Vanguard Natural Resources Inc. (fka VNRRQ)

[ciciagt]

Production Boost To Fuel Distribution Increases In 2012
April 16, 2012 by: Roger S. Conrad (editor of Utility Forecaster (http://www.utilityforecaster.com), the nation’s leading advisory on essential services stocks, bonds and preferred shares)

"During the fourth quarter, Vanguard Natural Resources' distributable cash flow surged by 120 percent from year-ago levels and 95 percent sequentially, enabling the LLC to cover its quarterly payout by a 1.4-to-1 margin. With cash flow likely to grow significantly in the coming year, I expect management to approve additional distribution increases in 2012.

Fourth-quarter production soared to 13,405 barrels of oil equivalent per day, with liquids output surging to 85 percent of overall revenue-up dramatically from 52 percent in 2009. The addition of Encore Energy Partners' assets also expands Vanguard Natural Resources' liquids-focused drilling inventory and the potential for bolt-on-acquisitions in adjacent acreage.

Vanguard Natural Resources has also established a sizable position in the Williston Basin, home to the Bakken Shale and considerable amounts of light oil.

Even after closing the acquisition of Encore Energy Partners, the LLC is still relatively small and could be a potential takeover candidate."

"The big question hanging over the stock: Whether Vanguard Natural Resources will be able to grow production from Encore Energy Partners' acreage, especially after the MLP's former general partner Denbury Resources (DNR) opted to slash investment in these properties."

With the disposal of the firm's Appalachian acreage, the answer to this question will have a profound effect on Vanguard Natural Resources' profitability and stock price.

With a distribution yield of 8.3 percent, the stock appears to price in this risk."

http://seekingalpha.com/article/499521-vanguard-natural-resources-production-boost-to-fuel-distribution-increases-in-2012