Energy Prospectus

Vanguard Natural cuts common unit distribution by 75% to 3c per unit
Vanguard Natural has declared a cash distribution attributable to the month of November of 3c per common unit, or 36c per unit on an annual basis, payable on January 14, 2016 to common unitholders of record on January 4, 2016. This distribution level represents an approximate 75% reduction from the 11.75c per common unit monthly distribution, or $1.41 per common unit on an annual basis, paid last month. Based on yesterday's closing price of $2.89, the new distribution provides a current yield of 12.5%. :theflyonthewall.com

CEOs are paid to do what is best for the long-term benefit of stakeholders. Paying down debt is definitely a better use of funds at this time.

Scott W. Smith, President & CEO of Vanguard commented, “Given the current commodity and capital markets environment, we believe the most prudent strategy is to reduce the cash distribution payout on our common units. Lowering the common unit distribution from $1.41 annualized to $0.36 annualized reduces the cash required for distributions from approximately $185 million to $47 million. Excess cash flow that is generated by this action will be directed at paying down debt under Vanguard’s revolving credit facility and is expected to result in significant distribution coverage in both 2016 and 2017 based on current commodity strip prices. We believe it is in the best long-term interest of the Company to redirect our excess cash flow in this manner and better position Vanguard when a commodity price recovery occurs in the future.”