Form 8-K Vanguard Natural Resourc For: Apr 01

Article Stock Quotes (1)

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 8/12/2026

1. CRWV
2. SMCI
3. GAMI
4. LITE
5. SPY

6. ONON
7. CAVA
8. CSCO
9. NTHI
10. ETOR

Top News Most Read Special Reports

April 1, 2019 7:04 AM EDT

E-mail

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 31, 2019

Vanguard Natural Resources, Inc.

(Exact name of registrant as specified in its charter)



Delaware	001-33756	80-0411494
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5847 San Felipe, Suite 3000

Houston, Texas 77057

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (832) 327-2255

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT

Item 1.01. Entry into a Material Definitive Agreement

Debtor-in-Possession Financing

In connection with the 2019 Chapter 11 Cases (defined below), on the Petition Date, the 2019 Debtors (defined below) filed a motion (the “DIP Motion”) seeking, among other things, interim and final approval of the 2019 Debtors’ use of cash collateral and debtor-in-possession financing on terms and conditions set forth in a Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”) among VNG (the “DIP Borrower”), the financial institutions or other entities from time to time parties thereto, as lenders, Citibank N.A., as administrative agent (the “DIP Agent”) and as issuing bank. The initial lender under the DIP Credit Agreement shall be Citibank N.A. The DIP Credit Agreement, if approved by the Bankruptcy Court, contains the following terms:


•	a super-priority senior secured revolving credit facility in the aggregate amount of up to $65.0 million, and $20.0 million available on an interim basis (the “New Money Facility”);


•	a “roll up” of $65.0 million of the outstanding principal amount of the revolving loans under Vanguard Natural Resources, Inc.’s (the “Company”) Credit Agreement (the “Roll-Up”, and, together with the New Money Facility, collectively, the “DIP Facility”);

•

proceeds of the New Money Facility may be used by the DIP Borrower to (i) pay certain costs and expenses related to the 2019 Chapter 11 Cases, (ii) make payments provided for in the DIP Motion, including in respect of certain “adequate protection” obligations and (iii) fund working capital needs, capital improvements and other general corporate purposes of the DIP Borrower and its subsidiaries, in all cases subject to the terms of the DIP Credit Agreement and applicable orders of the Bankruptcy Court;

•

the maturity date of the DIP Credit Agreement is expected to be the earliest to occur of (a) nine months after the Petition Date, (b) 5 days after the Petition Date, if the interim DIP order has not been entered prior to the expiration of such period, (c) 35 days after the entry of the interim DIP order, if the Bankruptcy Court has not entered the final DIP order on or prior to such date, (d) the consummation of a sale of all or substantially all of the equity and/or assets of the DIP Borrower and its subsidiaries, (e) the occurrence of an Event of Default (subject to any cure periods), and (f) the effective date of a plan of reorganization in the 2019 Chapter 11 Cases.


•	interest will accrue at a rate per year equal to the LIBOR rate plus 5.50%, or the adjusted base rate plus 4.50% per annum;

•

in addition to fees to be paid to the DIP Agent, the DIP Borrower is required to pay to the DIP Agent for the account of the lenders under the DIP Credit Agreement, an unused commitment fee equal to 1.0% of the daily average of each lender’s unused commitment under the New Money Facility, which is payable in arrears on the last day of each calendar month and on the termination date for the facility for any period for which the unused commitment fee has not previously been paid;

•

the obligations and liabilities of the DIP Borrower and its subsidiaries owed to the DIP Agent and lenders under the DIP Credit Agreement and related loan documents will be entitled to joint and several super-priority administrative expense claims against each of the DIP Borrower and its subsidiaries in their respective 2019 Chapter 11 Cases subject to limited exceptions provided for in the DIP Motion, and will be secured by (i) a first priority, priming security interest and lien on all encumbered property of the DIP Borrower and its subsidiaries, subject to limited exceptions provided for in the DIP Motion, (ii) a first priority security interest and lien on all unencumbered property of the DIP Borrower and its subsidiaries, subject to limited exceptions provided for in the DIP Motion and (iii) a junior security interest and lien on all property of the DIP Borrower and its subsidiaries that is subject to (a) a valid, perfected and non-avoidable lien as of the petition date (other than the first priority and second priority prepetition liens) or (b) a valid and non-avoidable lien that is perfected subsequent to the petition date, in each case subject to limited exceptions provided for in the DIP Motion;


•	the DIP Credit Agreement is subject to customary covenants, prepayment events, events of default and other provisions;


•	generally, any undrawn commitments on the New Money Facility as of the effective date of a plan of reorganization are contemplated to be converted into an Exit RBL facility and the Roll-Up is contemplated to be converted into an Exit term loan as of such date.

The DIP Credit Agreement is subject to final approval by the Bankruptcy Court, which has not been obtained at this time, and the Roll-Up is subject to the entry of the Final Dip Order by the Bankruptcy Court. The foregoing description of the DIP Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the final, executed DIP Credit Agreement, as approved by the Bankruptcy Court.

Credit Agreement Amendment

On March 31, 2019, the Company entered a Ratification and Fourth Amendment to Fourth Amended and Restated Credit Agreement (the “Fourth Amendment”) that, among other things, amends the Fourth Amended and Restated Credit Agreement, dated as of August 1, 2017, by and among Vanguard Natural Gas, LLC, as borrower, the guarantors party thereto, Citibank N.A., as administrative agent, and the other lenders party thereto from time to time (as amended or modified prior to the date hereof, the “Credit Agreement”) to permit the lenders thereunder to assign all or a portion of their respective rights and obligations with respect to revolving loans and commitments under the Credit Agreement, on the one hand, and the term loans under the Credit Agreement, on the other hand, on a non-pro rata basis.

The foregoing description of the Fourth Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Fourth Amendment, a copy of which will be filed as an exhibit to our Form 10-K for the year ended December 31, 2018.

Item 1.03. Bankruptcy or Receivership.

On March 31, 2019, the Company and certain subsidiaries (such subsidiaries, together with the Company, the “2019 Debtors”) filed voluntary petitions for relief (collectively, the “2019 Bankruptcy Petitions” and, the cases commenced thereby, the “2019 Chapter 11 Cases”) under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The 2019 Debtors filed a motion with the Bankruptcy Court seeking to jointly administer the 2019 Chapter 11 Cases under the caption “In re: Vanguard Natural Resources, Inc., et al.”

No trustee has been appointed and the Company will continue to manage itself and its affiliates and operate their businesses as “debtors-in-possession” subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Company expects to continue its operations during the pendency of the 2019 Chapter 11 Cases. To assure ordinary course operations, the 2019 Debtors have filed motions seeking orders from the Bankruptcy Court approving a variety of “first day” motions, including motions that authorize the 2019 Debtors to maintain their existing cash management system, to secure debtor-in-possession financing and other customary operational and financing relief. Such relief has not yet been granted by the Bankruptcy Court.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

of a Registrant.

The information set forth under the captions “Debtor-in-Possession Financing” and “Credit Agreement Amendment” in Item 1.01 above are incorporated into this Item 2.03 by reference.

Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation

Under an Off-Balance Sheet Arrangement.

The filing of the Chapter 11 Cases described above in Item 1.03 constitutes an event of default that accelerated the Company’s obligations under the following debt instruments (the “Debt Instruments”):


•	the Credit Agreement; and


•	the 9.0% Senior Secured Second Lien Notes due 2024 (the “Second Lien Notes”) issued pursuant to the Amended and Restated Indenture, dated as of August 2, 2017, among Vanguard Natural Resources, Inc., the guarantors named therein and Delaware Trust Company, as trustee and collateral trustee.

The Debt Instruments provide that as a result of the Chapter 11 Cases the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.

Item 7.01. Regulation FD Disclosure.

In connection with the filing of the Chapter 11 Cases, the Company issued a press release on April 1, 2019, a copy of which is attached as Exhibit 99.1 to this Form 8-K.

Additionally, the Company executed non-disclosure agreements (the “Non-Disclosure Agreements”) with certain holders of Second Lien Notes to facilitate discussions regarding a potential restructuring of the Company’s capital structure. The Company’s negotiations with the holders of Second Lien Notes (as well as the agent under the first lien credit facility) remain ongoing, but as of the date hereof, the parties have not reached agreement on the terms of a definitive transaction.

