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October 26, 2010

AAII Philadelphia Chapter


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 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 gas, oil 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 the Company’s 10-K Annual Report for 2009, Registration Statements on Form S-1 and Form S-3 and the related prospectuses, Form 10-Q’s for 2009 and 2010 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 October 25, 2010.

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Comparable Company Distribution Yields CURRENT DISTRIBUTION YIELDS OF PEER GROUP 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%

5.8%

*Pipe

6.2%

*G&P

6.8%

7.2%

7.7%

7.8%

7.9%

8.3%

8.6%

$2.33

$2.00

$2.52

$2.08

$1.53

$3.02

$2.20

*USRT

PSE

LINE

LGCY

BBEP

EVEP

VNR

*Pipe – Average Yield of Large Pipeline Companies (BWP, EEP, EPB, EPD, ETP, OKS, SEP, TCLP, TPP) *G&P – Average Yield of Gathering & Processing Companies (APL, DPM, CPNO, EROC, HLND, KGS, MWE, NGLS, RGNC, WES, WPZ, XTEK) *USRT – Average Yield of U.S. Royalty Trusts (CRT, HGT, MTR, PBT, SBR and SJT) Yield calculated using the closing unit price on 10/25/10.

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Price Performance Since 2009 The results have been good. VNR has outperformed US Royalty Trusts, C-Corps and other E&P MLPs. The strategy works. 500%

VNR: 332% 400%

300%

E&P MLPs: 135% 200%

Alerian Index: 98%

S&P 500: 31% US Royalty Trust: 10%

100%

0% 01/01/09

05/12/09 US Royalty Trust

09/21/09 (1)

E&P MLPs

Note: Market data as of 10/21/2010. (1) US Royalty Trust Index includes: CRT, HGT, MTR, PBT, SBR and SJT. (2) E&P MLP Index includes: BBEP, CEP, EVEP, LGCY, LINE and VNR.

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01/30/10 (2)

S&P 500

06/11/10 Alerian Index

10/21/10 VNR


Unit Price History Since IPO Distribution Increases with Acquisition Growth

$0.425

5

$0.445

$0.50

$0.525

$0.55


Yield Compression Continues? Liquids T&S Natural Gas T&S Natural Gas G&P Propane Shipping Upstream

50%

2004 6.5% 6.8 6.8 8.3 6.8 NA

2005 6.2% 6.4 5.9 8.1 5.6 NA

2006 6.8% 6.7 6.2 8.2 5.8 6.6

Average Yield 2007 2008 6.1% 8.3% 6.1 7.8 5.5 12.1 7.5 9.8 5.6 12.2 6.2 12.4

2009 8.2% 8.1 12.4 9.3 15.3 12.5

YTD 6.8% 6.5 7.4 7.4 13.8 9.4

Current 6.3% 5.8 6.2 6.8 16.3 8.3

40%

30%

20% 16.3% 8.3% 6.8% 6.3% 6.2% 5.8%

10%

0% Dec-04

Liquids T&S

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Dec-05

Dec-06

Natural Gas T&S

Nov-07

Natural Gas G&P

Note: Market data as of 10/21/2010. Liquids T&S (BPL, GEL, GLP, HEP, KMP, NS, MMP, PAA, SXL, TLP, TPP) Natural Gas T&S (BWP, EEP, EPB, EPD, ETP, OKS, SEP, TCLP, WMZ) Natural Gas G&P (APL, DPM, CPNO, EROC, HLND, KGS, MWE, NGLS, RGNC, WES, WPZ, XTEX) Propane (APU, FGP, NRGY, SPH) Shipping (CPLP, KSP, NMM, OSP, TGP, TOO) Upstream (BBEP, ENP, EVEP, LGCY, LINE, PSE, VNR)

Nov-08

Propane

Nov-09

Shipping

Oct-10

Upstream


Acquisitions Drive Growth Reserves (Bcfe) *

12/31/2007

12/31/2007

12/31/2008

12/31/2008

12/31/2009

* Based on Internal Engineer Reserve Report as of 6/30/10

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12/31/2009

6/30/2010*


VNR-Acquisitions Fuel Distribution Growth -1%

+2%

+14%

+5%

+18%

$2.08

Yield Growth Note: As of 10/6/2010. Source: IHS Herold. Peer group includes: ENP, EVEP, LGCY, LINE and PSE. (1) Annual distribution growth reflects the % increase / (decrease) in announced quarterly distribution over the year. (2) Weighted average of peer distribution growth.

