Wells Fargo Conference Scott W. Smith, President & CEO Richard Robert, EVP & CFO December 8, 2015.

Wells Fargo ConferenceScott W. Smith, President & CEO

Richard Robert, EVP & CFO

December 8, 2015

Forward Looking Statements

Statements made by representatives of Vanguard Natural Resources, LLC during the course of this presentation that are not historical facts are forward looking statements. These statements are based on certain assumptions and expectations made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or anticipated in the forward looking statements. These include risks relating to the satisfaction of the conditions to closing of the acquisition, uncertainties as to timing, financial performance and results, our indebtedness under our revolving credit facility, availability of sufficient cash to pay our distributions and execute our business plan, prices and demand for oil, natural gas and natural gas liquids, our ability to replace reserves and efficiently develop our reserves, our ability to make acquisitions on economically acceptable terms and other important factors that could cause actual results to differ materially from those anticipated or implied in the forward looking statements. See “Risk Factors” in our most recent annual report on Form 10-K and Item 1A. of Part II “Risk Factors” in our subsequent quarterly reports on Form 10-Q and any other public filings and press releases. Vanguard Natural Resources, LLC undertakes no obligation to publicly update any forward looking statements, whether as a result of new information or future events. This presentation has been prepared as of December 2, 2015.

Overview of Vanguard Natural Resources

Asset Profile(1)

Market Valuation

Company Profile (2) (in millions)

COMMON UNITS 130.8 MM

PREFERRED UNITS 13.8 MM

EQUITY MARKET CAP (incl. preferred) $888

TOTAL DEBT(3) $2,318

ENTERPRISE VALUE $3,206

Twenty five strategic acquisitions totaling ~$5.0 bn

~2.55 Tcfe (~425 MMBoe) total proved reserves71% proved developed 32% liquids / 68% gas2013 Production: 212 MMcfe/d2014 Production: 327 MMcfe/dQ4’15E Production: ~500 MMcfe/d

(1) Proved reserves as of 12/31/2014 based on SEC reserve report.(2) Market data as of 12/2/15 and includes 420,000 Class B units. Based off VNR closing price of $5.36.(3) Debt as of 11/9/15.

3

Upstream oil & gas LLC, headquartered in Houston, TX; Initial Public Offering – “VNR” – October 2007 had a Total Enterprise Value of ~$240mm

Monthly distribution of $0.1175 per unit ($1.41 annualized); generates ~26% yield at December 2, 2015 of $5.36;

In 2012, VNR was the first master limited partnership to institute a monthly cash distribution policy, beginning with our July 2012 distribution

In 2013, VNR was the first master limited partnership to issue publicly traded preferred units with its initial 7.875% Series A Cumulative Redeemable Perpetual Preferred Units

In total, VNR has raised net proceeds of more than $328 million from three preferred equity offerings

At-the-Market Program (ATM) allows us to systematically sell equity at a much more cost effective means

In 2014, VNR raised net proceeds of more than $148 million via common equity and $1.2 million via preferred equity

Since restarting ATM on March 17, 2015 and thru July 6, 2015 prior to black out window, VNR raised net proceeds of approximately $36 million

Experienced Management Team

4

Name Title Prior Affiliations Years of Experience

Scott W. Smith President and CEO• Ensource Energy• The Wiser Oil Company• San Juan Partners

>34

Richard A. Robert EVP and CFO• Enbridge USA• Midcoast Energy Resources• Various energy-related entrepreneurial ventures

>27

Britt PenceExecutive Vice Presidentof Operations

• Anadarko Petroleum• Greenhill Petroleum• Mobil

>30

Mark Carnes Director of Acquisitions• Synergy Oil & Gas• Petromark• Torch Energy Advisors

>37

Chris Raper Land Manager• Synergy Oil & Gas• Amoco Production

>35

Rod Banks Marketing Manager• Apache Corporation• Mariner Energy• Producers Energy Marketing

>34

Geographically Diversified Reserve Base

Core Areas

Note: Proved reserves as of 12/31/2014 based on SEC reserve report. Reserves and production pro forma for the EROC and LRE transactions and represents Q3 2015 average daily net production.

