This Week's Energy IPOs: CVR Energy, Vanguard Natural Resources

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Includes: CVI, VNR
by: Abbi Adest

There are two energy IPOs on tap for this week: CVR Energy Inc (NYSE:CVI), an independent company that refines transportation fuel and produces fertilizer, based in the Midwest; and Vanguard Matural Resources (NYSE:VNR), a natural gas company that acquires and exploits mature properties.

All quotations are from the companies' most recent S-1 filings with links provided.

CVR ENERGY, INC. (CVI) Business Overview (from prospectus)

We are an independent refiner and marketer of high value transportation fuels and, through a limited partnership, a producer of ammonia and urea ammonia nitrate, or UAN, fertilizers. We are one of only seven petroleum refiners and marketers in the Coffeyville supply area (Kansas, Oklahoma, Missouri, Nebraska and Iowa) and, at current natural gas prices, the nitrogen fertilizer business is the lowest cost producer and marketer of ammonia and UAN in North America.

Offering:18.5 million shares at $18.00 - $20.00 per share. Net proceeds of approximately $318.65 million will be used to repay debt.

Lead Underwriters: Goldman Sachs, Deutsche Bank

Financial Highlights:

Petroleum net sales were $2,880.4 million for the year ended December 31, 2006 compared to $903.8 million for the 174 days ended June 23, 2005 and $1,363.4 million for the 233 days ended December 31, 2005... Petroleum cost of product sold exclusive of depreciation and amortization was $2,422.7 million for the year ended December 31, 2006 compared to $761.7 million for the 174 days ended June 23, 2005 and $1,156.2 million for the 233 days ended December 31, 2005... Petroleum direct operating expenses exclusive of depreciation and amortization were $135.3 million for the year ended December 31, 2006 compared to direct operating expenses of $52.6 million for the 174 days ended June 23, 2005 and $56.2 million for the 233 days ended December 31, 2005... Petroleum operating income was $245.6 million for the year ended December 31, 2006 as compared to $76.7 million for the 174 days ended June 23, 2005 and $123.0 million for the 233 days ended December 31, 2005.

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VANGUARD NATURAL RESOURCES (VNR)

Business Overview (from prospectus)

We are an independent natural gas and oil company focused on the acquisition, development and exploitation of mature, long-lived natural gas and oil properties. Our primary business objective is to generate stable cash flows allowing us to make quarterly cash distributions to our unitholders, and over time to increase our quarterly cash distributions. Our properties are located in the southern portion of the Appalachian Basin, primarily in southeast Kentucky and northeast Tennessee.

Offering: 5.3 million shares at $19.00 - $21.00 per share. Net proceeds of approximately $97.7 million will be used to repay debt, pay expenses incurred in this repayment and for working capital.

Lead Underwriters: Citi, Lehman Brothers

Financial Highlights:

Natural gas and oil sales decreased $2.1 million to $38.2 million during the year ended December 31, 2006 as compared to the year ended December 31, 2005... During the year ended December 31, 2006, we hedged approximately 53% of our natural gas production, which resulted in revenues that were $2.2 million less than we would have achieved at unhedged prices. During the year ended December 31, 2005, we hedged approximately 68% of our natural gas production, which resulted in revenues that were $10.0 million less then we would have achieved at unhedged prices... Lease operating expenses increased $0.3 million to $4.9 million for the year ended December 31, 2006 as compared to the year ended December 31, 2005 due to the 100 additional wells drilled in 2006...

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