UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.   )

 

Check the appropriate box:

EAGLE ROCK ENERGY PARTNERS, L.P.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

 

On May 21, 2015, Eagle Rock Energy Partners, L.P. (“Eagle Rock”) and Vanguard Natural Resources, LLC (“Vanguard”) entered into an agreement and plan of merger, pursuant to which an indirect subsidiary of Vanguard will merge with and into Eagle Rock (the “merger”), with Eagle Rock surviving the merger as a wholly owned indirect subsidiary of Vanguard (as such agreement may be amended from time to time, the “merger agreement”). The general partner interest of Eagle Rock is indirectly owned by Eagle Rock and will remain outstanding following the merger. Under the terms of the merger agreement, holders of Eagle Rock common units (“Eagle Rock unitholders”) will receive 0.185 common units of Vanguard for each Eagle Rock common unit held (the “merger consideration”). The exchange ratio for the merger consideration is fixed and will not be adjusted to reflect changes in the price of Eagle Rock common units or Vanguard common units prior to the closing of the transactions contemplated by the merger agreement. The merger consideration represented a 24.5% premium to the closing price of Eagle Rock’s common units on May 21, 2015 (the last full trading day prior to the announcement of the merger). The common units of Eagle Rock are traded on the NASDAQ Global Select Market under the symbol “EROC,” and the common units of Vanguard are traded on the NASDAQ Global Select Market under the symbol “VNR.” In connection with the merger, certain merger-related compensation payments may become payable to Eagle Rock’s named executive officers (the “merger-related compensation”). 

The board of directors (“Eagle Rock Board”) of Eagle Rock Energy G&P, LLC (“Eagle Rock G&P”), the general partner of the general partner of Eagle Rock, has unanimously (i) determined that the merger agreement is advisable to and in the best interests of Eagle Rock and its unitholders, (ii) approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and (iii) recommended that Eagle Rock unitholders vote to approve the merger agreement and the transactions contemplated thereby. In addition, the Eagle Rock Board has resolved to recommend that the Eagle Rock unitholders approve the merger-related compensation proposal. Accordingly, the Eagle Rock Board recommends that Eagle Rock unitholders vote “FOR” the approval of the merger agreement and the transactions contemplated thereby and “FOR” the approval of the merger-related compensation proposal. The board of directors of Vanguard (the “Vanguard Board”) has unanimously (i) determined that the merger, the merger agreement, and the transactions contemplated thereby, including the issuance of Vanguard common units as merger consideration pursuant to the merger agreement (the “Vanguard common unit issuance”), are advisable to and in the best interests of Vanguard and its unitholders, (ii) approved the merger, the merger agreement and the transactions contemplated thereby, including the Vanguard common unit issuance, and (iii) recommended that the holders of Vanguard common units and class B units, voting together as a single class, vote in favor of the Vanguard common unit issuance. Accordingly, the Vanguard Board recommends that the holders of Vanguard common units and class B units vote “FOR” the Vanguard common unit issuance.

Vanguard has also entered into a Purchase Agreement and Plan of Merger (as such agreement may be amended from time to time, the “LRE merger agreement”) with LRR Energy, L.P. (“LRE”), pursuant to which, subject to the terms and conditions thereof, a subsidiary of Vanguard will merge with and into LRE (the “LRE merger”), with LRE continuing as the surviving entity, and, at the same time, Vanguard will purchase all of the limited liability company interests in LRE GP, LLC, the general partner of LRE (“LRE GP”), resulting in both LRE and LRE GP becoming wholly owned subsidiaries of Vanguard. Neither the Vanguard unitholders nor the Eagle Rock unitholders are entitled to vote with respect to the approval of the LRE merger agreement or the LRE merger. The completion of the LRE merger is not a condition to the completion of the merger, and the completion of the merger is not a condition to the completion of the LRE merger.

If the transactions contemplated by the LRE merger agreement (the “LRE Transactions”) are consummated, immediately following the completion of both the merger and the LRE Transactions, it is expected that Eagle Rock unitholders will own approximately 22.0% of the outstanding common units of Vanguard. If, however, the LRE Transactions are not consummated, immediately following the completion of the merger, it is expected that Eagle Rock unitholders will own approximately 24.9% of the outstanding common units of Vanguard.

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Vanguard and Eagle Rock will each hold meetings of their respective unitholders in connection with the proposed merger. Vanguard is holding its annual unitholder meeting at Vanguard’s offices on 5847 San Felipe, Suite 3000, Houston, Texas 77057 on October 5, 2015 at 10:00 a.m., local time, to obtain the vote of its common unitholders and class B unitholders to, among other things, approve the Vanguard common unit issuance. Vanguard is also seeking to obtain the election of five director nominees to serve on the Vanguard Board until the 2016 annual meeting of unitholders and the ratification of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015. The proposal to approve the Vanguard common unit issuance will be approved if the holders, as of the record date of the annual meeting, of a majority of the outstanding Vanguard common units and class B units, voting together as a single class, present in person or represented by proxy, entitled to vote on the proposal and actually voting at the annual meeting, vote to approve the Vanguard common unit issuance. Eagle Rock is holding a special meeting of its unitholders at 1415 Louisiana Street, Suite 3900, Houston, TX 77002 on October 5, 2015 at 10:00 a.m., local time, to obtain the vote of its common unitholders to approve the merger agreement and the transactions contemplated thereby. The proposal to approve the merger agreement and the transactions contemplated thereby will be approved if the holders, as of the record date of the special meeting, of a majority of the outstanding Eagle Rock common units vote to approve the merger agreement and the transactions contemplated thereby at the Eagle Rock special meeting. 

The Vanguard Board recommends that Vanguard common unitholders and class B unitholders vote “FOR” the Vanguard common unit issuance, “FOR” election of each of the five director nominees to serve on the Vanguard Board until the 2016 annual meeting of unitholders and “FOR” the ratification of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015.

The Eagle Rock Board recommends that Eagle Rock common unitholders vote “FOR” the approval of the merger agreement and the transactions contemplated thereby and “FOR” the approval of the merger related compensation proposal.

On behalf of the Vanguard Board and the Eagle Rock Board, respectively, we cordially invite you to attend the annual meeting of Vanguard (if you are a Vanguard unitholder) and the special meeting of Eagle Rock (if you are an Eagle Rock unitholder). Whether or not you expect to attend the Vanguard annual meeting (if you are a Vanguard unitholder) or the Eagle Rock special meeting (if you are an Eagle Rock unitholder) in person, we urge you to read carefully the accompanying joint proxy statement/prospectus (and the documents contained in or incorporated by reference into the accompanying joint proxy statement/prospectus), which includes important information about the merger agreement, the proposed merger, Eagle Rock, Vanguard, the Eagle Rock special meeting and the Vanguard annual meeting, and to submit your proxy as soon as possible through one of the delivery methods described in the accompanying joint proxy statement/prospectus. Please pay particular attention to the section titled “Risk Factors” beginning on page 48 of the accompanying joint proxy statement/prospectus.

Scott W. Smith President and Chief Executive Officer of Vanguard Natural Resources LLC		Joseph A. Mills Chairman of the Board of Directors and Chief Executive Officer of Eagle Rock Energy G&P, LLC

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying joint proxy statement/prospectus or determined that the accompanying joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The information concerning Vanguard contained in this joint proxy statement/prospectus or incorporated by reference has been provided by Vanguard, and the information concerning Eagle Rock contained in this joint proxy statement/prospectus or incorporated by reference has been provided by Eagle Rock.

The accompanying joint proxy statement/prospectus is dated September 3, 2015 and is first being mailed to the unitholders of Vanguard and unitholders of Eagle Rock on or about September 4, 2015.

