt Pence, VNR
Holdings,
LLC and Vanguard Natural Resources, LLC
|
Form
S-1/A, filed July 5, 2007 (File No. 333-142363)
|
||
10.25
|
Natural
Gas Contract, dated May 26, 2003, between Nami Resources Company,
Inc. and Osram Sylvania Products, Inc.
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.26
|
Natural
Gas Purchase Contract, dated December 16, 2004, between Nami
Resources Company, LLC and Dominion Field Services, Inc.
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.27
|
Natural
Gas Purchase Contract, dated December 28, 2004, between Nami
Resources Company, LLC and Dominion Field Services, Inc.
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.28
|
Director
Compensation Agreement
|
Form
S-1/A, filed September 18, 2007 (File No. 333-142363)
|
||
10.29
|
Purchase
and Sale Agreement, dated December 21, 2007, among Vanguard Permian,
LLC
and Apache Corporation
|
Form
8-K/A, filed February 13, 2008 (File No. 001-33756)
|
||
10.30
|
Amended
Purchase and Sale Agreement, dated January 31, 2008, among Vanguard
Permian, LLC and Apache Corporation
|
Form
8-K/A, filed February 4, 2008 (File No. 001-33756)
|
||
10.31
|
Purchase
and Sale Agreement, dated July 18, 2008, among Vanguard Permian,
LLC and
Segundo Navarro Drilling, Ltd.
|
Form
8-K, filed July 21, 2008 (File No. 001-33756)
|
||
10.32
|
Form
of Indemnity Agreement dated August 7, 2008
|
Previously
filed with our Quarterly report on form 10-Q on August 13,
2008
|
||
10.33
|
Second
Amendment to First Amended and Restated Credit Agreement, dated
October
22, 2008, by and between Vanguard Natural Gas, LLC, Compass Bank,
as
lender, and Citibank, N.A., as administrative agent
|
Filed
herewith
|
||
31.1
|
Certification
of Chief Executive Officer Pursuant to Rule 13a — 14 of the
Securities and Exchange Act of 1934, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
||
31.2
|
Certification
of Chief Financial Officer Pursuant to Rule 13a — 14 of the
Securities and Exchange Act of 1934, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
||
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Filed
herewith
|
||
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Filed
herewith
|
|
VANGUARD
NATURAL RESOURCES, LLC
|
|
(Registrant)
|
|
|
Date:
November 14, 2008
|
|
|
/s/ Richard
A. Robert
|
|
Richard
A. Robert
|
|
Executive
Vice President and
|
|
Chief
Financial Officer
|
|
(Principal
Financial Officer and Principal Accounting
Officer)
|
Exhibit
No.
|
Exhibit
Title
|
Incorporated
by Reference to the Following
|
||
3.1
|
Certificate
of Formation of Vanguard Natural Resources, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
3.2
|
Second
Amended and Restated Limited Liability Company Agreement of Vanguard
Natural Resources, LLC (including specimen unit certificate for
the
units)
|
Form
8-K, filed November 2, 2007 (File No. 001-33756)
|
||
10.1
|
Amended
and Restated Credit Agreement, dated February 14, 2008, by and
between
Nami Holding Company, LLC, Citibank, N.A., as administrative agent
and L/C
issuer and the lenders party thereto
|
Previously
filed with our Form 10-K on March 31, 2008
|
||
10.2
|
Vanguard
Natural Resources, LLC Long-Term Incentive Plan
|
Form
8-K, filed October 24, 2007 (File No. 001-33756)
|
||
10.3
|
Form of
Vanguard Natural Resources, LLC Long-Term Incentive Plan Phantom
Options
Grant Agreement
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.4
|
Vanguard
Natural Resources, LLC Class B Unit Plan
|
Form
8-K, filed October 24, 2007 (File No. 001-33756)
|
||
10.5
|
Form of
Vanguard Natural Resources, LLC Class B Unit Plan Restricted
Class B Unit Grant
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.6
|
Management
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC, Vanguard Natural Gas, LLC, Trust Energy
Company,
LLC and Ariana Energy, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.7
|
Participation
Agreement, effective January 5, 2007, by and between Vinland Energy
Eastern, LLC, Vanguard Natural Gas, LLC, Trust Energy Company,
LLC and
Ariana Energy, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.8
|
Gathering
and Compression Agreement, effective January 5, 2007, by and between
Vinland Energy Gathering, LLC, Vinland Energy Eastern, LLC, Vanguard
Natural Gas, LLC and Ariana Energy, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.9
|
Gathering
and Compression Agreement, effective January 5, 2007, by and between
Vinland Energy Gathering, LLC, Vinland Energy Eastern, LLC, Vanguard
Natural Gas, LLC and Trust Energy Company
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.10
|
Gathering
and Compression Agreement, effective January 5, 2007, by and between
Vinland Energy Gathering, LLC and Nami Resources Company,
L.L.C.