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Profitable Growth Through Accretive Acquisitions $2.18**

$2.00 $1.82 $1.70*

12/31/2007

12/31/2008

12/31/2009

*Annualized quarterly distributions **Based on current distribution rate of .55 and Q1 2010 distribution of .525

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12/31/2010(E)


Overview of Vanguard Natural Resources Upstream Energy LLC, headquartered in Houston Initial Public Offering – “VNR” - October 2007 Five strategic acquisitions totaling ~350MM expanded geographic profile and commodity diversity Increased distributions 29% since IPO

Diverse portfolio of mature, long life gas and oil properties, combined with multi-year hedging program provide stable cash flow and support distributions 173 Bcfe total proved reserves, 66% proved developed,16 yr R/P * 49% gas / 39% oil / 12% NGLs Approximately 82% of expected natural gas production hedged through 2011 at floor price of $7.81 per MMbtu Approximately 48% of expected oil production hedged through 2013 at floor price of $87.69 per barrel * Based on Internal Engineer Reserve Report as of 6/30/10

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Company Profile Company Profile EQUITY MARKET CAP (1) TOTAL DEBT LESS CASH ENTERPRISE VALUE (1)

$690 million 54 million 3 million $741 million

Market pricing as of October 25, 2010; includes 420m Class B units

Positive Cash Distribution Coverage Annualized distribution of $2.20 yields approximately 8.6% at current price Expect approximately 1.25x to 1.30x coverage for 2010 Diverse asset base in mature basins Appalachian Basin – SE Kentucky and NE Tennessee South Texas – Webb and LaSalle County Permian Basin – W Texas, SE New Mexico Mississippi – Jones County and Jasper County 11


Advantages of Vanguard’s LLC Structure LLC Partnership structure results in lower cost of capital No entity level income tax is competitive advantage in A&D market

No Incentive Distribution Rights (IDRs) Investors share equally in all cash flows – no management or general partner “double-dipping”

Tax Shield – minimum 60% of distributions through 2012 expected to be tax deferred Unit holders benefit from favorable tax treatment compared to alternative yield products while having upside exposure through unit price appreciation

Fair governance – all unit holders vote (no general partner) Vanguard’s management aligned with public unit holders – significant portion of compensation from unit ownership 12


Multiple Operating Areas Appalachia

Permian Basin

 Proved Reserves: 50.4 Bcfe(1)  93% Gas, 67% PDP  9.9 MMcfe/d current net production

 Proved Reserves: 7.1 MMboe (1)  84% oil and 67% PDP  1.3 Mboe/d current net production

South Texas -Dos Hermanos and Sun TSH Fields  Proved Reserves: 52.7 Bcfe (1)

 98% gas+ngl; 61% PDP  8.1 MMcfe/d current net production

(1) Internal engineer reserve estimates as of 6/30/10

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Parker Creek  Proved Reserves: 4.7 MMboe (1)  96% oil and 61% PDP  850 Boe/d current net production


2009 - Growth in South Texas Acquisition from Lewis Energy, closed August 2009 for $52.3 million, cash funded with proceeds of equity offering Lewis to operate and conduct PUD drilling program through 2015 (7 wells per year) “Drop-down” opportunities possible as Lewis monetizes mature assets to focus on Eagle Ford Shale development Largest operator in the Olmos trend ~1,100 operated producing wells ~ 100,000 Mcfe/d of net production

Swaps/Collars on 90% of PDP through 2011, floor pricing of Nymex $7.52/MMbtu ACQUISITION SUMMARY - SUN TSH Proved Reserves: 35.4 Bcfe (1) 97% Gas/NGLs; 62% PDP 5.7 MMcfe/d current net production (1) Based on Internal Engineer Reserve Estimates as of 6/30/10

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La Salle County, TX


2009 - Growth in Permian Basin Acquisition of producing assets in Ward County closed December 2009 for $55 million cash funded with equity proceeds Increased net oil production from the Permian by more than 100% High margin assets with inventory of PUD locations to be developed through 2013 Hedged ~90% of PDP production through 2013 at a weighted average price of $86.35/bbl

Drilling PUD

ACQUISITION SUMMARY Proved Reserves: 3.5 MMboe (1) 81% Oil and 44% PDP 96% average working interest (1) Based on Internal Engineer Reserve Estimates as of 6/30/10

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PUD Probable

Ward County, TX


2010 Mississippi Acquisition Acquisition of producing assets in Mississippi, Texas and New Mexico closed May 2010 for $113.1 million cash funded with equity proceeds Inventory of infill PUD locations to develop oil reserves with drilling plan in place for the next 3-4 years – designed to maintain production rate Very low operating costs (sub $5/bbl) and development costs ($6.90/bbl) equates to high margins Hedged ~56% of PDP production through 2013 at a weighted average price of $91.70/bbl