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Vanguard Natural Resources, LLC
 
5847 San Felipe, Suite 3000
 
Houston, Texas 77057
 
NOTICE OF ANNUAL MEETING OF UNITHOLDERS

To the Unitholders of Vanguard Natural Resources, LLC: 

Notice is hereby given that the annual meeting of unitholders of Vanguard Natural Resources, LLC, a Delaware limited liability company (“Vanguard”), will be held at 5847 San Felipe, Suite 3000, Houston, Texas 77057 on October 5, 2015 at 10:00 a.m., local time, solely for the following purposes:

Merger-Related Proposal

Annual Meeting Proposals

Vanguard common unitholders and class B unitholders may also be asked to transact such other business as may properly come before the annual meeting of unitholders and any adjournment or postponement of the annual meeting. At this time, Vanguard knows of no other matters that will be presented for the consideration of its common unitholders and class B unitholders at the annual meeting.

These items of business are described in detail in the accompanying joint proxy statement/prospectus. Among other things, the Vanguard Board has unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger and the Vanguard common unit issuance, are advisable to and in the best interests of Vanguard and its unitholders. Accordingly, the Vanguard Board unanimously approved the merger agreement and recommends that the Vanguard common unitholders and class B unitholders vote “FOR” the Vanguard common unit issuance. The Vanguard Board also recommends that the Vanguard common unitholders and class B unitholders vote “FOR” election of each of the five director nominees to serve on the Vanguard Board until the 2016 annual meeting of unitholders and “FOR” the ratification of the appointment of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015.

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Only unitholders of record as of the close of business on August 6, 2015, the record date for determination of holders entitled to notice of and to vote at the Vanguard annual meeting, are entitled to notice of the Vanguard annual meeting and to vote at the Vanguard annual meeting or at any adjournment or postponement thereof. A list of unitholders entitled to vote at the Vanguard annual meeting will be available in Vanguard’s offices located at 5847 San Felipe, Suite 3000, Houston, Texas 77057, during regular business hours for a period of ten days before the Vanguard annual meeting, and at the annual meeting.

Approval of the Vanguard common unit issuance is a condition to the consummation of the merger and requires the affirmative vote of the holders, as of the record date of the annual meeting, of a majority of the outstanding Vanguard common units and class B units, voting together as a single class, present in person or represented by proxy, entitled to vote on the proposal and actually voting at the annual meeting. Therefore, your vote is very important.

By order of the board of directors,

Richard A. Robert
Executive Vice President, Chief Financial Officer,
Secretary and Director of Vanguard Natural
Resources, LLC

Houston, Texas
September 3, 2015 

YOUR VOTE IS IMPORTANT!

REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE VANGUARD ANNUAL MEETING IN PERSON, IT IS IMPORTANT THAT YOUR UNITS BE REPRESENTED. WE URGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) VIA THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE PREPAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the Vanguard annual meeting. If your Vanguard common units or class B units are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished to you by such record holder. If your Vanguard common units or class B units are held in the name of a broker, bank or other nominee, but you choose to attend the Vanguard annual meeting in person, please bring a copy of your brokerage statement reflecting unit ownership as of the record date.

We urge you to read the accompanying joint proxy statement/prospectus, including all documents included in or incorporated by reference into the accompanying joint proxy statement/prospectus, and its annexes carefully and in their entirety. If you have any questions concerning the merger, the merger agreement, the Vanguard common unit issuance, the election of directors to the Vanguard Board, the appointment of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015, or the Vanguard annual meeting or the accompanying joint proxy statement/prospectus, or would like additional copies of the accompanying joint proxy statement/prospectus or need help voting your Vanguard common units or class B units, please contact Vanguard’s investor relations department:

Vanguard Natural Resources, LLC
Attention: Investor Relations
5847 San Felipe, Suite 3000
Houston, Texas 77057
(832) 327-2234
investorrelations@vnrllc.com

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF UNITHOLDERS TO BE HELD ON OCTOBER 5, 2015. The notice of Annual Meeting and Proxy Statement and 2014 Annual Report to Unitholders are available on the internet at www.proxyvote.com.

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Eagle Rock Energy Partners, L.P.
 
1415 Louisiana Street, Suite 2700
 
Houston, Texas 77002
 
NOTICE OF SPECIAL MEETING OF UNITHOLDERS

To the Unitholders of Eagle Rock Energy Partners, L.P.:

Notice is hereby given that a special meeting of unitholders of Eagle Rock Energy Partners, L.P., a Delaware limited partnership (“Eagle Rock”), will be held at 1415 Louisiana Street, Suite 3900, Houston, TX 77002 on October 5, 2015 at 10:00 a.m., local time, solely for the following purposes: 

Eagle Rock will transact no other business at the special meeting except such business as may properly be brought before the special meeting and any adjournment or postponement of the special meeting. At this time, Eagle Rock knows of no other matters that will be presented for the consideration of its common unitholders at the special meeting.

These items of business, including the approval of the merger agreement and the merger, are described in detail in the accompanying joint proxy statement/prospectus. Among other things, the board of directors of Eagle Rock Energy G&P, LLC (the “Eagle Rock Board”), the general partner of Eagle Rock GP, which is the general partner of Eagle Rock, has determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable to and in the best interests of Eagle Rock and its unitholders. Accordingly, the Eagle Rock Board unanimously approved the merger agreement and recommends that the Eagle Rock unitholders vote “FOR” the proposal to approve the merger agreement and the transactions contemplated thereby and “FOR” the advisory merger-related compensation proposal.

In connection with the execution of the merger agreement, on May 21, 2015, Vanguard entered into a voting and support agreement (the “support agreement”) with Natural Gas Partners VIII, L.P. (“NGP VIII”) and certain of its affiliates (collectively, the “NGP Parties”), as holders of Eagle Rock common units, pursuant to which the NGP Parties agreed, subject to the terms of the support agreement, to vote all of their Eagle Rock common units in favor of the approval of the merger agreement and to take other actions in furtherance of the merger. Collectively, the NGP Parties hold Eagle Rock common units representing approximately 34.9% of the votes of Eagle Rock’s outstanding common units as of August 27, 2015. The support agreement also includes a grant by the Partnership to NGP VIII of an irrevocable limited waiver (the “NGP Voting Agreement Waiver”) of certain provisions of the existing voting agreement between the Partnership and NGP VIII, dated May 3, 2011, to allow NGP VIII and certain of NGP VIII’s affiliates to

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comply with the obligations under the support agreement discussed above. The NGP Voting Agreement Waiver will be effective until the support agreement is amended, modified or terminated.

Only unitholders of record as of the close of business on August 6, 2015 are entitled to notice of the Eagle Rock special meeting and to vote at the Eagle Rock special meeting or at any adjournment or postponement thereof. A list of unitholders entitled to vote at the Eagle Rock special meeting will be available in Eagle Rock’s offices located at 1415 Louisiana Street, Suite 2700, Houston, Texas 77002, during regular business hours for a period of ten days before the Eagle Rock special meeting, and at the special meeting.

Approval of the merger agreement and the transactions contemplated thereby by the Eagle Rock unitholders is a condition to the consummation of the merger and requires the affirmative vote of the holders, as of the record date of the special meeting, of a majority of the outstanding Eagle Rock common units. Therefore, your vote is very important.

Your failure to vote your Eagle Rock common units or abstaining from the vote will have the same effect as a vote cast “AGAINST” approval of the merger agreement and the transactions contemplated thereby. 

By order of the board of directors,

Charles C. Boettcher
Senior Vice President, General Counsel and
Secretary of Eagle Rock Energy G&P, LLC

Houston, Texas
September 3, 2015

YOUR VOTE IS IMPORTANT!

REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE EAGLE ROCK SPECIAL MEETING IN PERSON, IT IS IMPORTANT THAT YOUR COMMON UNITS BE REPRESENTED. WE URGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) VIA THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE PREPAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the vote on the proposal to approve the merger agreement is taken at the Eagle Rock special meeting. If your Eagle Rock common units are held in the name of a broker, bank or other holder of record, please follow the instructions on the voting instruction card furnished to you by such record holder. If your Eagle Rock common units are held in the name of a broker, bank or other nominee, but you choose to attend the Eagle Rock special meeting in person, please bring a copy of your brokerage statement reflecting unit ownership as of the record date.

We urge you to read the accompanying joint proxy statement/prospectus, including all documents included in or incorporated by reference into the accompanying joint proxy statement/prospectus, and its annexes carefully and in their entirety. If you have any questions concerning the merger, the merger agreement, the advisory, non-binding vote on the merger-related compensation payments that, pursuant to existing contractual arrangements, may become payable to Eagle Rock’s named executive officers in connection with the merger, the Eagle Rock special meeting or the accompanying joint proxy statement/prospectus, or would like additional copies of the accompanying joint proxy statement/prospectus or need help voting your Eagle Rock common units, please contact Eagle Rock’s proxy solicitor:

Morrow & Co., LLC
470 West Avenue — 3^rd Floor
Stamford, CT 06902
Unitholders, call toll-free: (877) 757-5405
Banks and brokers, call: (203) 658-9400

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ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates by reference important business and financial information about Vanguard and Eagle Rock from other documents filed with the Securities and Exchange Commission (the “SEC”) that are not included in or delivered with this joint proxy statement/prospectus. See “Where You Can Find More Information.” 

Documents incorporated by reference are available to you without charge upon written or oral request. You can obtain any of these documents by requesting them in writing or by telephone from the appropriate party at the following addresses and telephone numbers.

Vanguard Natural Resources, LLC Attention: Investor Relations 5847 San Felipe, Suite 3000 Houston, Texas 77057 (832) 327-2234 investorrelations@vnrllc.com		Eagle Rock Energy Partners, L.P. Attention: Investor Relations 1415 Louisiana Street, Suite 2700 Houston, TX 77002 (281) 408-1203 info@eaglerockenergy.com

To receive timely delivery of the requested documents in advance of the Vanguard annual meeting or the Eagle Rock special meeting, you should make your request no later than September 28, 2015.

ABOUT THIS DOCUMENT

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by Vanguard (File No. 333-204982), constitutes a notice of meeting and a proxy statement of Vanguard under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the Vanguard annual meeting at which Vanguard unitholders will be asked to consider and vote on, among other matters, a proposal to approve the Vanguard common unit issuance, the election of five director nominees to the Vanguard Board, and the ratification of the appointment of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015, and a prospectus of Vanguard under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Vanguard common units to be issued pursuant to the merger agreement. This joint proxy statement/prospectus also constitutes a notice of meeting and a proxy statement of Eagle Rock under Section 14(a) of the Exchange Act with respect to the Eagle Rock special meeting at which Eagle Rock unitholders will be asked to consider and vote on, among other matters, a proposal to approve the merger agreement and the transactions contemplated thereby and an advisory, non-binding approval of merger-related compensation matters.

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated September 3, 2015. The information contained in this joint proxy statement/prospectus is accurate only as of that date or, in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies. Neither the mailing of this joint proxy statement/prospectus to Vanguard unitholders or Eagle Rock unitholders nor the Vanguard common unit issuance will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in each case, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

The information concerning Vanguard contained in this joint proxy statement/prospectus or incorporated by reference has been provided by Vanguard, and the information concerning Eagle Rock contained in this joint proxy statement/prospectus or incorporated by reference has been provided by Eagle Rock.

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QUESTIONS AND ANSWERS			1
SUMMARY			14
The Parties			14
The Merger			14
Merger Consideration			14
Treatment of Equity Awards			14
Vanguard Annual Unitholder Meeting; Unitholders Entitled to Vote; Vote Required			15
Eagle Rock Special Unitholder Meeting; Unitholders Entitled to Vote; Vote Required			16
Recommendation of the Vanguard Board and Its Reasons for the Merger			17
Recommendation of the Eagle Rock Board and Its Reasons for the Merger			17
Voting and Support Agreement			17
Registration Rights Agreement			18
Opinion of the Financial Advisor to Vanguard			18
Opinion of the Financial Advisor to Eagle Rock			19
Ownership of Vanguard After the Merger			19
Interests of Directors and Executive Officers of Eagle Rock G&P in the Merger			19
Risks Relating to the Merger and Ownership of Vanguard Common Units			20
Material U.S. Federal Income Tax Consequences of the Merger			21
Accounting Treatment of the Merger			22
Listing of Vanguard Common Units; Delisting and Deregistration of Eagle Rock Common Units			22
No Appraisal Rights			22
Conditions to Consummation of the Merger			22
Regulatory Approvals			23
No Solicitation by Eagle Rock of Alternative Proposals			23
Change in the Eagle Rock Board Recommendation			24
Termination of the Merger Agreement			25
Termination Fee			26
Expenses			26
Comparison of Rights of Vanguard Common Unitholders and Eagle Rock Common Unitholders			26
Litigation Relating to the Merger			26
Litigation Relating to the LRE Merger			27
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF VANGUARD			29
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF EAGLE ROCK			35
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION			40
UNAUDITED COMPARATIVE PER UNIT INFORMATION			42
COMPARATIVE UNIT PRICES AND DISTRIBUTIONS			45

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RISK FACTORS			48
Risk Factors Relating to the Merger			48
Risk Factors Relating to the Ownership of Vanguard Common Units			55
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			62
THE PARTIES			64
THE VANGUARD ANNUAL MEETING			66
VANGUARD PROPOSAL 1: THE COMMON UNIT ISSUANCE PROPOSAL			71
VANGUARD PROPOSAL 2: ELECTION OF DIRECTORS			72
VANGUARD PROPOSAL 3: RATIFICATION OF BDO USA, LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2015			74
SUBMISSION OF UNITHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR VANGUARD’S 2016 ANNUAL MEETING OF UNITHOLDERS			75
THE EAGLE ROCK SPECIAL MEETING			77
EAGLE ROCK PROPOSAL 1: THE MERGER PROPOSAL			82
EAGLE ROCK PROPOSAL 2: ADVISORY VOTE ON MERGER-RELATED NAMED EXECUTIVE OFFICER COMPENSATION			83
THE MERGER			84
Effect of the Merger			84
Background of the Merger			85
Recommendation of the Vanguard Board and Its Reasons for the Merger			99
Opinion of the Financial Advisor to Vanguard			100
Recommendation of the Eagle Rock Board and Its Reasons for the Merger			109
Opinion of the Financial Advisor to Eagle Rock			114
Voting and Support Agreement			126
Registration Rights Agreement			128
Unaudited Prospective Financial and Operating Information of Eagle Rock, Vanguard and LRE			128
Interests of Directors and Executive Officers of Eagle Rock G&P in the Merger			136
No Appraisal Rights			144
Accounting Treatment of the Merger			144
Regulatory Approvals			145
Listing of Vanguard Common Units			145
Delisting and Deregistration of Eagle Rock Common Units			145
Ownership of Vanguard After the Merger			145
Restrictions on Sales of Vanguard Common Units Received in the Merger			145
Board of Directors and Executive Officers Following the Merger			146
Litigation Relating to the Merger			146
THE MERGER AGREEMENT			147
The Merger			147
Effective Time; Closing			147
Merger Consideration			148
Treatment of Equity Awards			148