In connection with these negotiations, the Company provided the financial forecasts (collectively, the “projections”) and other information included in Exhibit 99.2 and the proposed, non-binding term sheet included in Exhibit 99.3 to this Current Report on Form 8-K to certain holders of Second Lien Notes and the agent under the first lien credit facility on March 25, 2019 and March 31, 2019, respectively, reflecting the non-binding indicative terms of a potential transaction as conveyed by the advisors to the agent under the first lien credit facility to the Company and the holders of Second Lien Notes, and such holders of Second Lien Notes provided the proposed, non-binding term sheet included in Exhibit 99.4 to this Current Report on Form 8-K to the Company and the agent under the first lien credit facility on March 31, 2019. The disclosure herein is being made in accordance with the terms of the Non-Disclosure Agreements. The projections and other information are included herein only because they were provided to, and received from, certain holders of Second Lien Notes as well as their advisors in connection with the negotiations. The projections were not prepared with a view toward public disclosure or compliance with the published guidelines of the Securities and Exchange Commission (“SEC”) or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present the Company’s financial condition in accordance with accounting principles generally accepted in the United States. The Company’s independent accountants have not examined, compiled or otherwise applied procedures to the projections and, accordingly, do not express an opinion or any other form of assurance with respect to the projections. The projections were prepared for internal use, capital budgeting and other management decisions and are subjective in many respects. The projections reflect numerous assumptions made by management of the Company with respect to financial condition, business and industry performance, general economic, market and financial conditions, and other matters, all of which are difficult to predict, and many of which are beyond the Company’s control. Accordingly, there can be no assurance that the assumptions made in preparing the projections will prove accurate. It is expected that there will be differences between actual and projected results, and the differences may be material, including due to the occurrence of unforeseen events occurring subsequent to the preparation of the projections. The inclusion of the projections therein should not be regarded as an indication that the Company or its affiliates or representatives consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such. Neither the Company nor any of its affiliates or representatives has made or makes any representation to any person regarding the ultimate outcome of the Company’s potential restructuring, refinancing or recapitalization or ultimate performance of the Company or its affiliates compared to the projections, and none of them undertakes any obligation to publicly update the projections to reflect circumstances existing after the date when the projections were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the projections are shown to be in error.

In connection with these negotiations, the Company provided information with respect to the Company’s reserves to holders of Second Lien Notes. The SEC permits oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible ─ from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations ─ prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. SEC rules also permit the disclosure of “probable” and “Possible” reserves. The information provided to holders of Second Lien Notes includes proved reserves but does not include probable or possible reserves, and uses certain broader terms such as “Technical PUDs” (as defined below) that the SEC does not permit to be included in SEC filings. This broader classification does not constitute “reserves” as defined by the SEC. We define Technical PUDs as undeveloped locations that meet the technical criteria to be considered proved reserves, but have not been determined to meet SEC criteria. Our estimates of Technical PUDs have been prepared internally by our engineers and management without review by independent engineers and reflect numerous assumptions made by management. Actual locations drilled and quantities that may be ultimately recovered from our properties could differ substantially. In addition, we have made no commitment to drill all of the drilling locations which have been attributable to these quantities. Ultimate recoveries will be dependent upon numerous factors including actual encountered geological conditions, the impact of future oil and gas pricing, exploration and development costs, and future drilling decisions based upon our future evaluation of risk, returns and the

availability of capital and, in many areas, the outcome of negotiation of drilling arrangements with holders of adjacent or fractional interest leases. Estimates of resources potential and other figures may change significantly as development of our properties provides additional data. The inclusion of Technical PUDs, therefore, should not be regarded as an indication that the Company or its affiliates or representatives consider Technical PUDs to be a more reliable measure of “reserves” than as defined by the SEC and should not be relied upon as such.

The information in this Item 7.01 of this Current Report on Form 8-K, including the attached Exhibits 99.1, 99.2, 9.3 and 99.4 is being “furnished” pursuant 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 Company’s filings under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 8.01. Other Events.

Forward-Looking Statements

This Current Report on Form 8-K includes “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements express our current expectations, opinion, belief or forecasts of future events and performance. A statement identified by the use of forward looking words including “may,” “expects,” “projects,” “anticipates,” “plans,” “believes,” “estimate,” “will,” “should,” and certain of the other foregoing statements may be deemed forward-looking statements. Although Vanguard believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. These include risks described in Vanguard's Annual Report on Form 10-K and other filings with the SEC, available at the SEC's website at www.sec.gov. By issuing forward looking statements based on current expectations, opinions, views or beliefs, Vanguard has no obligation and, except as required by law, is not undertaking any obligation, to update or revise these statements or provide any other information relating to such statements.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are filed herewith:



Exhibit No.	Description
99.1	Press Release, dated April 1, 2019
99.2	Presentation to Second Lien Noteholders
99.3	Proposed term sheet, dated March 31, 2019
99.4	Proposed term sheet, dated March 31, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	VANGUARD NATURAL RESOURCES, INC.


Dated: April 1, 2019	By:	/s/ R. Scott Sloan
		Name:	R. Scott Sloan
		Title:	President and Chief Executive Officer

Exhibit 99.1

NEWS RELEASE

Vanguard Natural Resources, Inc. Files for Chapter 11 Protection

Houston - April 1, 2019 - (PR NEWSWIRE) - Vanguard Natural Resources, Inc. (OTC-QX: VNRR) (together with its wholly owned subsidiaries, collectively, “Vanguard” or the “Company”) today announced that the Company has voluntarily filed petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division (the “Court”).

The Company has obtained a committed $130 million debtor-in-possession financing facility (the “DIP Facility”), which contemplates $65.0 million in new money, up to $20.0 million of which will become immediately available upon Bankruptcy Court approval and $65.0 million of which will roll up obligations in respect of revolving loans under the Company’s existing credit agreement. The DIP Facility is underwritten by Citibank, N.A. Subject to Court approval, this DIP financing, combined with the Company’s cash from operations, is expected to provide sufficient liquidity during the chapter 11 cases to support its continuing business operations and minimize disruption.

Mr. R. Scott Sloan, President and CEO, commented, “The restructuring steps that we have announced today are necessary to attain a capital structure which is suitable for Vanguard’s assets and future business strategy. We are now focused on expediting an efficient in-court restructuring, maintaining our operational momentum and upholding our obligations to our employees and vital vendors and stakeholders.”

Vanguard has filed a series of motions with the court that, when granted, are expected to generally enable the company to maintain its operations as usual throughout the restructuring process. Included in these first day motions are requests to continue to pay employee wages, honor existing employee benefit programs, continue to pay taxes, and pay royalties to mineral owners under the terms of the applicable agreements.

The Company has also filed motions seeking authority to pay expenses associated with its operations and drilling and completion activities, as well as costs associated with gathering, processing, transportation, marketing and those related to joint interest billing for non-operated properties.

Court filings and other information related to the chapter 11 cases are available on the Company’s website at www.vnrenergy.com/restructuring and at https://cases.primeclerk.com/VNR, which is a

website administered by the Company’s proposed claims agent, Prime Clerk LLC. The Company has also set up a toll-free hotline to answer employee, vendor, investor and royalty owner questions, which is available Monday through Friday, 8 a.m. to 6 p.m. Central Standard Time at 844-216-9850 (internationally at 347-859-8076). Parties may obtain electronic notification of court filings through the Prime Clerk website or may register for email notices by completing the Bankruptcy Court’s registration form that can be accessed at http://www.txs.uscourts.gov/sites/txs/files/CRECFform.pdf.

Kirkland & Ellis LLP is serving as legal counsel and Evercore Partners is acting as financial advisor to Vanguard. Opportune LLP is the Company’s restructuring advisor.

About Vanguard Natural Resources, Inc.

Vanguard Natural Resources, Inc. is an independent exploration and production company focused on the production and development of oil and natural gas properties in the United States. Vanguard's assets consist primarily of producing and non-producing oil and natural gas reserves located in the Green River Basin in Wyoming, the Piceance Basin in Colorado, the Permian Basin in West Texas and New Mexico, the Arkoma Basin in Oklahoma, the Gulf Coast Basin in Texas, Louisiana and Alabama, the Big Horn Basin in Wyoming and Montana, the Anadarko Basin in Oklahoma and North Texas, the Wind River Basin in Wyoming and the Powder River Basin in Wyoming. More information on Vanguard can be found at www.vnrenergy.com.

