Energy Prospectus

Mr. Richard A. Robert, EVP and CFO, added, “This was an eventful quarter from a capital markets perspective. Issuing a new publicly traded perpetual preferred unit (VNRAP) was an important step in creating another source of financing to allow Vanguard to continue to execute its growth through acquisitions strategy. We are also pleased to announce an increase to our common unit distribution effective with our July 2013 distribution which will be paid in September. This reflects a continuation of our slow but steady approach to distribution growth.”

All of the MLPs in our High Yield Income Portfolio were selected because we believe they will continue to increase their cash distributions. VNR makes distributions monthly.

Distributable Cash Flow Available to Common Unitholders (a non-GAAP financial measure defined below) increased 156% to $48.4 million from the $18.9 million generated in the second quarter of 2012 and increased 17% from the $41.4 million generated in the first quarter of 2013.

Q2 production was higher than what I had in my forecast model.

On July 31, 2013, our board of directors approved an increase to our monthly cash distribution from $0.2050 to $0.2075 per common unit ($2.46 to $2.49 on an annualized basis) effective with our July distribution expected to be paid on September 13, 2013. Annual yield is 9.2% based on Friday's closing price of $27.05/unit.

From their cc:

Now, I'll turn quickly to give you a little update on our outlook for 2013. As Scott mentioned, we have increased the capital budget to between $60 million and $65 million, which encompasses capital associated with the Range Permian acquisition, a two rig Woodford drilling program and the other non-operated capital. Because of these changes as well as the multiple capital raises we have completed in the second quarter, our guidance for the year has also changed. Assuming the increase in our capital spending, but updated for actual results for the first half of the year, current strip prices, the range Permian acquisition and our recently announced distribution increase of $0.25, we anticipate our EBITDA to be in the range of $320 million to $325 million and our distribution coverage to be approximately 1.05 times for the full year 2013, absent any new acquisitions.

I will reiterate that this includes the full burden of the capital we raised in the second quarter. In light of the recent turmoil the upstream MLP space has encountered, we feel very fortunate to have raised money that we did, when we did. As Scott mentioned, many of our peers have recently announced large acquisitions and now being one of the few public upstream MLPs with a significant amount of liquidity puts us in an advantaged position in the acquisition market at least in the near term. We are confident that we will have an active second half of the year on the acquisition front, which should improve our distribution coverage for this year and going forward.

Vanguard Natural Resources, LLC (VNR): An updated Net Income & Cash Flow Forecast model has been posted under the MLP Tab.

VNR's monthly dividends are secure.