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.11
|
Well
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC, Vanguard Natural Gas, LLC and Ariana Energy,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.12
|
Well
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC, Vanguard Natural Gas, LLC and Trust Energy
Company, LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.13
|
Well
Services Agreement, effective January 5, 2007, by and between Vinland
Energy Operations, LLC and Nami Resources Company, L.L.C.
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.14
|
Amended
and Restated Operating Agreement by and between Vinland Energy
Operations,
LLC, Vinland Energy Eastern, LLC and Ariana Energy, LLC, dated
October 2,
2007 and effective as of January 5, 2007
|
Form
S-1/A, filed October 22, 2007 (File No. 333-142363)
|
||
10.15
|
Operating
Agreement, effective January 5, 2007, by and between Vinland Energy
Operations, LLC, Vinland Energy Eastern, LLC and Trust Energy Company,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.16
|
Amended
and Restated Indemnity Agreement by and between Nami Resources
Company,
L.L.C., Vinland Energy Eastern, LLC, Trust Energy Company, LLC,
Vanguard
Natural Gas, LLC and Vanguard Natural Resources, LLC, dated September
11,
2007
|
Form
S-1/A, filed September 18, 2007 (File No. 333-142363)
|
||
10.17
|
Revenue
Payment Agreement by and between Nami Resources Company, L.L.C.
and Trust
Energy Company, dated April 18, 2007 and effective as of January
5,
2007
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.18
|
Gas
Supply Agreement, dated April 18, 2007, by and between Nami Resources
Company, L.L.C. and Trust Energy Company
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.19
|
Amended
Employment Agreement, dated April 18, 2007, by and between Scott W.
Smith, VNR Holdings, LLC and Vanguard Natural Resources,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.20
|
Amended
Employment Agreement, dated April 18, 2007, by and between Richard A.
Robert, VNR Holdings, LLC and Vanguard Natural Resources,
LLC
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.21
|
Registration
Rights Agreement, dated April 18,
2007, between
Vanguard Natural Resources, LLC and the private investors named
therein
|
Form
S-1/A, filed April 25, 2007 (File No.
333-142363)
|
10.22
|
Purchase
Agreement, dated April 18,
2007, between
Vanguard Natural Resources, LLC, Majeed S. Nami and the private
investors
named therein
|
Form
S-1/A, filed April 25, 2007 (File No. 333-142363)
|
||
10.23
|
Omnibus
Agreement, dated October 29, 2007, among Majeed S. Nami, Vanguard
Natural
Resources, LLC, Vanguard Natural Gas, LLC, Ariana Energy, LLC and
Trust
Energy Company, LLC.
|
Form
8-K, filed November 2, 2007 (File No. 001-33756)
|
||
10.24
|
Employment
Agreement, dated May 15, 2007, by and between Britt Pence, VNR
Holdings,
LLC and Vanguard Natural Resources, LLC
|
Form
S-1/A, filed July 5, 2007 (File No. 333-142363)
|
||
10.25
|
Natural
Gas Contract, dated May 26, 2003, between Nami Resources Company,
Inc. and Osram Sylvania Products, Inc.
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.26
|
Natural
Gas Purchase Contract, dated December 16, 2004, between Nami
Resources Company, LLC and Dominion Field Services, Inc.
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.27
|
Natural
Gas Purchase Contract, dated December 28, 2004, between Nami
Resources Company, LLC and Dominion Field Services, Inc.
|
Form
S-1/A, filed August 21, 2007 (File No. 333-142363)
|
||
10.28
|
Director
Compensation Agreement
|
Form
S-1/A, filed September 18, 2007 (File No. 333-142363)
|
||
10.29
|
Purchase
and Sale Agreement, dated December 21, 2007, among Vanguard Permian,
LLC
and Apache Corporation
|
Form
8-K/A, filed February 13, 2008 (File No. 001-33756)
|
||
10.30
|
Amended
Purchase and Sale Agreement, dated January 31, 2008, among Vanguard
Permian, LLC and Apache Corporation
|
Form
8-K/A, filed February 4, 2008 (File No. 001-33756)
|
||
10.31
|
Purchase
and Sale Agreement, dated July 18, 2008, among Vanguard Permian,
LLC and
Segundo Navarro Drilling, Ltd.
|
Form
8-K, filed July 21, 2008 (File No. 001-33756)
|
||
10.32
|
Form
of Indemnity Agreement dated August 7, 2008
|
Previously
filed with our Quarterly Report on Form 10-Q on August 13,
2008
|
||
10.33
|
Second
Amendment to First Amended and Restated Credit Agreement, dated
October
22, 2008, by and between Vanguard Natural Gas, LLC, Compass Bank,
as
lender, and Citibank, N.A., as administrative agent
|
Filed
herewith
|
||
31.1
|
Certification
of Chief Executive Officer Pursuant to Rule 13a — 14 of the
Securities and Exchange Act of 1934, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
||
31.2
|
Certification
of Chief Financial Officer Pursuant to Rule 13a — 14 of the
Securities and Exchange Act of 1934, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
||
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Filed
herewith
|
||
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Filed
herewith
|