Forward-Looking Statements

Statements made by representatives of the Company within this press release that are not historical facts are forward looking statements. Terminology such as “will,” “would,” “should,” “could,” “expect,” “anticipate,” “plan,” “project,” “intend,” “estimate,” “believe,” “target,” “continue,” “on track,” “potential,” the negative of such terms or other comparable terminology are intended to identify 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 financial performance and results, the ability to improve Vanguard’s results and profitability following its emergence from bankruptcy; our indebtedness under our revolving credit facility, term loan and second lien notes; availability of sufficient cash flow to make payments on our debt obligations and to execute our business plan; our prices and demand for oil, natural gas and natural gas liquids; and our ability to replace reserves and efficiently develop our reserves. These and other important factors could cause actual results to differ materially from those anticipated or implied in the forward looking statements. Please read “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 undertakes no obligation to publicly update any forward looking statements, whether as a result of new information or future events.

SOURCE: Vanguard Natural Resources, Inc.

CONTACT: Vanguard Natural Resources, Inc.

Investor Relations

Ryan Midgett, Chief Financial Officer

[email protected]

DRAFT – CONFIDENTIAL VIDEO TUTORIALS PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION Check out EPG’s short videos about working with the Evercore template. How- to tutorials with step-by-step instructions on completing small tasks quickly. Copy and paste the below file path: I:\NY\_Public\New Evercore Template\Training materials\Evercore Self- Learning Videos.htm [Either insert client logo (height about 1”) above line if it is high resolution, or type client name.] Presentation to Second Lien Noteholders March 2019