Indian Wells

NE Collins

Parker Creek

MS, TX AND NM RESERVES Proved Reserves: 4.7 MMboe (1) 96% Oil; 61% PDP (1) Based on Internal Engineer Reserve Estimates as of 6/30/10

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Major Producing Fields

Jones and Jasper Counties, MS


Asset and Location Diversification 12/31/07*: OIL, GAS AND NGL 1.5 , 2%

6/30/10**: OIL, GAS AND NGL 21.4, 12% GAS, BCFE

GAS, BCF OIL, BCFE

66.6, 39%

84.8, 49%

OIL, BCFE NGL, BCFE

65.3 , 98%

12/31/07*: BCFE BY AREA

6/30/10**: BCFE BY AREA 26.5, 15%

Appalachia

50.7, 29%

Appalachia

67.1 , 100%

53.3, 31%

South Texas and Texas Gulf Coast

42.2, 25%

* Outside engineer reserve report based on $92.50/Bbl WTI and $6.79/MMBtu Henry Hub

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** Internal engineer reserve estimates as of 6/30/10

Permian Basin

Mississippi


FINANCIAL OVERVIEW 18


Hedges Mitigate Distribution Risk Approximately 82% of expected natural gas production (total proved) through 2011 is hedged via a combination of swaps and collars at a weighted average floor price of $7.81 per MMBtu: 4th Qtr 2010

2011

93%

80%

Swaps

60%/$8.70

50%/$7.83

Collars

33%/$7.67-$8.94

30%/$7.34-$8.44

% Hedged

Approximately 48% of expected crude oil production (total proved) through 2013 is hedged via swaps and a collar at a weighted average floor price of $87.69 per barrel: 4th Qtr 2010

2011

2012

2013

68%

51%

45%

42%

Swaps

45%/$86.68

51%/$87.94

40%/$90.03

36%/$89.84

Collars

23%/$70-$80

N/A

5%/$80-$100.25

6%/$80-$100.25

% Hedged

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Hedged Cash Flow=Stable Distribution Coverage

2010 Crude Oil Prices WTI ($/Barrel)

2010 Natural Gas Prices ($/MMBtu) $2.00

$3.00

$4.00

$5.00

$6.00

$50.00

1.22x

1.21x

1.19x

1.18x

1.17x

$60.00

1.25x

1.24x

1.23x

1.21x

1.20x

$70.00

1.28x

1.27x

1.26x

1.25x

1.23x

$80.00

1.33x

1.31x

1.30x

1.29x

1.28x

$90.00

1.36x

1.35x

1.33x

1.32x

1.31x

Existing oil and gas hedges support the distributions in a period of volatile commodity prices

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Conservative Balance Sheet ($ in millions)

Facility Size Borrowing Base Amount Outstanding Borrowing Availability Maturity Date Interest Rate Pricing Grid (a): Borrowing Base Utilization of: less than 33% going to less than 50% 33% to 66% going to 50% to 75% 66% to 85% going to 75% to 90% greater than 85% going to greater than 90%

Interest Rate Hedges Expiring December 2010 through January 2013

June 30, 2009 $ 400 $ 154 $ 133 $ 22 March 31, 2011

October 1, 2012

L + 150 bps L + 175 bps L + 200 bps L + 213 bps

L + 225 bps L + 250 bps L + 275 bps L + 300 bps

Amount $100

Debt Covenants Adjusted EBITDA / Interest Expense Total Debt / Adjusted EBITDA Current Assets / Current Liabilities Percentage Drawn on Facility

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June 30,2010 $400 $240 $172 $68

Weighted Average Fixed LIBOR Rate 2.43% As of 6/30/10

2.5x Min 3.5x Max 1.0x Min 90% threshold

9.1x 2.6x 9.0x 72%


Major Taxation Points  All investors receive a partnership K-1 at the end of the year 

K-1 allocates the partnerships income and expenses to individual investors based on their percentage ownership of the partnership

 Quarterly distributions received are not taxed as dividends. 

Distributions lower the investors tax basis in the units which affects the capital gain calculation upon the sale of the unit.

 Deferred portion of taxes are due upon the sale of the unit 

Depreciation/Depletion expenses are recaptured and taxed at ordinary income rates

 Attractive estate planning tool as heirs get a step-up in cost basis of units 22


Key Investor Considerations High quality, long lived reserves Asset base generates stable cash flow Multi-year hedge program mitigates commodity risk Geographic and commodity diversity LLC structure gives unitholders a voice Management and unitholders are well aligned Attractive distribution yield Profitably grow company and increase distribution

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VNR Investor Relations Presentation