Overview

Proved Reserves by Area

• ~2.55 Tcfe (~425 MMBoe) proved reserves• 68% gas and 32% liquids • 71% proved developed• R/P is ~14 years

5

~2.55 Tcfe (~425 MMBoe)

- Primarily Natural Gas

- Primarily Oil

Green River Basin• Proved Reserves: 765 Bcfe• 84% gas and 52% Proved

Developed• 134 MMcfe/d net production

Piceance Basin• Proved Reserves: 442

Bcfe• 78% natural gas and

77% Proved Developed• 89 MMcfe/d net

production

Permian Basin• Proved Reserves: 361 Bcfe• 57% liquids and 80% Proved


Gulf Coast Basin• Proved Reserves: 271 Bcfe• 54% natural gas and 68%

Proved Developed • 47 MMcfe/d net production

Wind River Basin• Proved Reserves: 37 Bcfe• 82% natural gas and 95% Proved


Williston Basin• Proved Reserves: 25 Bcfe• 95% liquids and 96% Proved


Powder River Basin• Proved Reserves: 24 Bcfe• 100% natural gas and 77%

Proved Developed• 21 MMcfe/d net production

Big Horn Basin• Proved Reserves: 104 Bcfe• 96% liquids and 95% Proved


30%

21%17%

14%

11%

4%

1% 1% 1%

GREEN RIVER

ARKOMA & ANADARKO

PICEANCE

PERMIAN

GULF COAST

BIG HORN

WIND RIVER

WILLISTON

POWDER RIVER

Arkoma & Anadarko Basin• Proved Reserves: 524 Bcfe• 74% gas and 80% Proved


VNR Investment Thesis:Disciplined Acquisition Strategy

Strong record of evaluating and integrating assets, completing over $5.0 billion in acquisitions since VNR’s IPO in 2007

Designated business development and acquisition evaluation team

Review between 125-150 and evaluate approximately 50 acquisition candidates each year

Screen ~125-150 opportunities annually

Evaluate ~50

Bid ~40

Close2-8

Prudent Screening Approach

Acquisitions Completed Since IPO in 2007

Asset Profile

6Source: Company disclosure and internal projections(1) Based on Company’s 2007 10-K.(2) Proved reserves based on 2014 10-K; proved reserves and Q3 2015 production pro forma for the EROC and LRE transactions.

2 2 2

8

3

2

4

2

$0

$300

$600

$900

$1,200

$1,500

2008 2009 2010 2011 2012 2013 2014 2015

($ M

M)

Natural Gas Liquids # of Deals

2007(1) PF 2015(2)

Total Proved Reserves (Bcfe) 67 2,553

%PD 75% 69%

% Liquids 3% 31%

Production (mmcfe/d) 12 513

Pinedale / East Haynesville Returns

7

Pinedale Economics East Haynesville Economics

Even in today’s commodity environment, the Pinedale and East Haynesville generate good rate of returns without assuming any savings on the drilling and completion costs

Budget of $3.8 MM per well (Q3 2015 AFE of $3.25 MM per well)

EUR of ~5.5 Bcfe

Average program rate of return of 25%+

Reserves estimation technique allows for selective participation

Vertical Wells (2 planned) Budget of $2.25 MM per well

(actual cost for the first well was $2.25 MM)

EUR of ~2.25 Bcfe Expected average rate of return in

excess of 50% First vertical well came online in Q3

2015 at an IP 30 rate of 1.9 MMcf of gas per day and 147 barrels of oil per day of production

Horizontal Well (1 planned) Budget of $7.5 MM per well We anticipate seeing an impact in

production from the horizontal well by Q4 2015

Strategy Dependent on Acquisitions

1) Continue to Make Accretive Acquisitions- Take advantage of significant opportunities in Q42015-2016 Large inventory in the U.S. of mature oil and natural gas basins which provide significant

opportunity for future growth and consolidation

2) Commodity Optionality – Today’s commodity environment creates a unique opportunity to buy assets at historically attractive pricing Acquiring assets today provides long-term optionality should prices improve on the base