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 R-106 R-106 R-235 Group 1: Note, this disclaimer page These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for Vanguard Natural Resources, Inc. (the “Company”) to G-151 G-151 G-133 For text, should follow the title page whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as B-212 B-212 B-33 wireframe, specifically contemplated. These materials are based on information provided by or on behalf of the Company and/or other potential R-183 R-235 R-0 borders, in presentations. G-205 G-133 G-134 colored transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent B-235 B-33 B-0 bullets: Please fill out the [blanks] investigation or verification of such information and has relied on such information being complete and accurate in all material respects. R-158 R-0 R-250 To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the G-198 G-134 G-202 in the text. B-197 B-0 B-0 management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed R-200 R-250 R-219 that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and G-222 G-202 G-230 judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable B-222 B-0 B-245 estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and R-191 R-193 R-245 Group 2: G-191 G-2 G-192 For fills and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These B-191 B-2 B-139 larger areas materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not R-217 R-100 R-201 of colors, intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or G-217 G-100 G-255 e.g., Word other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit B-217 B-100 B-201 table fill: and internal use of the Company. R-0 R-255 Accent G-105 G-235 B-170 B-151 colors/ These materials were compiled on a confidential basis for use of the Company in evaluating the potential transaction described herein contrasting R-236 colors: G-163 and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, B-33 disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. R-193 R-138 Light gray for default Word G-2 G-173 B-2 B-70 table fill, callout boxes and annotated boxes: These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or R-0 R-255 any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore G-134 G-219 R-234 B-0 assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other B-67 G-234 R-235 B-234 R-221 G-133 professionals in other business areas of Evercore and its affiliates. G-70 B-33 B-55 Word tables: R-170 3pt border, Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters G-54 R-191 R-38,G-77,B-130 B-206 G-191 were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding B-191 R-250 tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its G-202 R-209 particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. B-0 G-226 B-255 Primary Secondary R-240 colored font: colored font: G-181 B-74 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: Executive Summary R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212  Vanguard Natural Resources, Inc. (“Vanguard” or the “Company”) is currently engaged in active dialogue with R-106 R-106 R-235 Group 1: its key constituents on a comprehensive balance sheet restructuring that leaves the Company with flexibility G-151 G-151 G-133 For text, and liquidity to operate on its business plan B-212 B-212 B-33 wireframe, R-183 R-235 R-0 borders, G-205 G-133 G-134 colored  B-235 B-33 B-0 bullets: A Chapter 11 filing may occur as early as the end of March and the Company is working towards an RSA R-158 R-0 R-250 G-198 G-134 G-202 with the RBL and FILO lenders prior to the filing B-197 B-0 B-0 R-200 R-250 R-219 G-222 G-202 G-230 ● Based on the current 13 week cash flow forecast, the Company may only have a window to meet pre- B-222 B-0 B-245 filing liquidity needs at the end of next week R-191 R-193 R-245 Group 2: G-191 G-2 G-192 For fills and B-191 B-2 B-139 larger areas  R-217 R-100 R-201 of colors, Based on current discussions, a significant equitization of the RBL, FILO Term Loan, and 2L Notes is G-217 G-100 G-255 e.g., Word expected B-217 B-100 B-201 table fill: R-0 R-255 Accent G-105 G-235 B-170 B-151  The Company has been in negotiations with the Steering Committee of RBL Lenders (“SteerCo”) regarding colors/ contrasting R-236 recovery to the 2L Notes G-163 colors: B-33 R-193 R-138 Light gray for default Word  G-2 G-173 On 3/21/19, the SteerCo provided the Company a counterproposal providing 2L Notes warrants with terms B-2 B-70 table fill, callout boxes and annotated boxes: TBD R-0 R-255 G-134 G-219 R-234 B-0 B-67 G-234 R-235 B-234 R-221 ● The Company hopes to have specificity on the warrant proposal from the SteerCo in short order G-133 G-70 B-33 B-55 Word tables: R-170 3pt border,  G-54 R-191 R-38,G-77,B-130 The Company is also seeking to raise a $65 million DIP-to-Exit Facility B-206 G-191 B-191 R-250 G-202 R-209  The Company would like to engage with the 2L Noteholders on the terms of a consensual plan which would B-0 G-226 B-255 Primary Secondary provide some recovery to the 2L Noteholders colored font: colored font: R-240 G-181 B-74 1 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: Near-Term Timeline ($ in millions) R-38 R-38 R-106 G-77 G-77 G-151 The Company has ~$6.3mm of pre-filing liquidity needs, which creates limited windows for when the B-130 B-130 B-212 R-106 R-106 R-235 Group 1: Company would be able to commence Chapter 11 proceedings in the event it chooses to do so G-151 G-151 G-133 For text, B-212 B-212 B-33 wireframe, 4/19/19: RBL & Term Loan 4/26/19: Newfield R-183 R-235 R-0 borders, Interest Payment ($11mm & Cash Call Refund G-205 G-133 G-134 $3mm, respectively) colored B-235 B-33 B-0 bullets: 4/1/19: Last date for 10-K Filing, including R-158 R-0 R-250 Going Concern and Compliance G-198 G-134 G-202 $15 Certificate on 4Q18 Covenants B-197 B-0 B-0 R-200 R-250 R-219 $10 G-222 G-202 G-230 $9 $9 $10 4/5/19: ~$6mm Surety B-222 B-0 B-245 $7 Bond collateral Group 2: payment $6 $6 R-191 R-193 R-245 Minimum Liquidity: $5 G-191 G-2 G-192 For fills and B-191 B-2 B-139 $5 $3 larger areas R-217 R-100 R-201 of colors, $3 $0 G-217 G-100 G-255 e.g., Word ($1) $3 $3 B-217 B-100 B-201 $ - ($1) table fill: $1 ($3) $0 ($0) R-0 R-255 Accent G-105 G-235 B-170 B-151 ($5) ($3) colors/ ($8) contrasting R-236 ($6) colors: G-163 ($7) ($7) B-33 ($10) ($9) R-193 R-138 Light gray for default Word G-2 G-173 table fill, callout boxes and ($17) B-2 B-70 ($15) annotated boxes: ($14) R-0 R-255 G-134 G-219 R-234 B-0 B-67 G-234 R-235 B-234 ($20) R-221 G-133 G-70 B-33 B-55 Word tables: 3pt border, ($25) R-170 ($24) G-54 R-191 R-38,G-77,B-130 B-206 G-191 B-191 R-250 ($30) G-202 R-209 3/22/19 3/29/19 4/5/19 4/12/19 4/19/19 4/26/19 5/3/19 5/10/19 5/17/19 5/24/19 5/31/19 6/7/19 6/14/19 B-0 G-226 B-255 Primary Secondary Ending Cash Ending Cash (Filing that Week) Minimum Liquidity Month-End Revenue Receipts colored font: colored font: Source: 13-Week Cash Flow as of 3/19/19 R-240 G-181 B-74 2 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: 3/21/19 SteerCo Counterproposal – Restructuring Term Sheet R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 Group 1: Note, the default light gray  Restructuring to be implemented via a Chapter 11 bankruptcy case, or out-of-court if global consensus can be reached R-106 R-106 R-235 Implementation G-151 G-151 G-133 For text, fill (R234-G234-B234) is B-212 B-212 B-33 wireframe, used in tables without  DIP financing with interest rate of L+550 in an amount of $130mm R-183 R-235 R-0 borders, graphics. All column/row  G-205 G-133 G-134 colored $65mm commitment and $65mm roll-up of prepetition RBL balance B-235 B-33 B-0 bullets:  titles are center aligned. DIP Financing Funded amounts roll into Exit RBL at emergence R-158 R-0 R-250 G-198 G-134 G-202  Exit RBL with commitment of $65mm, interest rate of L+[300] and a 3-year tenor To edit the Word table: B-197 B-0 B-0  $65mm roll-up amount converts into Exit Term Loan A right click, Document R-200 R-250 R-219 G-222 G-202 G-230 Object, Open; make your  Hedges to be crystalized as of petition date and to be converted into: B-222 B-0 B-245 Group 2:  $20mm of the Exit Term Loan B with interest rate of L+[750] and a 3.5-year tenor R-191 R-193 R-245 edits in Word then close Hedges G-191 G-2 G-192 For fills and  100% of the reorganized common equity, subject to dilution from warrants and a management incentive plan B-191 B-2 B-139 larger areas the Word document.  (“MIP”), to be split [ ] between RBL, Hedges, and FILO Term Loan of colors, R-217 R-100 R-201 G-217 G-100 G-255 e.g., Word  RBL to be converted into the following: B-217 B-100 B-201 table fill:  $65mm of Exit Term Loan A with interest rate of L+[400] and a 3-year tenor R-0 R-255 Accent G-105 G-235 RBL  B-170 B-151 $290mm of Exit Term Loan B with interest rate of L+[750] and a 3.5-year tenor colors/  100% of the reorganized common equity, subject to dilution from warrants and a management incentive plan contrasting R-236  G-163 (“MIP”), to be split [ ] between RBL, Hedges, and FILO Term Loan colors: B-33  100% of the reorganized common equity, subject to dilution from warrants and the MIP, to be split [] between RBL, R-193 R-138 Light gray for default Word FILO Term Loan G-2 G-173 Hedges, and FILO Term Loan B-2 B-70 table fill, callout boxes and annotated boxes: R-0 R-255     [ ]-year new warrants for [ ]% of reorganized common equity, struck at [ ], subject to dilution from the MIP G-134 G-219 R-234 2L Notes B-0 B-67 G-234 R-235 B-234 R-221  G-133 Treatment TBD, subject to further diligence to evaluate whether claims will ride through or will be impaired G-70 Trade Creditors B-33 B-55 Word tables: R-170 3pt border,  []-year new warrants for []% of reorganized common equity, struck at [], subject to dilution from the MIP G-54 R-191 R-38,G-77,B-130 Common Equity B-206 G-191 B-191 R-250  MIP Management incentive plan (“MIP”) on terms TBD G-202 R-209 B-0 G-226 B-255 Primary Secondary colored font: colored font: Note: Company and its advisors are still analyzing class identification R-240 G-181 B-74 3 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: 3/21/19 SteerCo Counterproposal – Exit RBL & Exit Term Loans Term Sheet R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 Note, the default light gray R-106 R-106 R-235 Group 1: G-151 G-151 G-133 For text, fill (R234-G234-B234) is B-212 B-212 B-33 wireframe, Exit RBL Proposal Exit Term Loan A Proposal Exit Term Loan B Proposal used in tables without R-183 R-235 R-0 borders, G-205 G-133 G-134 colored graphics. All column/row Borrower /  Vanguard Natural Gas, LLC / Vanguard Natural Resources, Inc. and substantially all subsidiaries B-235 B-33 B-0 bullets: Guarantor titles are center aligned. R-158 R-0 R-250 G-198 G-134 G-202  $65mm borrowing capacity at  $65mm outstanding at emergence  $310mm outstanding at emergence Amount B-197 B-0 B-0 To edit the Word table: emergence R-200 R-250 R-219 right click, Document G-222 G-202 G-230  st  st  nd Object, Open; make your 1 lien on substantially all assets of 1 lien on substantially all assets of 2 lien on substantially all assets of B-222 B-0 B-245 Vanguard Vanguard Vanguard Group 2: Security / Priority    R-191 R-193 R-245 edits in Word then close Pari in priority with Exit Term Loan A Pari in priority with Exit RBL Junior in priority to both Exit RBL and G-191 G-2 G-192 For fills and the Word document.  Senior in priority to Exit Term Loan B  Senior in priority to Exit Term Loan B Exit Term Loan A B-191 B-2 B-139 larger areas R-217 R-100 R-201 of colors, Tenor  3 years from emergence  3 years from emergence  3.5 years from emergence G-217 G-100 G-255 e.g., Word B-217 B-100 B-201 table fill: Hedges  TBD  TBD  TBD R-0 R-255 Accent G-105 G-235 B-170 B-151  L+[300] on drawn amounts  L+[400]  L+[750] colors/     contrasting R-236 Rate [ ]bps commitment fee on undrawn TBD amortization TBD amortization G-163 amounts colors: B-33    R-193 R-138 Light gray for default Word Financial TBD TBD TBD G-2 G-173 Covenants B-2 B-70 table fill, callout boxes and annotated boxes: R-0 R-255  Incremental liquidity and general  Takeback debt for prepetition RBL  Takeback debt for prepetition RBL G-134 Use of Proceeds G-219 R-234 corporate purposes and hedge claims and hedge claims B-0 B-67 G-234 R-235 B-234 R-221    G-133 Asset Sales: Borrowing base to be Excess Cash Flow (“ECF”) sweep of ECF on same terms as Exit Term G-70 B-33 reduced by an amount equal to [50]% 100% cash on hand in excess of Loan A if both Exit RBL is undrawn B-55 Word tables: R-170 3pt border, of net proceeds from asset sales $[15]mm on a monthly basis; Exit and Exit Term Loan A is fully repaid; R-191 Other  G-54 R-38,G-77,B-130 Anti-cash hoarding threshold of RBL must be undrawn; Cash Cash threshold increases to $[25]mm B-206 G-191 $[15]mm threshold increases to $[25]mm if if borrowing base is $[0] B-191 borrowing base is $[0] R-250 G-202 R-209 B-0 G-226 B-255 Primary Secondary R-240 colored font: colored font: G-181 B-74 4 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: Illustrative Sources & Uses and Pro Forma Capitalization ($ in millions) R-38 R-38 R-106 G-77 G-77 G-151 3/21/19 SteerCo counterproposal B-130 B-130 B-212 R-106 R-106 R-235 Group 1: Sources Uses G-151 G-151 G-133 For text, B-212 B-212 B-33 wireframe, New Exit RBL $ - DIP Facility into Exit RBL $ - R-183 R-235 R-0 borders, New Exit Term Loan A 65 DIP Roll-Up into Exit Term Loan A 65 G-205 G-133 G-134 colored New Exit Term Loan B 310 Takeback Exit Term Loan B for RBL 290 B-235 B-33 B-0 bullets: Takeback Exit Term Loan B for Hedge Claims 20 R-158 R-0 R-250 G-198 G-134 G-202 RBL Equitized Claim 338 Equitize RBL 338 B-197 B-0 B-0 Hedge Equitized Claim 15 Equitize Hedge Claim 15 FILO Term Loan Equitized Claim 127 Equitize FILO Term Loan 127 R-200 R-250 R-219 G-222 G-202 G-230 2L Notes Equitized Claim 82 Equitize 2L Notes 82 B-222 B-0 B-245 Total Sources $936 Total Uses $936 R-191 R-193 R-245 Group 2: G-191 G-2 G-192 For fills and Pro Forma Capitalization B-191 B-2 B-139 larger areas 4 R-217 R-100 R-201 of colors, Pre Pro Debt / 2019E Adj. EBITDA Debt / PV-10 G-217 G-100 G-255 e.g., Word Emergence Adjustments Forma Pre Pro Forma Pre Pro Forma B-217 B-100 B-201 table fill: Cash1 $4 $ - $4 R-0 R-255 Accent G-105 G-235 DIP Facility $ - $ - $ - Any amounts outstanding on DIP facility pre- B-170 B-151 New Exit RBL - - - emergence to roll into New Exit RBL colors/ DIP Roll-Up 65 (65) - contrasting R-236 G-163 New Exit Term Loan A - 65 65 colors: B-33 New Exit Term Loan B - 310 310 R-193 R-138 Light gray for default Word RBL 693 (693) - G-2 G-173 FILO Term Loan 127 (127) - B-2 B-70 table fill, callout boxes and Total 1L Debt $884 $375 6.2x 2.6x 78.5% 33.3% annotated boxes: R-0 R-255 2L Notes $82 ($82) $ - G-134 G-219 R-234 B-0 Total Debt $966 $375 6.8x 2.6x 85.8% 33.3% B-67 G-234 R-235 B-234 Net Debt 962 371 6.8x 2.6x 85.4% 32.9% R-221 G-133 G-70 B-33 Memo Equity Splits B-55 Word tables: 2019E Adjusted EBITDA2 $142 RBL, FILO Term Loan, and Hedge Claims 100.0% R-170 3pt border, R-191 2020E Adjusted EBITDA3 129 G-54 R-38,G-77,B-130 G-191 4 B-206 PV-10 1,126 B-191 R-250 Note: RBL, FILO Term Loan, and 2L Notes pre-emergence amounts include prepetition accrued interest of $11mm, $3mm, and $1mm, respectively assuming a 3/31/19 filing date G-202 R-209 1. Cash as of 10/31/19 illustrative emergence date per DIP budget as of 3/21/19 B-0 G-226 2. Based on Management business plan (with strip as of 3/19/19) 2019E EBITDA of $142mm, which excludes hedge impact post-petition (beginning 4/1/19 and thereafter) 3. Based on Management business plan (with strip as of 3/19/19) 2020E EBITDA of $129mm, which excludes hedge impact for full year B-255 Primary Secondary 4. Reserves data based on Company reserves report as of 1/1/19, assuming SEC pricing ($65.56/Bbl for oil and $3.10/Mcf for gas) and adjusting for the completed sale of the Jonah Field assets; PV-10 based on Proved colored font: colored font: Developed Producing and Proved Developed Non-Producing reserves R-240 G-181 B-74 5 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: Business Plan Operating Summary ($ in millions) R-38 R-38 R-106 G-77 G-77 G-151 Management business plan ran under strip price deck forecasts B-130 B-130 B-212 R-106 R-106 R-235 Group 1: G-151 G-151 G-133 For text, Key Assumptions Production (Mmcfe/d) B-212 B-212 B-33 wireframe,  R-183 R-235 R-0 borders, Management’s existing business plan, which 350 G-205 G-133 G-134 colored 290 288 B-235 B-33 B-0 bullets: contemplates ramp up of capital expenditures for drilling 300 272 277 276 R-158 R-0 R-250 beginning 2021 47 39 41 39 G-198 G-134 G-202 250 43 B-197 B-0 B-0  Strip pricing as of 3/19/19 200 R-200 R-250 R-219 G-222 G-202 G-230 150 202 B-222 B-0 B-245 199 186 193 193 R-191 R-193 R-245 Group 2: 100 G-191 G-2 G-192 For fills and B-191 B-2 B-139 larger areas 50 R-217 R-100 R-201 of colors, 47 45 43 43 44 G-217 G-100 G-255 e.g., Word - B-217 B-100 B-201 FY2019 FY2020 FY2021 FY2022 FY2023 table fill: R-0 R-255 Oil (MMcfe/d) Gas (MMcfe/d) NGL (MMcfe/d) Accent G-105 G-235 B-170 B-151 Rolling LTM EBITDA Cumulative Unlevered Free Cash Flow colors/ contrasting R-236 $160 $250 G-163 colors: B-33 $142 $139 $140 $129 R-193 R-138 Light gray for default Word $120 $118 $200 $197 G-2 G-173 $120 B-2 B-70 table fill, callout boxes and annotated boxes: $100 $150 R-0 R-255 G-134 G-219 R-234 $80 B-0 B-67 G-234 R-235 B-234 $60 $100 R-221 G-133 G-70 B-33 $40 B-55 Word tables: $50 R-170 3pt border, $20 G-54 R-191 R-38,G-77,B-130 B-206 G-191 $ - $ - B-191 R-250 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 G-202 R-209 B-0 G-226 B-255 Primary Secondary colored font: colored font: Source: Company Model as of 3/21/19 R-240 G-181 B-74 6 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION To update section number manually, click in the text box, go to Numbering: Appendix