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Adjustments to Prevent Dilution			149
Withholding			149
Distributions			149
Conditions to Consummation of the Merger			149
Eagle Rock Unitholder Approval			152
Vanguard Unitholder Approval			153
No Solicitation by Eagle Rock of Alternative Proposals			154
Change in the Eagle Rock Board Recommendation			155
Regulatory Matters			156
Termination of the Merger Agreement			157
Termination Fee			158
Expenses			159
Conduct of Business Pending the Consummation of the Transactions Contemplated by the Merger Agreement			159
Indemnification; Directors’ and Officers’ Insurance			163
Employee Matters			164
Financing Matters			165
Amendment of Merger Agreement			165
Remedies; Specific Performance			165
Representations and Warranties			165
Additional Agreements			167
VANGUARD NATURAL RESOURCES, LLC UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION			168
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			204
Tax Opinions Required as a Condition to Closing			204
Assumptions Related to the U.S. Federal Income Tax Treatment of the Merger			205
U.S. Federal Income Tax Treatment of the Merger			206
Tax Consequences of the Merger to Eagle Rock			206
Tax Consequences of the Merger to Eagle Rock Common Unitholders			206
Tax Basis and Holding Period of the Vanguard Common Units Received			207
Effect of Termination of Eagle Rock’s Tax Year at Closing of Merger			208
Tax Consequences of the Merger to Vanguard and Its Unitholders			208
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF VANGUARD COMMON UNIT OWNERSHIP			209
Partnership Status			210
Limited Partner Status			211
Tax Consequences of Unit Ownership			211
Tax Treatment of Operations			216
Disposition of Common Units			221
Uniformity of Units			223

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Tax-Exempt Organizations and Other Investors			223
Administrative Matters			224
State, Local, Foreign and Other Tax Considerations			227
DESCRIPTION OF VANGUARD COMMON UNITS			229
Where Common Units Are Traded			229
Issuance of Additional Units			229
Voting Rights			229
Transfer Agent and Registrar			229
Transfer of Common Units			230
Summary of Limited Liability Company Agreement			230
COMPARISON OF RIGHTS OF VANGUARD COMMON UNITHOLDERS AND EAGLE ROCK COMMON UNITHOLDERS			231
Purpose			231
Outstanding Units			231
Issuance of Additional Securities			232
Distributions of Available Cash			232
Distributions of Cash upon Liquidation			235
Merger, Sale or Other Disposition of Assets			236
Election of Directors			237
Meetings; Voting; Voting Rights			238
Withdrawal or Removal of the General Partner; Election of General Partner			240
Transfer of General Partner Interests			241
No or Limited Preemptive Right			241
Limited Call Right			241
Amendment of Limited Liability Company Agreement or Partnership Agreement			242
Indemnification			246
Fiduciary Duties; Conflicts of Interest			247
Anti-Takeover Provisions			248
Dissolution			250
Transfer of Units; Status as Member, Limited Partner or Assignee			251
ADDITIONAL INFORMATION ABOUT THE VANGUARD BOARD			252
Determination of Independence of Directors			252
Corporate Governance			252
Board Leadership Structure and Role in Risk Oversight			253
Committees of the Board of Directors			253
Section 16(a) Beneficial Ownership Reporting Compliance			254
Nominations for Director			255
Unitholder Communications			255
Compensation and Indemnification of Directors			256

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Compensation Committee Interlocks and Insider Participation			256
Related Person Transactions			256
Report of the Audit Committee			256
VANGUARD’S EXECUTIVE OFFICERS			258
VANGUARD’S EXECUTIVE COMPENSATION			259
Compensation Discussion and Analysis			259
Employment Agreements			262
2014 Executive Compensation Components			263
Termination Arrangements and Change in Control Provisions			267
Risk Considerations in Vanguard Overall Compensation Program			267
Tax and Accounting Implications			267
Compensation-Related Governance Practices			268
Report of the Compensation Committee			268
2014 Summary Compensation Table			269
Grants of Plan Based Awards			270
Outstanding Equity Awards at December 31, 2014			270
Option Exercises and Units Vested Table			271
Pension Benefits			272
Non-Qualified Deferred Compensation			272
Potential Payments upon Termination or Change in Control			273
Non-Competition Provisions			276
Director Compensation			276
2014 Director Summary Compensation Table			277
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF VANGUARD			278
LEGAL MATTERS			279
EXPERTS			280
WHERE YOU CAN FIND MORE INFORMATION			281
ANNEX A: Agreement and Plan of Merger			A-1
ANNEX B: Voting and Support Agreement			B-1
ANNEX C: Opinion of Wells Fargo Securities, LLC			C-1
ANNEX D: Opinion of Evercore Group L.L.C.			D-1

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QUESTIONS AND ANSWERS

Set forth below are questions that you may have regarding the merger and the proposals being considered at the Vanguard annual meeting and the Eagle Rock special meeting, and brief answers to those questions. You are urged to read carefully this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety, including the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus, and the documents contained in and incorporated by reference into this joint proxy statement/prospectus, because this section may not provide all of the information that is important to you with respect to the merger, the Vanguard annual meeting and the Eagle Rock special meeting. You may obtain a list of the documents incorporated by reference into this joint proxy statement/prospectus in the section titled “Where You Can Find More Information.”

This document is being delivered to you as both a proxy statement of Eagle Rock and a proxy statement and prospectus of Vanguard in connection with the merger. It is the proxy statement by which the Eagle Rock Board is soliciting proxies from the Eagle Rock common unitholders to vote at the Eagle Rock special meeting or at any adjournment or postponement of the Eagle Rock special meeting on the approval of the merger agreement and the transactions contemplated thereby, as well as an advisory, non-binding proposal concerning merger-related compensation payments that, pursuant to existing contractual arrangements, may become payable to Eagle Rock’s named executive officers in connection with the merger. It is also the proxy statement by which the Vanguard Board is soliciting proxies from the Vanguard common unitholders and class B unitholders to vote on the Vanguard common unit issuance at the Vanguard annual meeting, or at any adjournment or postponement of the Vanguard annual meeting, and the prospectus by which Vanguard will issue Vanguard common units to Eagle Rock common unitholders in the merger.

In addition to the proposals related to the merger, Vanguard is seeking the approval of its unitholders for the election of director nominees to the Vanguard Board and the ratification of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015.

Your vote is important. We encourage you to submit your proxy to vote your units as soon as possible.

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Vanguard unitholders will continue to receive distributions on their Vanguard common units in accordance with Vanguard’s limited liability company agreement and at the discretion of the Vanguard Board.

Merger-Related Proposal

Annual Meeting Proposals

Vanguard common unitholders and class B unitholders may also be asked to transact such other business as may properly come before the annual meeting of unitholders and any adjournment or postponement of the annual meeting. At this time, Vanguard knows of no other matters that will be presented for the consideration of its common unitholders and class B unitholders at the annual meeting.

The approval of the Vanguard common unit issuance by Vanguard unitholders is a condition to the obligations of Vanguard and Eagle Rock to complete the merger. If after the final adjournment of the Vanguard annual meeting, the merger agreement is terminated by either Vanguard or Eagle Rock due to Vanguard’s failure to obtain unitholder approval for the Vanguard common unit issuance, Vanguard will be required to pay Eagle Rock a termination fee of $20,000,000. The approvals of the other proposals are not conditions to the obligations of Vanguard and Eagle Rock to complete the merger.

Eagle Rock unitholders:  Eagle Rock’s unitholders are being asked to vote on the following proposals:

The approval of the proposal to approve the merger agreement and the transactions contemplated thereby by Eagle Rock unitholders is a condition to the obligations of Eagle Rock and Vanguard to complete the transactions contemplated by the merger agreement. The approval (on an advisory, non-binding basis) of the merger-related compensation proposal is not a condition to the obligations of Eagle Rock or Vanguard to complete the transactions contemplated by the merger agreement.

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The proposal to ratify the independent registered public accountant of Vanguard is a routine matter, and therefore if a unitholder’s Vanguard common units or class B units are held in a brokerage account, bank account or with another nominee, such broker, bank or other nominee holds discretionary authority to vote on such proposal. As a result, Vanguard common units or class B units that are entitled to be voted at the discretion of brokers, banks and other nominees will be deemed present at the meeting and counted for purposes of determining the presence of a quorum.

