Vanguard Natural Resources (VNR) is increasing its natural gas reserves to improve long-term financial performance. The company plans to acquire matured properties and thus ensure long-term stable production of natural gas. While other major oil- and gas-producing companies such as Pioneer Natural Resources (PXD) and Devon Energy (DVN) are shifting towards oil production due to low natural gas prices, Vanguard continues increasing its natural gas matured assets.
Vanguard reported its total proved reserve base of around 1.9 trillion cubic feet of natural gas equivalent (tcfe), which includes 67% gas and 33% liquids. With growing gas reserves, Vanguard has already achieved an increased average production of 35,250 barrels of oil equivalent per day (boepd) during its third quarter, where total natural gas production accounted for around 12,398 million cubic feet (mmcf), an improvement of 50% year over year. As the company has continued acquiring more natural gas matured assets, I expect it will see higher natural gas production this year through its growing natural gas reserve.
Growth continues with acquisition
In a recent disclosure, Vanguard concluded the acquisition agreement with Anadarko Petroleum (APC) for its Pinedale and Jonah field assets in southwestern Wyoming. With estimated reserve life of 20 years, this property has a total proven reserve of around 847 billion cubic feet equivalent (bcfe). The acquisition of these mature gas fields will provide a significant growth opportunity for the company. The current production rate from these fields has recorded 113.4 million cubic feet equivalent (mmcfe) per day, and it is expected that total production will increase by 55%. Vanguard successfully added around 14,000 net acres through this acquisition. Most of the total production was natural gas (80%) and NGL (16%), and only 4% was reported as oil production. Apart from the expected boost in natural gas production from the acquired fields, the company increased its