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: Vanguard Natural Resources Overview R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 R-106 R-106 R-235 Group 1: G-151 G-151 G-133 For text, B-212 B-212 B-33 Key Highlights Asset Map & Highlights wireframe, R-183 R-235 R-0 borders,  Diverse asset base in premier U.S. oil and gas basins G-205 G-133 G-134 colored B-235 B-33 B-0 bullets: Big Horn R-158 R-0 R-250 Powder River  Pinedale G-198 G-134 G-202 YE2018 proved reserves of ~1,765 Bcfe (73% gas, B-197 B-0 B-0 1,2 1,2 15% oil, 12% NGL) ; PV-9 of ~$1,372mm Wind River R-200 R-250 R-219 Piceance G-222 G-202 G-230 B-222 B-0 B-245  4Q18 net production of 323 MMcfed (33% liquids) San Juan R-191 R-193 R-245 Group 2: Anadarko Basin Arkoma-Woodford G-191 G-2 G-192 For fills and B-191 B-2 B-139 larger areas Alabama of colors, ● 2019 estimate of 290 MMcfed Permian R-217 R-100 R-201 G-217 G-100 G-255 e.g., Word B-217 B-100 B-201 Growth table fill:  2019E pro forma Adjusted EBITDA of ~$142mm3 R-0 R-255 Stable Accent G-105 G-235 4 B-170 B-151 (~$160mm excluding hedges) South Texas Greater East Haynesville colors/ Non-strategic contrasting R-236 colors: G-163  Capital expenditures of ~$38mm expected for full-year B-33 2019 Proved 4Q18 Net R-193 R-138 Light gray for default Word Reserves Production Proved PV-9 R/P G-2 G-173 Asset Areas (Bcfe)1,2 (MMcfed) ($mm)1,2 (years) B-2 B-70 table fill, callout boxes and annotated boxes:  R-0 R-255 Since August 2017, the Company has completed over Growth 1,211 182 $741 18 G-134 G-219 R-234 B-0 seventeen divestitures for $150mm in multiple basins, B-67 G-234 R-235 B-234 shifting focus to its core Arkoma-Woodford, Permian, and Stable 349 86 $427 11 R-221 G-133 G-70 Pinedale areas, in addition to its stable assets B-33 Word tables: Non-strategic & B-55 205 56 $204 10 3pt border, Divestment R-170 G-54 R-191 R-38,G-77,B-130 B-206 G-191 Total 1,765 324 $1,372 15 B-191 R-250 G-202 R-209 Note: PV values do not include COPAS B-0 G-226 1. Throughout the presentation, proved reserves and proved PV-9 have an effective date of 1/1/19, based on Company reserves report at SEC pricing except as noted therein 2. Reserves include Technical PUD 1, Technical PUD 2, maintenance and uplift reserve categories B-255 Primary Secondary 3. Based on Management business plan (with strip as of 3/19/19) 2019E EBITDA of $142mm, which excludes hedge impact post-petition (beginning 4/1/19 and thereafter) colored font: colored font: 4. Based on Management business plan (with strip as of 3/19/19) 2019E Open EBITDA of $160mm, which excludes hedge impact for full year R-240 G-181 B-74 8 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: 5 Strong Base of Proved Reserves (YE 2018 SEC Pricing) R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 Key Highlights Proved Reserves R-106 R-106 R-235 Group 1: G-151 G-151 G-133 For text,  1 Oil NGLs Gas Total PV-9 PV-10 Gas 1P PV-9 of $1,372mm B-212 B-212 B-33 wireframe, As of 1/1/19 (MMBbl) (MMBbl) (Bcf) (Bcfe) ($mm) ($mm) (%)  R-183 R-235 R-0 borders, In addition to Vanguard’s current G-205 G-133 G-134 colored base of proved reserves, the PDP2 33 29 679 1,052 $1,131 $1,079 65% B-235 B-33 B-0 bullets: Company holds significant PDN 2 1 12 32 50 47 37% R-158 R-0 R-250 3 8 5 372 448 161 139 83% G-198 G-134 G-202 incremental resource potential Technical PUD 1 B-197 B-0 B-0 Technical PUD 24 1 2 217 232 30 23 94% 1 R-200 R-250 R-219 Total Proved 44 37 1,280 1,765 $1,372 $1,288 73% G-222 G-202 G-230 PROB 4 17 211 340 52 43 62% B-222 B-0 B-245 POSS 2 15 182 285 43 35 64% R-191 R-193 R-245 Group 2: Total 3P 50 69 1,673 2,390 $1,468 $1,366 70% G-191 G-2 G-192 For fills and B-191 B-2 B-139 larger areas R-217 R-100 R-201 of colors, 4Q18E Proved Reserves Summary G-217 G-100 G-255 e.g., Word B-217 B-100 B-201 table fill: Proved Reserves Mix: 1,765 Bcfe1 PV-9 by Category: $1,372mm5 PV-9 Area: $1,372mm5 R-0 R-255 Accent G-105 G-235 TPUD 2 Non- B-170 B-151 Oil TPUD 1 2% Strategic & colors/ 15% 12% Divestment contrasting R-236 15% colors: G-163 PDNP B-33 4% R-193 R-138 Light gray for default Word G-2 G-173 NGL B-2 B-70 table fill, callout boxes and 12% annotated boxes: R-0 R-255 G-134 Growth G-219 R-234 B-0 54% B-67 G-234 R-235 B-234 Stable R-221 G-133 31% G-70 B-33 B-55 Word tables: Gas R-170 3pt border, 73% G-54 R-191 R-38,G-77,B-130 PDP B-206 G-191 82% B-191 R-250 Note: Reserves data based on Company reserves report as of 1/1/19, adjusting for the completed sale of the Jonah Field assets G-202 R-209 1. Includes maintenance and uplift reserve categories as well as Technical PUD 1 and Technical PUD 2 B-0 G-226 2. Includes maintenance and uplift reserve categories 3. Technical PUD 1 are locations scheduled to be developed within 5 years B-255 Primary Secondary 4. Technical PUD 2 are locations scheduled to be developed outside of the next 5 years colored font: colored font: 5. Assumes YE 2018 SEC pricing ($65.56/Bbl for oil and $3.10/Mcf for gas) R-240 G-181 B-74 9 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: Financial Projections ($ in millions) R-38 R-38 R-106 G-77 G-77 G-151 3/21 SteerCo counterproposal pro forma capitalization and strip pricing case under Management business B-130 B-130 B-212 R-106 R-106 R-235 Group 1: plan FY2019 FY2020 FY2021 FY2022 FY2023 G-151 G-151 G-133 For text, 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 B-212 B-212 B-33 wireframe, Oil (Bcfe) 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 R-183 R-235 R-0 borders, Gas (Bcfe) 19 18 18 17 17 16 17 18 17 17 18 18 18 17 17 18 18 19 19 18 G-205 G-133 G-134 colored NGL (Bcfe) 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 B-235 B-33 B-0 Total Equivalent Production (Bcfe) 27 27 26 25 24 24 25 26 25 25 25 26 25 25 25 26 26 27 27 26 bullets: Total Revenues 1 $82 $83 $85 $86 $85 $69 $73 $79 $79 $69 $72 $77 $77 $68 $71 $77 $80 $76 $79 $80 R-158 R-0 R-250 1 G-198 G-134 G-202 Adjusted EBITDA $26 $35 $39 $42 $40 $26 $29 $34 $35 $25 $28 $32 $33 $25 $28 $32 $36 $32 $35 $36 B-197 B-0 B-0 (-) Capital Expenditures (15) (8) (12) (3) (9) (15) (32) (22) (17) (19) (31) (25) (19) (18) (33) (38) (40) (38) (24) (12) (-) Change in Net Working Capital (7) (2) 0 (13) 6 10 10 (16) (6) 7 11 (9) (6) 3 13 3 0 0 (15) (13) R-200 R-250 R-219 Unlevered Free Cash Flow $5 $25 $27 $26 $37 $21 $8 ($4) $12 $13 $8 ($1) $8 $10 $8 ($2) ($4) ($6) ($5) $11 G-222 G-202 G-230 (-) Cash Interest & Fees (4) (1) (0) (9) (9) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (9) (9) B-222 B-0 B-245 (-) Mandatory Amortization - - - - - - - - - - - - - - - - - - - - Levered Free Cash Flow $1 $23 $27 $16 $28 $13 ($0) ($12) $4 $5 ($0) ($9) $0 $2 $0 ($10) ($12) ($14) ($13) $2 R-191 R-193 R-245 Group 2: (+) Other Cash Flows (27) (15) (21) (11) - - - - - - - - - - - - - - - - G-191 G-2 G-192 For fills and Cash Flow Available for Revolver ($26) $9 $6 $5 $28 $13 ($0) ($12) $4 $5 ($0) ($9) $0 $2 $0 ($10) ($12) ($14) ($13) $2 B-191 B-2 B-139 larger areas (+) Revolver & DIP Draw / (Paydown) - 20 - (20) - - - 5 (4) (0) - 4 (0) (2) (0) 10 12 14 13 (2) Change in Cash ($26) $29 $6 ($15) $28 $13 ($0) ($7) $ - $5 ($0) ($5) $ - $ - $ - $ - $ - $ - $ - $ - R-217 R-100 R-201 of colors, (+) Beginning Cash 31 1 30 36 15 15 14 7 - - 5 5 - - - - - - - - G-217 G-100 G-255 e.g., Word (-) Excess Cash Flow Sweep - - - (6) (28) (14) (6) - - - - - - - - - - - - - B-217 B-100 B-201 table fill: Ending Cash $1 $30 $36 $15 $15 $14 $7 $ - $ - $5 $5 $ - $ - $ - $ - $ - $ - $ - $ - $ - R-0 R-255 Total Liquidity Accent G-105 G-235 Ending Cash $1 $30 $36 $15 $15 $14 $7 $ - $ - $5 $5 $ - $ - $ - $ - $ - $ - $ - $ - $ - B-170 B-151 (+) Revolver & DIP Availability - 45 45 65 65 65 65 60 65 65 65 61 61 63 63 53 41 27 14 16 colors/ Total Liquidity $1 $75 $81 $80 $80 $79 $72 $60 $65 $70 $70 $61 $61 $63 $63 $53 $41 $27 $14 $16 contrasting R-236 G-163 Capitalization colors: B-33 RBL / Exit RBL2 $682 $682 $682 $ - $ - $ - $ - $5 $0 $ - $ - $4 $4 $2 $2 $12 $24 $38 $51 $49 DIP Facility - 20 20 - - - - - - - - - - - - - - - - - R-193 R-138 Light gray for default Word New Exit Term Loan A - - - 59 30 16 10 10 10 10 10 10 10 10 10 10 10 10 10 10 G-2 G-173 New Exit Term Loan B - - - 310 310 310 310 310 310 310 310 310 310 310 310 310 310 310 310 310 B-2 B-70 table fill, callout boxes and FILO Term Loan due 2021 123 123 123 - - - - - - - - - - - - - - - - - annotated boxes: 2L Senior Secured Notes due 2024 81 81 81 - - - - - - - - - - - - - - - - - R-0 R-255 Total Debt $886 $906 $906 $369 $340 $326 $320 $324 $320 $320 $320 $324 $324 $322 $322 $332 $344 $358 $371 $369 G-134 G-219 R-234 Total Net Debt 885 876 870 354 325 313 313 324 320 315 315 324 324 322 322 332 344 358 371 369 B-0 B-67 G-234 R-235 B-234 Operating Metrics R-221 G-133 LTM Adjusted EBITDA $111 $116 $125 $142 $156 $147 $137 $129 $124 $123 $122 $120 $119 $118 $118 $118 $121 $128 $135 $139 G-70 B-33 LTM Capital Expenditures 98 68 55 38 32 39 59 77 85 90 89 92 94 93 94 107 128 148 140 114 B-55 Word tables: LTM Interest Expense 49 36 19 37 36 35 34 33 32 32 32 32 32 32 32 32 32 32 33 34 R-170 3pt border, Credit Metrics G-54 R-191 R-38,G-77,B-130 Net 1L Leverage 7.3x 6.9x 6.3x 2.5x 2.1x 2.1x 2.3x 2.5x 2.6x 2.6x 2.6x 2.7x 2.7x 2.7x 2.7x 2.8x 2.8x 2.8x 2.7x 2.7x B-206 G-191 Net Total Leverage 8.0x 7.6x 6.9x 2.5x 2.1x 2.1x 2.3x 2.5x 2.6x 2.6x 2.6x 2.7x 2.7x 2.7x 2.7x 2.8x 2.8x 2.8x 2.7x 2.7x B-191 Interest Coverage Ratio3 2.3x 3.2x 6.5x 3.9x 4.3x 4.2x 4.0x 3.9x 3.8x 3.9x 3.9x 3.8x 3.8x 3.7x 3.7x 3.7x 3.8x 3.9x 4.1x 4.1x R-250 G-202 R-209 Source: Company Model as of 3/21/19 B-0 G-226 Note: Rates and fees are for illustrative purposes only; Assumes forward LIBOR curve as of 3/19/19 and strip pricing as of 3/19/19; Maturities rolled past projection period for illustrative purposes 1. Excludes hedge impact post-petition (beginning 4/30/19 and thereafter) for projection period B-255 Primary Secondary 2. For illustrative and modelling purposes RBL and Exit RBL shown on same line; Terms of the Exit RBL are effective 10/31/19 colored font: colored font: 3. Adjusted EBITDA / Interest Expense; Interest Coverage Ratio adjusted to reflect annualized pro forma interest expense post-emergence from 4Q19 to 3Q20 R-240 G-181 B-74 10 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – CONFIDENTIAL PRELIMINARY & SUBJECT TO ONGOING REVIEW & MODIFICATION For basic Excel Highlight graphics, chart colors: diagrams: colors: YE 2018 SEC Reserve Table ($ in millions) R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 R-106 R-106 R-235 Group 1: G-151 G-151 G-133 For text, As of B-212 B-212 B-33 wireframe, 12/31/18 R-183 R-235 R-0 borders, G-205 G-133 G-134 colored Reserve Data B-235 B-33 B-0 bullets: R-158 R-0 R-250 Crude Oil (MMBbls) 34.7 G-198 G-134 G-202 Natural Gas (Bcf) 689.4 B-197 B-0 B-0 R-200 R-250 R-219 NGLs (MMBbls) 30.0 G-222 G-202 G-230 Total (Bcfe) 1,077.5 B-222 B-0 B-245 R-191 R-193 R-245 Group 2: G-191 G-2 G-192 For fills and Proved Developed (Bcfe) 1,077.5 B-191 B-2 B-139 larger areas Proved Undeveloped (Bcfe) - R-217 R-100 R-201 of colors, G-217 G-100 G-255 e.g., Word Proved Developed Reserves as % of Total Proved Reserves 100.0% B-217 B-100 B-201 table fill: 1 R-0 R-255 PV-10 $1,161.1 Accent G-105 G-235 B-170 B-151 (-) Future Income Taxes (Discounted at 10%) (95.4) colors/ 2 contrasting R-236 Standardized Measure $1,065.7 G-163 colors: B-33 3 Representative Oil & Natural Gas Prices R-193 R-138 Light gray for default Word G-2 G-173 Oil (WTI per Bbl) $65.66 B-2 B-70 table fill, callout boxes and annotated boxes: Natural Gas (Henry Hub per MMBtu) 3.10 R-0 R-255 G-134 G-219 R-234 NGLs (Volume-Weighted Average Price per Bbl) 26.73 B-0 B-67 G-234 R-235 B-234 R-221 G-133 G-70 B-33 B-55 Word tables: R-170 3pt border, 1. PV-10 is the present value of estimated future net revenues to be generated from the production of proved reserves, calculated net of estimated production costs and future development costs, using prices based on the G-54 R-191 R-38,G-77,B-130 12-month average price, and without giving effect to non-property related expenses such as selling, general and administrative expenses and debt service, future income tax expense or to depreciation, depletion, B-206 G-191 amortization, and accretion and discounted using an annual discount rate of 10%; PV-10 is not a measure of financial or operating performance under GAAP, nor should it be considered in isolation or as a substitute for the B-191 standardized measure of discounted future net cash flows R-250 2. Standardized Measure is the present value of estimated future net revenues to be generated from the production of proved reserves, determined in accordance with the rules and regulations of the SEC (using the 12-month G-202 R-209 average price) and calculated net of the estimated future costs incurred in developing, producing and abandoning the proved reserves. Future income taxes are calculated by applying the statutory federal and state income B-0 G-226 tax rate to pre-tax future net cash flows, net of the tax basis of the properties involved and utilization of available tax carryforwards related to oil and natural gas operations; Standardized Measure does not give effect to derivative transactions B-255 Primary Secondary 3. Oil and natural gas prices are based on spot prices per Bbl and MMBtu, respectively, calculated using the 12-month average price for January through December 2018, with these representative prices adjusted by field for colored font: colored font: quality, transportation fees and regional price differentials to arrive at the appropriate net price. NGLs prices were calculated using the differentials to the 12-month average price of oil per Bbl of $65.66 R-240 G-181 B-74 11 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – WORK IN PROGRESS VIDEO TUTORIALS SUBJECT TO CONFIDENTIALITY AGREEMENTS, FRE 408, AND STATE LAW EQUIVALENTS Check out EPG’s short videos about working with the Evercore template. How- to tutorials with step-by-step instructions on completing small tasks quickly. Copy and paste the below file path: I:\NY\_Public\New Evercore Template\Training materials\Evercore Self- Learning Videos.htm [Either insert client logo (height about 1”) above line if it is high resolution, or type client name.] Restructuring Proposal March 31, 2019 THIS TERM SHEET IS FOR DISCUSSION PURPOSES ONLY. THIS TERM SHEET DOES NOT PURPORT TO SUMMARIZE ALL OF THE TERMS, CONDITIONS, RESPRESENTATIONS, WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED HEREIN, WHICH TRANSACTIONS WILL BE SUBJECT TO THE COMPLETION OF DEFINITIVE DOCUMENTS INCORPORATING THE TERMS SET FORTH HERIN AND THE CLOSING OF ANY TRANSACTION SHALL BE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE DOCUMENTS. NO BINDING OBLIGATIONS WILL BE CREATED BY THIS TERM SHEET UNLESS AND UNTIL BINDING DEFINITIVE DOCUMENTS ARE EXECUTED AND DELIVERED BY ALL APPLICABLE PARTIES.

