Vanguard Natural Resources, LLC (NASDAQ:VNR) Files An 8-K Regulation FD Disclosure

As previously disclosed, Vanguard Natural Resources, LLC (the
Company) and certain subsidiaries (such subsidiaries, together
with the Company, the Debtors) filed voluntary petitions for
relief (the cases commenced thereby, the Chapter 11 Cases) under
chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of Texas (the
Bankruptcy Court). The Chapter 11 Cases are being administered
under the caption In re Vanguard Natural Resources, et al.

The Company has filed its Second Amended Joint Plan of
Reorganization, dated May 31, 2017 (the Plan of Reorganization),
to which, upon the consummation of the Plan of Reorganization,
the Company will sell all of its assets to a corporation (the
Acquiring Corporation) owned by those parties participating in
the rights offering and the second lien lenders in exchange for
the assumption of the Companys first lien debt, the assumption of
the Companys second lien debt, a cash payment from the Acquiring
Corporation, common stock of the Acquiring Corporation and
warrants to acquire common stock of the Acquiring Corporation. On
June 2, 2017, the Bankruptcy Court entered the Order: (I)
Approving Debtors Disclosure Statement for Second Amended Joint
Plan of Reorganization; (II) Establishing Voting Record Date;
(III) Approving Solicitation Packages and Distribution
Procedures; (IV) Approving Forms of Ballot and Establishing
Procedures for Voting on Joint Plan of Reorganization; (V)
Approving Forms of Notice to Non-Voting Classes under Plan; (VI)
Establishing Voting Deadline to Accept or Reject Plan; (VII)
Approving Procedures for Vote Tabulations; (VIII) Approving
Rights Offering Procedures and Related Materials; and (IX)
Establishing Confirmation Hearing Date and Notice and Objection
Procedures in Respect Thereof>(the Order). The Company deems
the disclosure contained in this Item 7.01 to be accurate and
material following the entry of the Order.

Upon consummation of the transaction outlined briefly above and
outlined in detail in the Plan of Reorganization, the Company
expects that the Company will recognize both cancellation of
indebtedness income and a net loss on the sale of all of its
assets. Based on our current expectations of total enterprise
value of $1.425 billion as stated in the Plan of Reorganization,
the Company expects that there will be cancellation of
indebtedness income allocated to the holders of the common units
of the Company who are holders of record on the consummation date
of the Plan of Reorganization. In addition, the Company expects a
net taxable loss will be allocated to the holders of the common
units who are holders of record on the consummation date of the
Plan of Reorganization. Exhibit 99.1 to this Current Report on
Form 8-K is furnished to provide, in summary form and for
illustrative purposes only, additional information regarding a
range of estimated taxable income or loss, as applicable, that
may be recognized by holders of the Companys common units in 2017
who are holders of record on the consummation date of the Plan of
Reorganization, including in connection with cancellation of
indebtedness income and taxable loss arising from transactions
contemplated in the Plan of Reorganization. A holders actual net
gain or loss will depend upon the length of time the holder has
held the common units, the cumulative amount of depletion and
depreciation allocated to the holder to date, and the amount paid
by the holder to acquire such common units. Exhibit 99.1 to this
Current Report on Form 8-K is not intended to be an illustrative
example for any common unitholders who have sold or will sell
their common units prior to the consummation date of the Plan of
Reorganization.

The cancellation of indebtedness income and the net taxable loss
described above will be recognized by the Company upon the
consummation of the Plan of Reorganization which the Company
expects will occur in 2017. The Companys cancellation of
indebtedness income and net taxable loss arising from the
consummation of the Plan of Reorganization will be allocated to
holders of the common units as of the effective date of the Plan
of Reorganization. For those common unitholders who are holders
of record on the effective date of the Plan of Reorganization,
the Company expects a net taxable loss will be allocated to most
holders of common units and will be available to offset the
cancellation of indebtedness income allocated to such holder and
that, depending on the amount of the net taxable loss allocated
to a holder, such net taxable loss may fully offset the
cancellation of indebtedness income allocated to such holder.
Losses carried forward by a holder from prior years may be used
to offset income allocated to such holder. Losses allocated to a
holder may not be claimed to the extent those losses exceed the
holders tax basis in its common units and preferred units of the
Company.

The information in this Item 7.01 of this Current Report on Form
8-K, including the attached Exhibit 99.1, is being furnished to
General Instruction B.2 of Form 8-K and shall not be deemed to be
filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, is not subject to the liabilities of that
section and is not deemed incorporated by reference in any of the
Debtors filings under the Securities Act of 1933, as amended,
unless specifically identified therein as being incorporated
therein by reference.

Item 9.01. Financial Statements and Exhibits.