Eagle Rock unitholders:  A majority of the outstanding Eagle Rock common units must be represented in person or by proxy at the meeting in order to constitute a quorum at the Eagle Rock special meeting. Abstentions will be counted in determining whether a quorum is present at the Eagle Rock special meeting.

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Merger-Related Proposal

Annual Meeting Proposals

Eagle Rock unitholders:  The following are the vote requirements for the proposals to be voted upon at the Eagle Rock special meeting:

In connection with the execution of the merger agreement on May 21, 2015, Vanguard entered into a voting and support agreement (the “support agreement”) with Natural Gas Partners VIII, L.P. (“NGP VIII”) and certain of its affiliates (collectively, the “NGP Parties”), and, solely with respect to the waiver of certain provisions of an existing voting agreement as well as the termination and other miscellaneous provisions of the support agreement, Eagle Rock and Eagle Rock GP, pursuant to which the NGP Parties have agreed, subject to the terms of the support agreement, to vote all of their Eagle Rock common units in favor of the approval of the merger agreement and the transactions contemplated thereby. Collectively, the NGP Parties hold Eagle Rock common units representing approximately 34.9% of the votes of Eagle Rock’s outstanding common units as of August 27, 2015.

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As of the record date, there were 86,604,907 Vanguard common units outstanding and 420,000 class B units outstanding, all of which are entitled to vote at the Vanguard annual meeting.

Eagle Rock unitholders:  Holders of Eagle Rock’s common units outstanding as of the close of business on August 6, 2015, the record date for the determination of unitholders entitled to notice of and to vote at the Eagle Rock special meeting, are entitled to one vote per unit at the Eagle Rock special meeting.

As of the record date, there were 152,986,718 Eagle Rock common units outstanding, all of which are entitled to vote at the Eagle Rock special meeting. 

Eagle Rock unitholders:  The Eagle Rock special meeting will be held at 1415 Louisiana Street, Suite 3900, Houston, TX, 77002 on October 5, 2015 at 10:00 a.m., local time.

Even if you plan to attend the Vanguard annual meeting in person, you are encouraged to submit your proxy as described above to ensure that your vote will be counted if you later decide not to attend the Vanguard annual meeting.

If your Vanguard common units or class B units are held by a broker, bank or other nominee, also known as holding units in “street name,” you should receive instructions from the broker, bank or other nominee that you must follow in order to have your units voted. Please review such instructions to determine whether you will be able to submit your proxy via the Internet or by telephone. The deadline for submitting your proxy by telephone or electronically via the Internet is 11:59 p.m. Eastern Time October 4, 2015 (the “Vanguard Telephone/Internet deadline”).

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Eagle Rock unitholders:  If you are a record holder, there are four ways you may cause your units to be voted at the Eagle Rock special meeting:

Even if you plan to attend the Eagle Rock special meeting in person, you are encouraged to submit your proxy as described above to ensure that your vote will be counted if you later decide not to attend the Eagle Rock special meeting. 

If your Eagle Rock common units are held by a broker, bank or other nominee, also known as holding units in “street name,” you should receive instructions from the broker, bank or other nominee that you must follow in order to have your units voted. Please review such instructions to determine whether you will be able to submit your proxy via the Internet or by telephone. The deadline for submitting your proxy by telephone or electronically via the Internet is 11:59 p.m. Eastern Time October 4, 2015 (the “Eagle Rock Telephone/Internet deadline”).

If your Vanguard common units or class B units are held in an account at a broker, bank or other nominee or through another nominee, such broker, bank or other nominee cannot validly vote your units on your behalf concerning the Vanguard common unit issuance and the election of directors. If you want your broker-held common units or class B units to be voted on either or both of these proposals, you must instruct your broker, bank or other nominee on how to vote your units for such proposals. This rule applies because these proposals are considered non-routine matters under applicable NYSE rules, and therefore your broker, bank or other nominee does not have discretionary authority to vote your units on your behalf for such proposals in lieu of having received specific instructions from you. Again, most brokers, banks and other nominees offer the ability for unitholders to submit voting instructions by mail by completing a voting instruction card, by telephone and via the Internet.

If you do not provide voting instructions to your broker, bank or other nominee regarding the two non-routine proposals mentioned above, your Vanguard units will not be voted on those proposals. This is referred to in this joint proxy statement/prospectus and in general as a broker non-vote. If there are any broker non-votes, they will be counted as units that are present and entitled to be voted for purposes of determining the presence of a quorum at the annual meeting, where and when a broker, bank or other nominee registers such units as being present for such purposes. But the broker or other nominee will not be able to vote on those matters for which specific authorization is required. Under the current rules of the New York Stock Exchange (“NYSE”), brokers, banks and other nominees who are members of the NYSE do not have discretionary authority to vote on the proposal to issue Vanguard common units pursuant to the merger agreement or the election of directors, but have discretionary authority to vote on

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the proposal to ratify BDO USA, LLP as Vanguard’s independent registered public accounting firm for the fiscal year ending December 31, 2015.

A broker non-vote (if any) will not count as a vote cast “FOR” or “AGAINST” (i) the approval of Vanguard common unit issuance or (ii) the election of directors. A broker non-vote will, however, count for purposes of determining the presence of a quorum at the Vanguard annual meeting.

Eagle Rock unitholders:  No. If your Eagle Rock common units are held in an account at a broker, bank or other nominee, you must instruct the broker, bank or other nominee on how to vote your Eagle Rock common units by following the instructions that the broker, bank or other nominee provides to you with these materials. Most brokers, banks and other nominees offer the ability for unitholders to submit voting instructions by mail by completing a voting instruction card, by telephone and via the Internet.

Under the current rules of the NYSE, brokers who are members of the NYSE do not have discretionary authority to vote on the proposal to approve the merger agreement and the transactions contemplated thereby. If you do not provide voting instructions to your broker, bank or other nominee, your Eagle Rock common units will not be voted on any proposal on which your broker, bank or other nominee does not have discretionary authority to vote.

Merger-Related Proposal

Annual Meeting Proposals

If you hold your Vanguard units through a broker, bank or other nominee, you must follow the directions you receive from your broker, bank or other nominee in order to change your voting instructions.

Eagle Rock unitholders:  If you submit your proxy by telephone, via the Internet or by signing and returning your proxy card, the officers named in your proxy card will vote your units in the manner you requested if you correctly submitted your proxy. If you sign your proxy card and return it without indicating how you would like to vote your units, your units will be voted as the Eagle Rock Board recommends, which is:

If you hold your Eagle Rock common units through a broker, bank or other nominee, you must follow the directions you receive from your broker, bank or other nominee in order to change your voting instructions.

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Eagle Rock unitholders:  Eagle Rock unitholders of record (or their authorized representatives) and Eagle Rock’s invited guests may attend the Eagle Rock special meeting. Unitholders whose shares are held in “street name” by a broker, bank or other nominee should bring with them a copy of a brokerage statement reflecting unit ownership as of the record date. All attendees should be prepared to present government-issued photo identification (such as a driver’s license or passport) for admittance.

Eagle Rock unitholders:  Yes, your vote is very important. If you do not submit a proxy or vote in person at the Eagle Rock special meeting, it will be more difficult for Eagle Rock to obtain the necessary quorum to hold the Eagle Rock special meeting. In addition, an abstention will have the same effect as a vote cast “AGAINST” approval of the merger agreement and the transactions contemplated thereby. If you hold your units through a broker, bank or other nominee, your broker, bank or other nominee will not be able to cast a vote on such approval without instructions from you. Not giving your broker instruction will have the same effect as a vote against the proposal to approve the merger agreement. The Eagle Rock Board recommends that you vote “FOR” the approval of the merger agreement and the transactions contemplated thereby.