DRAFT – WORK IN PROGRESS SUBJECT TO CONFIDENTIALITY AGREEMENTS, FRE 408, AND STATE LAW EQUIVALENTS For basic Excel Highlight graphics, chart colors: diagrams: colors: R-38 R-38 R-106 G-77 G-77 G-151 B-130 B-130 B-212 R-106 R-106 R-235 Group 1: Note, this disclaimer page These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for Vanguard Natural Resources, Inc. (the “Company”) to G-151 G-151 G-133 For text, should follow the title page whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as B-212 B-212 B-33 wireframe, specifically contemplated. These materials are based on information provided by or on behalf of the Company and/or other potential R-183 R-235 R-0 borders, in presentations. G-205 G-133 G-134 colored transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent B-235 B-33 B-0 bullets: Please fill out the [blanks] investigation or verification of such information and has relied on such information being complete and accurate in all material respects. R-158 R-0 R-250 To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the G-198 G-134 G-202 in the text. B-197 B-0 B-0 management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed R-200 R-250 R-219 that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and G-222 G-202 G-230 judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable B-222 B-0 B-245 estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and R-191 R-193 R-245 Group 2: G-191 G-2 G-192 For fills and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These B-191 B-2 B-139 larger areas materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not R-217 R-100 R-201 of colors, intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or G-217 G-100 G-255 e.g., Word other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit B-217 B-100 B-201 table fill: and internal use of the Company. R-0 R-255 Accent G-105 G-235 B-170 B-151 colors/ These materials were compiled on a confidential basis for use of the Company in evaluating the potential transaction described herein contrasting R-236 colors: G-163 and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, B-33 disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. R-193 R-138 Light gray for default Word G-2 G-173 B-2 B-70 table fill, callout boxes and annotated boxes: These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or R-0 R-255 any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore G-134 G-219 R-234 B-0 assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other B-67 G-234 R-235 B-234 R-221 G-133 professionals in other business areas of Evercore and its affiliates. G-70 B-33 B-55 Word tables: R-170 3pt border, Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters G-54 R-191 R-38,G-77,B-130 B-206 G-191 were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding B-191 R-250 tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its G-202 R-209 particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. B-0 G-226 B-255 Primary Secondary R-240 colored font: colored font: G-181 B-74 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