PDP assets Drilling inventory that is not economic today can be acquired for little to no value

providing future upside potential

3) Sources of Capital – Vanguard has many avenues for capital to complete large and small acquisitions ~$115 MM in liquidity after the Fall Borrowing Base Redetermination of $1.8 billion Option to monetize assets to enhance liquidity (recently acquired SCOOP/STACK

properties) Utilize VNR units to purchase assets and/or other entities (as with LRE and EROC

acquisitions) Partnering with private equity to acquire larger assets Second lien debt Reduction in capital spending Alternative distribution strategies (i.e. fixed/variable model) Opportunistically use at-the-market equity program, which is not disruptive to unit price

and less expensive

8

LRR Energy, L.P. Overview

9

Gulf Coast RegionMid-Continent RegionPermian Region

Mid-Continent Region

· Acreage: 146,753 / 27,338 net

· Proved Reserves: 85.4 Bcfe (39% liquids)

· Q3 2015 Production: 12.8 Mmcfe/d

Gulf Coast Region

· Acreage: 12,837 gross / 8,769 net

· Proved Reserves: 19.9 (33% liquids)


Permian Region

· Acreage: 149,408 gross / 122,002 net

· Proved Reserves: 97.9 Bcfe (68% liquids)


Asset Profile (1) Transaction Highlights

• Closing announced on Monday, October 5, 2015

• Total consideration of ~15.4mm VNR common units and the assumption of $290mm in debt

• LRE’s long-life, low-decline, mature assets are well-suited for VNR’s upstream MLP model

• Assets add additional scale in VNR’s existing Permian and Arkoma Basins

• Approximately 1,290 gross producing wells and approximately 158,000 net acres

• Acquisition is immediately accretive to distributable cash flow per unit

Asset Profile (1)

39%

48%

13%NGLs

Oil

Gas

Reserves by Hydrocarbon

Reserves by Category

(1) Proved reserves as of 12/31/14 based on SEC pricing.

88%

12%

PD

PUD

Eagle Rock Energy Partners, L.P. Overview

10

(1) Proved reserves as of 12/31/14 based on SEC pricing.

Transaction Highlights• Closing announced on Thursday, October 8, 2015

• Total consideration of ~28.3mm VNR common units and the assumption of $173.5mm in debt

• Eagle Rock’s long-life, mature assets are well-suited for VNR’s upstream model

• Assets add additional scale in VNR’s existing Gulf Coast and Permian basins and establishes a new operating platform in the SCOOP/STACK play in the Anadarko basin

• Retained experienced personnel from Eagle Rock to expand Vanguard’s employee base

• Approximately 1,778 producing wells and approximately 202,632 net acres

• Acquisition is expected to be neutral to cash flow in 2015 and accretive in 2016 and beyondAsset Profile (1)

Reserves by Hydrocarbon

Reserves by Category

Asset Profile (1)

21%

53%

26%NGLs Oil

Gas

Mid-Continent Assets

Proved Reserves: 331.7 BcfeQ2 2015 Production: 61.6 MMcfe/d% Oil / Gas: 49% / 51%Net Acreage: 150,314Op./Non-Op. Wells: 307 / 1,059

Permian Area

Proved Reserves: 20.0 BcfeQ2 2015 Production: 8.3 Mmcfe/d% Oil / Gas: 67% / 33% Net Acreage: 22,666Op./Non-Op. Wells: 191 / 53

Gulf Coast Area

Proved Reserves: 65.8 BcfeQ2 2015 Production: 12.9 MMcfe/d% Oil / Gas: 79% / 21%Net Acreage: 29,653Op./Non-Op. Wells: 63 / 105

Total Upstream

Proved Reserves: 417.5 BcfeOp. / Non-Op. Wells: 561 / 1,217Q2 2015 Production: 83.1 Mmcfe/dNet Acreage: 202,632

TX

NM OK

LA MS

AR

AL

Mid-Continent Assets

Proved Reserves: 226.9 BcfeQ3 2015 Production: 60.5 MMcfe/d% Liquids / Gas: 37% / 63%Net Acreage: 150,314Op./Non-Op. Wells: 307 / 1,059

Permian Area

Proved Reserves: 21.7 BcfeQ3 2015 Production: 8.0 Mmcfe/d% Liquids / Gas: 66% / 34% Net Acreage: 22,666Op./Non-Op. Wells: 191 / 53