Eagle Rock unitholders:  Yes. If you are a unitholder of record, you may revoke or change your proxy at any time before the Eagle Rock Telephone/Internet deadline or before the polls close at the Eagle Rock special meeting by:

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Eagle Rock unitholders:  The record date for the Eagle Rock special meeting is earlier than the date of the Eagle Rock special meeting and the date that the transactions contemplated by the merger agreement are expected to be completed. If you sell or otherwise transfer your Eagle Rock common units after the record date but before the date of the Eagle Rock special meeting, you will retain your right to vote at the Eagle Rock special meeting. However, you will not have the right to receive the merger consideration to be received by Eagle Rock’s unitholders in the merger. In order to receive the merger consideration, you must hold your units through completion of the merger.

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However, no assurance can be given as to when, or if, the merger will occur.

A proxy statement/prospectus will be mailed to unitholders of LRE in connection with the LRE merger. The LRE merger is a transaction separate and apart from the merger, and the completion of the LRE merger is not a condition to the completion of the merger, and the completion of the merger is not a condition to the completion of the LRE merger.

Please read “Risk Factors — Risk Factors Relating to the Merger” and “Material U.S. Federal Income Tax Consequences of the Merger — Tax Consequences of the Merger to Eagle Rock Common Unitholders.”

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At the effective time of the merger, Eagle Rock will be treated as a terminated partnership under Section 708 of the Code. Therefore, as a result of the merger, Eagle Rock’s taxable year will end as of the date of the merger, and Eagle Rock will be required to file a final U.S. federal income tax return for the taxable year ending on the date the merger is effective. Eagle Rock expects to furnish a Schedule K-1 to each Eagle Rock unitholder, and Vanguard expects to furnish a Schedule K-1 to each Vanguard unitholder, within 90 days of the closing of Vanguard’s taxable year on December 31, 2015.

If you hold units through a broker, bank or other nominee, please instruct your broker, bank or other nominee to vote your units by following the instructions that the broker, bank or other nominee provides to you with these materials.

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Eagle Rock unitholders:  Eagle Rock unitholders should call Morrow & Co., LLC (“Morrow”), Eagle Rock’s proxy solicitor, toll-free at (877) 757-5405 (banks and brokers call at (203) 658-9400) with any questions about the merger or the Eagle Rock special meeting, or to obtain additional copies of this joint proxy statement/prospectus, proxy cards or voting instruction forms. Eagle Rock unitholders can additionally contact Eagle Rock’s Investor Relations office by calling (281) 408-1203 or emailing info@eaglerockenergy.com.

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SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus. You are urged to read carefully the entire joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the merger agreement, the merger and the other matters being considered at the Vanguard annual meeting and the Eagle Rock special meeting. See “Where You Can Find More Information.” Each item in this summary refers to the page of this joint proxy statement/prospectus on which that subject is discussed in more detail.

The Parties (See page 64)

Vanguard Natural Resources, LLC (“Vanguard”) is a Delaware limited liability company with common units traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “VNR.” Vanguard is an independent energy company focused on the acquisition, exploitation and development of mature, long-lived oil and natural gas properties in the United States. Vanguard’s properties and oil and natural gas reserves are located primarily in nine operating basins in Wyoming, Colorado, Texas, New Mexico, Mississippi, Montana, Arkansas, Oklahoma and North Dakota. Vanguard’s principal executive offices are located at 5847 San Felipe, Suite 3000, Houston, Texas 77057, and its telephone number is (832) 327-2255.

Eagle Rock Energy Partners, L.P. (“Eagle Rock”) is a Delaware limited partnership formed in May 2006, with common units listed and traded on the NASDAQ under the symbol “EROC.” Eagle Rock is engaged in (i) the exploitation, development, and production of oil and natural gas properties and (ii) ancillary gathering, compressing, treating, processing and marketing services with respect to its production of natural gas, natural gas liquids, condensate and crude oil. Eagle Rock’s interests include operated and non-operated wells located in: (a) the Mid-Continent, which includes areas in Oklahoma, Arkansas and the Texas Panhandle; (b) Alabama, which also includes one treating facility and one natural gas processing plant and related gathering system; (c) the Permian, which includes areas in West Texas; and (d) East Texas, South Texas and Mississippi. Eagle Rock Energy GP, L.P., a Delaware limited partnership (“Eagle Rock GP”), is the general partner of Eagle Rock, and Eagle Rock Energy G&P, LLC, a Delaware limited liability company (“Eagle Rock G&P”), is the general partner of Eagle Rock GP. Eagle Rock’s principal executive offices are located at 1415 Louisiana Street, Suite 2700, Houston, Texas 77002, and its telephone number is (281) 408-1200.

Talon Merger Sub, LLC (“Merger Sub”) is a Delaware limited liability company and an indirect wholly owned subsidiary of Vanguard. Merger Sub was created for purposes of the merger and has not carried on any activities to date, other than activities incidental to its formation or undertaken in connection with the transactions contemplated by the merger agreement.

The Merger (See page 84)

Subject to the terms and conditions of the merger agreement and in accordance with Delaware law, the merger agreement provides for the merger of Merger Sub with and into Eagle Rock, with Eagle Rock continuing as the surviving entity and as a wholly owned indirect subsidiary of Vanguard.

Merger Consideration (See page 148)

The merger agreement provides that, at the effective time of the merger (the “effective time”), each Eagle Rock common unit issued and outstanding immediately prior to the effective time will be converted into the right to receive 0.185 Vanguard common units. Any Eagle Rock common units that are owned by Eagle Rock or Vanguard or any of their respective subsidiaries at the effective time will be cancelled and cease to exist, without any conversion or payment of consideration in respect thereof.

Treatment of Equity Awards (See page 148)

Under the merger agreement, each award of Eagle Rock restricted units that is outstanding immediately prior to the effective time will, at the effective time, be converted into a new award of restricted units based on Vanguard common units. With respect to any Eagle Rock restricted unit that is a performance unit, the performance period shall end and be calculated by Eagle Rock immediately prior to the effective time and in

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accordance with the terms of the applicable award agreement, subject to the good faith review of Vanguard. Each award of Eagle Rock restricted units being converted into a number of Vanguard restricted units will be converted by multiplying the number of Eagle Rock restricted units by the 0.185 exchange ratio and rounding down to the nearest whole Vanguard restricted unit. Certain holders of Eagle Rock restricted units will be entitled to accelerated vesting, or subject to forfeiture, of such restricted units, as more particularly set forth in the merger agreement.

Vanguard Annual Unitholder Meeting; Unitholders Entitled to Vote; Vote Required (See page 66)

Meeting.  The Vanguard annual meeting will be held at 5847 San Felipe, Suite 3000, Houston, Texas 77057 on October 5, 2015 at 10:00 a.m., local time. At the Vanguard annual meeting, Vanguard common unitholders and class B unitholders will be asked to vote on the following proposals: 

Merger-Related Proposal

Annual Meeting Proposals

Record Date.  Only Vanguard common unitholders and class B unitholders of record at the close of business on August 6, 2015, the record date for the determination of holders entitled to notice of and to vote at the Vanguard annual meeting will be entitled to receive notice of and to vote at the Vanguard annual meeting. As of the close of business on the record date of August 6, 2015, there were 86,604,907 Vanguard common units outstanding and entitled to be voted at the meeting and 420,000 Vanguard class B units outstanding and entitled to be voted at the meeting. Each holder of Vanguard common units or class B units is entitled to one vote for each Vanguard common unit or class B unit held by it as of the record date.

Required Vote.

Merger-Related Proposal

The proposal to approve the Vanguard common unit issuance requires the affirmative vote of the holders of a majority of the outstanding Vanguard common units and class B units, voting together as a single class, present in person or represented by proxy, entitled to vote on the proposal and actually voting at the annual meeting. Accordingly, a Vanguard unitholder’s failure to submit a proxy card or to vote in person at the Vanguard annual meeting or an abstention from voting, or the failure of a broker, bank or other nominee to vote Vanguard units it holds on behalf of a Vanguard unitholder, will not count as a vote cast “FOR” or “AGAINST” approval of the Vanguard common unit issuance.