DRAFT – WORK IN PROGRESS SUBJECT TO CONFIDENTIALITY AGREEMENTS, FRE 408, AND STATE LAW EQUIVALENTS For basic Excel Highlight graphics, chart colors: diagrams: colors: Treatment of Claims R-38 R-38 R-106 G-77 G-77 G-151 Treatment of Claims B-130 B-130 B-212 Group 1: 1 R-106 R-106 R-235 Claim Debt Preferred Equity Common Equity Governance / Other G-151 G-151 G-133 For text, B-212 B-212 B-33  $65mm2  $65mm consisting of:  None  None  None wireframe,  $65mm Exit RBL R-183 R-235 R-0 borders, New Money DIP  Rate: L+[300-400] G-205 G-133 G-134 colored  Tenor: [3] years B-235 B-33 B-0 bullets:  Covenants: [TBD] R-158 R-0 R-250 G-198 G-134 G-202  3     $687mm $330mm consisting of: 93% of Preferred Equity Class A 93% of reorganized [7] board members B-197 B-0 B-0  $65mm Exit Term Loan A  Amount: $[357]mm common equity nominated by holders of  Rate: L+[400]  Tenor: [Perpetual] Preferred Equity Class A R-200 R-250 R-219   G-222 G-202 G-230 Tenor: [3] years Non-Cash Dividend Rate: B-222 B-0 B-245 RBL  Covenants: [TBD] [L+850 (stepping to L+950  $265mm4 Exit Term Loan B after 6 months)] R-191 R-193 R-245 Group 2:  Rate: L+[750] G-191 G-2 G-192 For fills and  Tenor: [3.5] years B-191 B-2 B-139 larger areas  Covenants: [TBD] R-217 R-100 R-201 of colors,      G-217 G-100 G-255 e.g., Word $47mm $20mm consisting of: 7% of Preferred Equity Class A 7% of reorganized [7] board members B-217 B-100 B-201  $20mm4 Exit Term Loan B  Amount: $[27]mm common equity nominated by holders of table fill:  Rate: L+[750]  Tenor: [Perpetual] Preferred Equity Class A R-0 R-255 Hedges  Tenor: [3.5] years  Non-Cash Dividend Rate: Accent G-105 G-235 B-170 B-151  Covenants: [TBD] [L+850 (stepping to L+950 colors/ after 6 months)] contrasting R-236 G-163      5 colors: $126mm None 100% of Preferred Equity Class B TBD Adequate Protection : B-33  Amount: $[126]mm Includes fees & expenses  Tenor: [Perpetual] subject to a cap but does R-193 R-138 Light gray for default Word FILO Term Loan  G-2 G-173 Non-Cash Dividend Rate: not include any success B-2 B-70 table fill, callout boxes and [L+1,050 (stepping to L+1,150 fees annotated boxes: after 6 months] R-0 R-255 G-134 G-219 R-234  $82mm  None  100% of Preferred Equity Class C  TBD  Adequate Protection5: B-0 B-67 G-234  R-235 B-234 Amount: $[82]mm Includes fees & expenses R-221  G-133 Tenor: [Perpetual] subject to a cap but does G-70 2L Notes  B-33 Non-Cash Dividend Rate: not include any success B-55 Word tables: [L+1,250 (stepping to L+1,350 fees R-170 3pt border, after 6 months)] G-54 R-191 R-38,G-77,B-130 B-206 G-191  NA  None  None  None  None B-191 Common Equity R-250 G-202 R-209 1. Claims include par + accrued + amortization as of an illustrative 3/31/19 filing date B-0 G-226 2. Represents full commitment amount of $65mm B-255 3. Reflects sale of Jonah assets Primary Secondary 4. Pro rata split of Exit Term Loan B based on RBL claim of $687mm less $65mm DIP Roll-Up and Hedge claim of $47mm R-240 colored font: colored font: 5. Adequate protection provided for in Interim DIP Order for fees and expenses incurred in connection with negotiating in good faith on a consensual deal G-181 B-74 1 R-38 R-0 R-189 G-77 G-105 G-209 B-130 B-170 B-143