Gulf Coast Area

Proved Reserves: 69.7 BcfeQ3 2015 Production: 15.3 MMcfe/d% Liquids / Gas: 74% / 26%Net Acreage: 29,653Op./Non-Op. Wells: 63 / 105

Total Upstream

Proved Reserves: 318.2 BcfeOp. / Non-Op. Wells: 561 / 1,217Q3 2015 Production: 83.8 Mmcfe/dNet Acreage: 202,632

78%

22%

PD

PUD

EROC Mid-Continent Position

11

Mid-continent comprises ~80% of the proved reserves as of 6/30/15 ~20,000 net acres in the highly prospective oil-weighted South Central Oklahoma Oil

Province (SCOOP) play and ~5,000 net acres in the STACK. Substantially all of EROC acreage is held by production

SCOOP/STACK Asset Map -- ~ 25,000 Net Acres

Attractive Operational OverlapVNR + LRE + EROC Combined

12

Operational Metrics of Pro Forma CompanyVNR + LRE + EROC

Source: Management presentation, company investor presentations, company projections and company websites.(1) Reserves based on 12/31/14 SEC reserve report.

Vanguard LRR Energy PF Vanguard

Reserves(1)

by Category

Reserves by

Hydrocarbon

Q3 2015 Revenue

by Hydrocarb

on (Unhedged

)

203 Bcfe(1)

$30 MM

2,553 Bcfe

$139 MM$91 MM

2,031 Bcfe

Eagle Rock Energy

$18 MM

PDP64%

PDNP4%

PUD32%

PDP73%

PDNP15%

PUD12%

PDP72%

PDNP6%

PUD22%

PDP66%

PDNP5%

PUD29%

318 Bcfe(1)

13

2,553 Bcfe2,031 Bcfe 203 Bcfe (1) 318 Bcfe (1)

39%

48%

13%NGLs

Oil

Gas

21%

53%

26%NGLs Oil

Gas

$34

$51

$6Oil

Gas

NGLs

$13

$4

$1

Oil

Gas

NGLs

$15

$10

$5

Oil

Gas

NGLs

$62

$65

$13

Oil

Gas

NGLs

15%

72%

13%

NGLs Oil

Gas

18%

68%

14%NGLs Oil

Gas

Financial Overview

Historical Yield And Notable AcquisitionsAnd Distribution Activity Since 2007 IPO

15

Source: Bloomberg data as of 11/13/15

Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-150%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Yield

In January 2008,

purchased Permian

assets from Apache for

$73mm

In July 2008,

purchased S. TX

assets from Lewis

Energy for $53mm

In July 2009,

purchased additional S.TX assets from Lewis Energy for

$52mm

In December

2009, purchased Permian

assets for $55mm

In December, completed

merger with ENP

(remaining 53.2%);

$814mm merger

In May, purchased assets in

MS, TX and NM for

$115mm

In December, purchased

100% interest in ENP’s GP and a 46.7% LP interest in

ENP from Denbury for

$380mm Completed $200mm in

other acquisitions

In June, purchased

assets in the Arkoma Basin for $434mm

In December, closed the $329mm

acquisition of assets from Bill

Barrett Corp

In April, closed the $269mm

Permian acquisition from Range Resources

In January, purchased

Pinedale/Jonah assets for $549mm

In August, purchased assets in

North Louisiana and East Texas for

$275mm

In September, purchased assets in the Piceance Basin

for $509mm; borrowing base

increased to $2 bln

Beginning January 2015, reduced

monthly common distribution to $1.41 per unit

annualized

March: $1.78

annualized distribution

October: $2.00


January: $2.10


July: $2.20


September: $2.43


April: $2.49


March: $2.52


October 5th, Vanguard closes merger with LRR

Energy for $413MM

October 8th, Vanguard closes merger deal with Eagle Rock Energy

Partners for $437MM

Pro Forma Capitalization and Liquidity

16(1) Includes pro forma impact of EROC and LRE transactions.(2) LTM EBITDA calculated as of 9/30/15.(3) Based off 2014 year end reserves along with SEC pricing at year end 2014.