VANGUARD CANNOT COMPLETE THE MERGER UNLESS ITS UNITHOLDERS APPROVE THE VANGUARD COMMON UNIT ISSUANCE.

The Chairman of the Vanguard Board, or the chief executive officer of Vanguard if acting as chairman of the annual meeting, may adjourn the meeting for any reason, including for purposes of soliciting additional votes in favor of the Vanguard common unit issuance, subject to compliance with the merger agreement.

Annual Meeting Proposals

To elect a particular director nominee, holders, as of the record date of the annual meeting, of a plurality of the outstanding Vanguard common units and class B units, voting together as a single class, present in person or represented by proxy, entitled to vote on the proposal and actually voting at the annual meeting, must vote in favor of such director. Accordingly, a Vanguard unitholder’s failure to vote, an abstention from voting or the failure of a Vanguard unitholder who holds his or her units in “street name” through a broker, bank or other nominee to give voting instructions to such broker, bank or other nominee will not count as a vote cast “FOR” or “AGAINST” approval of the election of a particular director nominee.

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To ratify BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015, the holders, as of the record date of the annual meeting, of a majority of the outstanding Vanguard common units and class B units, voting together as a single class, present in person or represented by proxy, entitled to vote on the proposal and actually voting at the annual meeting, must vote to approve the ratification. Accordingly, a Vanguard unitholder’s failure to vote or an abstention from voting will not count as a vote cast “FOR” or “AGAINST” the ratification of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015.

Unit Ownership of and Voting by Vanguard’s Directors and Executive Officers.  At the close of business on the record date for the Vanguard annual meeting, Vanguard’s directors and executive officers and their affiliates beneficially owned and had the right to vote 705,387 Vanguard common units and 415,000 class B units at the Vanguard annual meeting, which together represent approximately 1.29% of the Vanguard common units and class B units entitled to be voted at the Vanguard annual meeting. It is expected that Vanguard’s directors and executive officers will vote their Vanguard common units and class B units “FOR” the Vanguard common unit issuance, “FOR” each of the director nominees and “FOR” the ratification of BDO USA, LLP as the independent auditor of Vanguard for the fiscal year ending December 31, 2015, although none of them has entered into any agreement requiring them to do so.

Eagle Rock Special Unitholder Meeting; Unitholders Entitled to Vote; Vote Required (See page 77) 

Meeting.  The Eagle Rock special meeting will be held at 1415 Louisiana Street, Suite 3900, Houston, TX 77002 on October 5, 2015 at 10:00 a.m., local time. At the Eagle Rock special meeting, Eagle Rock unitholders will be asked to vote on the following proposals:

Record Date.  Only Eagle Rock unitholders of record at the close of business on August 6, 2015, the record date for the determination of holders entitled to notice of and to vote at the Eagle Rock special meeting will be entitled to receive notice of and to vote at the Eagle Rock special meeting. As of the close of business on the record date of August 6, 2015, there were 152,986,718 Eagle Rock common units outstanding and entitled to be voted at the meeting held by approximately 100 holders of record. Each holder of Eagle Rock common units is entitled to one vote for each unit owned as of the record date.

Required Vote.  The proposal to approve the merger agreement and the transactions contemplated thereby requires the affirmative vote of the holders, as of the record date of the special meeting, of a majority of the outstanding Eagle Rock common units. Eagle Rock cannot complete the merger unless its unitholders approve the merger agreement and the transactions contemplated thereby. In connection with the execution of the merger agreement on May 21, 2015, Vanguard entered into a voting and support agreement (the “support agreement”) with Natural Gas Partners VIII, L.P. (“NGP VIII”) and certain of its affiliates (collectively, the “NGP Parties”), and, solely with respect to the waiver of certain provisions of an existing voting agreement as well as the termination and other miscellaneous provisions of the support agreement, Eagle Rock and Eagle Rock GP, pursuant to which the NGP Parties have agreed, subject to the terms of the Voting Agreement, to vote all of their Eagle Rock common units in favor of the approval of the merger agreement and the transactions contemplated thereby. Collectively, the NGP Parties hold Eagle Rock common units representing approximately 34.9% of the votes of Eagle Rock’s outstanding common units as of August 27, 2015.

Because approval of the merger agreement and the transactions contemplated thereby is based on the affirmative vote of the holders of a majority of the outstanding Eagle Rock common units, an Eagle Rock unitholder’s failure to vote, an abstention from voting or the failure of an Eagle Rock unitholder who holds his or her units in “street name” through a broker, bank or other nominee to give voting instructions to such broker, bank or other nominee will have the same effect as a vote cast “AGAINST” approval of the merger agreement and the transactions contemplated thereby.

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To approve (on an advisory, non-binding basis) the proposal regarding the merger-related compensation payments that, pursuant to existing contractual arrangements, may become payable to Eagle Rock’s named executive officers in connection with the merger, the holders, as of the record date of the special meeting, of a majority of the outstanding Eagle Rock common units that are present or represented by proxy at the special meeting and entitled to vote on the proposal must vote in favor of such proposal. Accordingly, abstentions will have the same effect as votes cast “AGAINST” approval.

Unit Ownership of and Voting by Eagle Rock G&P’s Directors and Executive Officers.  At the close of business on the record date for the Eagle Rock special meeting, the directors and executive officers of Eagle Rock G&P beneficially owned and had the right to vote 3,197,713 Eagle Rock common units at the Eagle Rock special meeting, which represents approximately 2.1% of the Eagle Rock common units entitled to be voted at the Eagle Rock special meeting. It is expected that Eagle Rock G&P’s directors and executive officers will vote their units “FOR” the approval of the merger agreement and the transactions contemplated thereby, although none of them has entered into any agreement requiring them to do so.

Eagle Rock Unitholder Proposals.  Ownership of Eagle Rock common units does not entitle Eagle Rock common unitholders to make proposals at the Eagle Rock special meeting. Under the Eagle Rock partnership agreement, only its general partner can make a proposal at the special meeting.

Recommendation of the Vanguard Board and Its Reasons for the Merger (See page 99)

The Vanguard Board has unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger and the Vanguard common unit issuance, are advisable to and in the best interests of Vanguard and its unitholders. Accordingly, the Vanguard Board unanimously approved the merger agreement and recommends that the Vanguard common unitholders and class B unitholders vote “FOR” the Vanguard common unit issuance and the other proposals set forth in the notice of meeting.

In the course of reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement, including the Vanguard common unit issuance, the Vanguard Board considered a number of factors in its deliberations. For a more complete discussion of these factors, see “The Merger —  Recommendation of the Vanguard Board and Its Reasons for the Merger.”

Recommendation of the Eagle Rock Board and Its Reasons for the Merger (See page 109)

The Eagle Rock Board has unanimously determined that the merger agreement is advisable to and in the best interests of Eagle Rock and its unitholders and approved the merger agreement and the transactions contemplated by the merger agreement. The Eagle Rock Board recommends that Eagle Rock unitholders vote “FOR” approval of the merger agreement and the transactions contemplated thereby.

In the course of reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement, the Eagle Rock Board considered a number of factors in its deliberations. For a more complete discussion of these factors, see “The Merger — Recommendation of the Eagle Rock Board and Its Reasons for the Merger.”

Voting and Support Agreement (See page 126)

In connection with the execution of the merger agreement on May 21, 2015, Vanguard entered into the support agreement with the NGP Parties, and, solely with respect to the waiver of certain provisions of an existing voting agreement as well as the termination and other miscellaneous provisions of the support agreement, Eagle Rock and Eagle Rock GP. Collectively, the NGP Parties hold units representing approximately 34.9% of the votes of Eagle Rock’s outstanding common units as of August 27, 2015.