- Subject to FRE 408 and Local Law Equivalents - - Prepared at the Request of Counsel - - For Discussion Purposes Only - Overview of Second Lien Proposal March 31, 2019

- Subject to FRE 408 and Local Law Equivalents - - Prepared at the Request of Counsel - - For Discussion Purposes Only - Important Information These materials were prepared by Miller Buckfire & Co., LLC & Stifel Financial (collectively, the “Firm”) on March 31, 2019 for confidential use only and may not be used or relied upon or further distributed for any purpose except as agreed in writing by the Firm. These materials are based on publically available information. The Firm assumes no responsibility to investigate or verify such information and has relied on the completeness and accuracy of such information. To the extent such information includes estimates and forecasts of future financial performance or other future developments, the Firm has assumed that such estimates and forecasts are reasonable. No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials are necessarily based upon information available to the Firm, including financial, bond market, legal, economic, policy and other conditions and circumstances existing and disclosed to the Firm as of the date hereof, all of which are subject to change. These materials speak as of the date of their preparation, except as otherwise noted. The Firm does not have any obligation to update, bring- down, review or reaffirm these materials. Under no circumstances should the delivery of these materials imply that any information or analyses included would be the same if made as of any other date. Any valuation, projection or other estimate contained herein is only an approximation, subject to uncertainties and contingencies, all of which are difficult to predict and beyond the control of the Firm, and thus nothing herein is intended to be, and should not be construed in any respect as, a statement or guaranty of value. These materials must be considered in their totality. The Firm is not acting in any capacity as a fiduciary of any party. These materials are not intended to provide a basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials are not an offer or solicitation to trade any securities and are not a commitment by anybody to provide or arrange any financing or trade in any related security. These materials may not reflect information known to other professionals of the Firm and its affiliates. The Firm and its affiliates provide no legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by the Firm or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. All persons should seek legal, accounting and tax advice based on their particular circumstances from independent advisors regarding the effect on them of anything described herein. The Firm or its personnel may make statements or provide advice thatiscontrarytotheinformationcontainedinthese materials. 1

- Subject to FRE 408 and Local Law Equivalents - - Prepared at the Request of Counsel - - For Discussion Purposes Only - Overview of Second Lien Proposal Key Issues 2L Proposal (3/31/2019) • RBL up to $65 million at [L + 300 – 400] • Exit Term Loan A of $65 million at L + 400 Debt Rate and Size • $285 million Exit Term Loan B at L + 750 • All debt is pre-payable at par • Preferred A: L+750 (declines by 50bps/yr) Preferred Equity PIK • Preferred B: L+850 (declines by 50bps/yr) Interest Rate • Preferred C: L+950 (declines by 50bps/yr) • Second Lien holders to receive warrants or CVRs for 5% of the reorganized common equity after Warrants / Common distributions have been made to all tranches of preferred equity Equity Distribution • Mutually agreed upon go-forward business plan re: maximization of free cash flow generation and use of proceeds from asset sales Business Plan • No dilution to preferred holders from management incentive plan • Mechanisms to ensure post-reorganized Company pursues business plan TBD • Second Lien board member selection or participation in selection process TBD Governance • Controlling equity ownership will remain stapled to Exit Term Loan A and Exit Term Loan B to ensure governance and business plan continuity • Second Lien ad hoc group will receive adequate protection in the form of professional fees and expenses Adequate Protection • Reasonable and documented legal fees, not to include any litigation or actions inconsistent with the negotiated transaction 2

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

Create E-mail Alert Related Categories

SEC Filings

Related Entities

Vanguard

Sign up for StreetInsider Free!

Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!

Form 8-K Vanguard Natural Resourc For: Apr 01

You May Also Be Interested In

Create E-mail Alert Related Categories

Related Entities

Sign up for StreetInsider Free!

Free News Feed