Capitalization Table (Current)

($ in millions) Vanguard

Cash $10

Credit Facility 1,6907.875% Senior Notes due 2020 5508.375% Senior Notes due 2019 51Lease Financing Obligations 27Total Debt 2,318

Member's Equity Market CapitalizationCommon and Class B Units 799Series A Preferred Units 43Series B Preferred Units 103Series C Preferred Units 64Total Member's Equity 1,008

Total Capitalization 3,326

Metrics:Net Debt / LTM EBITDA (2) 3.9xNet Debt / Capitalization 69%Net Debt / Proved Reserves ($ / Mcfe) (3) $0.90Net Debt / Proved Developed Reserves ($ / Mcfe) (3) $1.28

Peer G&A and LOE as % of Revenue1H’15

Source: Company 10-Q filings for Q3’15

17

LOE % Of Revenue G&A (cash) % Of Revenue

16.6%19.3% 21.3% 22.3% 20.9%

35.5%

26.5% 24.8% 24.7% 26.9%30.4%

48.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2010 2011 2012 2013 2014 2015 YTD

Vanguard Peer Average

4.9% 4.4% 4.9%4.0%

3.0%

5.1%

8.7% 8.7%8.1%

6.9%7.6%

11.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2010 2011 2012 2013 2014 2015 YTD

Vanguard Peer Average

Hedges Mitigate Commodity Price Risk

18 Note: Hedge prices reflect a weighted average of swap prices, floor prices on collars and long put prices on three way collars. Charts do not include impact of short puts or RBA’s. Assumes additional production from capital spending in 2015 and beyond.

PF Natural Gas Hedges PF Oil Hedges

Combined transactions modestly improve Vanguard’s hedge book, increasing volumes hedged and increases weighted average price in most years

84%

58%

26%

1%

11%

13%

15% 31%

61%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2015 2016 2017

MM

Btu

Swaps Three Way Collars Unhedged

$4.28

$4.35 $4.19

66%

34%

17%

10%

$83.27

$76.04

6%

$86.71

8%

19%83%

0

1,000

2,000

3,000

4,000

5,000

2015 2016 2017

MB

bls

Swaps Collars Puts Three Way Collars Unhedged

16%

41%

A History of Oil Prices

Source: Bloomberg data as of 11/13/15.

19

Oil Historical Pricing Coupled with Forward Curves

Forward Curve at Yearly High

Forward Curve at Year Low

$30

$50

$70

$90

$110

$130

$150

Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

$/Bb

l

Current Upstream MLP Yields

Upstream MLP yields range from 17-53%, with a median of 23%

Current Yields

Source: Data as of 11/13/15.(1) LINE distribution suspended.(2) MCEP distribution suspended.

20

53.2%50.8%

24.1% 23.1% 22.4%

17.2%

0.0% 0.0%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

EVEP ARP MEMP VNR BBEP LGCY LINE MCEP(1) (2)

Investment Questions

Invest In MLPs? Medium To Long-Term Investor?

Current Income Is Important?

Like Potential For Income Growth?

Looking For Tax Advantaged Income?

OK With Getting A K-1?

Invest In Upstream MLPs? Believe Oil/Gas Prices Will Improve?

Believe Better Yield Offsets Commodity Price Risk vs. Fixed Fee Midstream Options?

Can Handle Near Term Unit Price Volatility?

Simply Playing Commodity Prices – Better Alternatives Than Upstream MLP’s?

Believe Inflation Will Increase?

Invest In VNR? Believe Increased Natural Gas Demand Will Ultimately Allow Prices To Improve?

Believe Our Proactive Management Philosophy On Adding Assets In The Current Commodity Price Downturn Will Provide Significant Long-Term Value?

21

Appendix

VNR Basins: North Operated & Non-operated

23

Big Horn Basin Green River Basin Piceance Basin

Powder River Basin Williston Basin Wind River Basin

VNR Basins: South Operated & Non-operated

24

Arkoma & Anadarko Basins

Gulf Coast Basin Permian Basin

Wells Fargo Conference Scott W. Smith, President & CEO Richard Robert, EVP & CFO December 8, 2015.

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Transcript of Wells Fargo Conference Scott W. Smith, President & CEO Richard Robert, EVP & CFO December 8, 2015.