Monthly Average FRISK Scores. (845) Bankrupt

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1 Vanguard Natural Resources, LLC (NASDAQ:VNR) filed for bankruptcy protection on February 1, 2017! Here s what you might have seen for your portfolio s FRISK history report last month Monthly Average FRISK Scores Bankrupt 1

2 Here s what the Company s report detail shows 2

3 Let s take a closer look at our proprietary FRISK Score BK 2016 Crowd sourcing has enhanced the FRISK score s accuracy since implementation. The way our subscribers (mainly credit and purchasing managers at large companies) were using our service helped signal heightened risk at Vanguard Natural Resources, LLC. (Read more at 3

4 Look at the stock performance page for Vanguard Natural Resources, LLC One of the inputs of the FRISK score is a company s stock market capitalization, adjusted for dividends, and its volatility over the course of a year. Incorporating this information allows us to capture the wisdom of markets on a real time basis and ensure our subscribers are getting the most up to date view of the risks they face. 4

5 Let s take a look at the FRISK Stress Index for the Oil and Gas Operations industry. The average probability of failure for SIC code 1311 spiked but has since fallen dramatically. But, Vanguard Natural Resources has continued to struggle, as evidenced by its inability to move higher than a FRISK of 1. 5

6 Look at the Peer Analysis Bottom quartile on key profitability ratios (shown in red) vs. its peers in Oil & Gas Operations With a simple button click, subscribers can see all of a Company s competitors which could be your alternate suppliers or new customers 6

7 need more insight? Look at the Quarterly Performance Ratios Non-existent interest coverage ratio 7

8 still more insight? Look at the Quarterly Leverage Ratios Total assets and tangible assets fell significantly over the first nine months of

9 plus looking at our News Alerts you would have seen Vanguard Natural Resources receives notice of delisting from NASDAQ The Company reports a borrowing base deficiency of approximately $103.5MM Moody s downgrades the Company s rating to Caa3 from B3 9

10 Management notes in the MD&A section of its 3 rd Quarter Form 10-Q filing that on November 3, 2016 it completed its semi-annual redetermination of its borrowing base and that it had a remaining borrowing base deficiency of $187.5 million. The Company intends to repay this deficiency in equal monthly installments of $37.5 million commencing in January However, with approximately $30 million of cash, the Company appears strapped for cash. Anticipating future insufficient cash flow from operations, Vanguard plans to sell assets, reduce /delay some drilling programs, and raise additional capital through nontraditional lending. Failure to repay any of the installments due to cure the borrowing base deficiency will constitute an event of default under the Credit Agreement. In addition, the overall decline in commodity prices in recent years has had a negative impact on the price of the Company s common and preferred units. Based on current market conditions, the Company believes that it will be difficult to fund any acquisition, capital expenditures, and development of oil and natural gas properties through traditional public equity and debt markets, as it had in the past. and in January 2017, Vanguard Natural Resources, LLC files for bankruptcy 10