In accordance with the support agreement, the NGP Parties have agreed, subject to the terms of the support agreement, to vote or cause to be voted all of their Eagle Rock common units in favor of the merger and the approval of the merger agreement and the transactions contemplated thereby and against alternative proposals or other proposals made in opposition to approval of the merger agreement and other actions or transactions which might materially impede or interfere with the merger or the other transactions contemplated by the merger agreement. The NGP Parties also agreed to provide Vanguard with an irrevocable proxy over all

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of their Eagle Rock common units, which will empower and require Vanguard, subject to the terms of the support agreement, to vote those units in favor of the merger and the other transactions contemplated thereby on behalf of the NGP Parties. The foregoing obligations will terminate upon the earliest to occur of (i) the earlier of (a) the consummation of the merger or (b) the termination of the merger agreement pursuant to and in compliance with its terms, (ii) the effective date of any waiver, amendment or other modification to the merger agreement that is materially adverse to the NGP Parties, and (iii) a partnership change in recommendation (defined below) regarding the merger.

The NGP Parties have also agreed to certain restrictions under the support agreement, including but not limited to: (i) a restriction on transferring more than 15% of their Eagle Rock common units prior to the earlier of (a) the consummation of the merger and (b) the termination of the merger agreement pursuant to and in compliance with its terms, and (ii) a restriction on soliciting or encouraging alternative proposals. Furthermore, the NGP Parties agreed to promptly notify Vanguard of any alternative proposal that they receive and to keep Vanguard reasonably informed on the material developments of any such alternative proposals. For a period beginning at the effective time of the merger and continuing for a period of 90 days thereafter, the NGP Parties have also agreed not to sell, contract to sell, transfer or otherwise dispose of any Vanguard common units (or any security exercisable or exchangeable for Vanguard common units) received in the transactions contemplated by the merger agreement, provided that, on each trading day during such period, the NGP Parties may sell, contract to sell, transfer or otherwise dispose of an aggregate number of Vanguard common units (or any security exercisable or exchangeable for Vanguard common units), on a daily basis, not to exceed 10% of the average daily trading volume of Vanguard common units during the four weeks immediately prior to the first day of the calendar month in which such transaction occurs.

For a more complete discussion of the support agreement, see “The Merger — Voting and Support Agreement.”

Registration Rights Agreement (See page 128)

In connection with the execution of the merger agreement on May 21, 2015, Vanguard entered into a registration rights agreement (the “registration rights agreement”) with the NGP Parties. Pursuant to the registration rights agreement, among other things, (i) no later than the 14^th day following the closing date of the merger, Vanguard will file with the SEC either (a) a shelf registration statement with respect to the public resale of the Vanguard common units received by the NGP Parties as consideration in the merger or (b) a post-effective amendment to Vanguard’s existing automatic shelf registration statement on Form S-3, (ii) the NGP Parties will have the right to participate in future underwritten public offerings of Vanguard common units and (iii) subject to certain conditions, Vanguard will be obligated to initiate an underwritten offering of the Vanguard common units received by the NGP Parties as consideration in the merger. For a more complete discussion of the registration rights agreement, see “The Merger — Registration Rights Agreement.”

Opinion of the Financial Advisor to Vanguard (See page 100)

On May 21, 2015, Wells Fargo Securities, LLC (“Wells Fargo Securities”) rendered its oral opinion to the Vanguard Board (which was confirmed in writing by delivery of Wells Fargo Securities’ written opinion addressed to the Vanguard Board dated May 21, 2015), as to, as of May 21, 2015, the fairness, from a financial point of view, to Vanguard of the exchange ratio in the merger pursuant to the merger agreement.

Wells Fargo Securities’ opinion was for the information of the Vanguard Board (in its capacity as such) in connection with its evaluation of the merger. Wells Fargo Securities’ opinion only addressed the fairness, from a financial point of view, to Vanguard of the exchange ratio in the merger pursuant to the merger agreement and did not address any other terms, aspects or implications of the merger or any agreements, arrangements or understandings entered into in connection therewith or otherwise. The summary of Wells Fargo Securities’ opinion in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex C to this joint proxy statement/prospectus and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Wells Fargo Securities in connection with the preparation of its opinion. However, neither Wells Fargo Securities’ opinion nor the summary of its opinion and the related analyses set forth in this joint proxy statement/prospectus are

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intended to be, and do not constitute, a recommendation as to or otherwise address how the members of the Vanguard Board, the holders of the Vanguard common units or class B units or any other person should vote or act in respect to the merger or any related matter.

Opinion of the Financial Advisor to Eagle Rock (See page 114)

On May 21, 2015, at a meeting of the Eagle Rock Board, Evercore Group L.L.C. (“Evercore”) rendered its oral opinion, subsequently confirmed by delivery of a written opinion on May 21, 2015, that, as of May 21, 2015 and based upon and subject to the factors, procedures, assumptions, qualifications and limitations set forth in its opinion, the exchange ratio was fair, from a financial point of view, to the holders of each outstanding Eagle Rock common unit (other than those Eagle Rock common units held by Eagle Rock, Vanguard or their respective wholly owned subsidiaries).

Evercore’s opinion was addressed to, and provided for the information and benefit of, the Eagle Rock Board (in its capacity as such) in connection with its evaluation of whether the exchange ratio was fair, from a financial point of view, to the holders of each outstanding Eagle Rock common unit (other than those Eagle Rock common units held by Eagle Rock, Vanguard or their respective wholly owned subsidiaries), and did not address any other aspects or implications of the proposed merger. Furthermore, Evercore’s opinion did not constitute a recommendation to the Eagle Rock Board or to any other persons in respect of the proposed merger, including as to how any holder of Eagle Rock common units should act or vote in respect of the merger. The full text of the written opinion of Evercore, dated as of May 21, 2015, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex D to this joint proxy statement/prospectus and is incorporated by reference in its entirety into this joint proxy statement/prospectus. You are urged to read Evercore’s opinion carefully and in its entirety.

Ownership of Vanguard After the Merger (See page 145)

Vanguard will issue approximately 28.75 million Vanguard common units to former Eagle Rock unitholders pursuant to the transactions contemplated by the merger agreement, and will issue approximately 15.45 million Vanguard common units to former LRE unitholders and the former members of LRE GP if the transactions contemplated by the LRE merger agreement (the “LRE Transactions”) are consummated. Further, the number of Vanguard common units outstanding will increase after the date of this joint proxy statement/prospectus if Vanguard sells additional common units to the public.

If the LRE Transactions are consummated, based on the number of Vanguard common units outstanding as of August 27, 2015, immediately following the consummation of both the merger and the LRE Transactions, Vanguard expects to have approximately 130.80 million common units outstanding. Under this scenario, Eagle Rock unitholders would be expected to hold approximately 22.0% of the aggregate number of Vanguard common units outstanding immediately after the completion of the merger and the LRE merger.

If, however, the LRE Transactions are not consummated, based on the number of Vanguard common units outstanding as of August 27, 2015, immediately following the consummation of the merger, Vanguard expects to have approximately 115.35 million common units outstanding. Under this scenario, Eagle Rock unitholders would be expected to hold approximately 24.9% of the aggregate number of Vanguard common units outstanding immediately after the completion of the merger.

Interests of Directors and Executive Officers of Eagle Rock G&P in the Merger (See page 136)

Eagle Rock G&P’s directors and executive officers have financial interests in the merger that are different from, or in addition to, the interests of the Eagle Rock unitholders generally. The members of the Eagle Rock Board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending to Eagle Rock’s unitholders that the merger agreement be approved.

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These interests include:

Risks Relating to the Merger and Ownership of Vanguard Common Units (See page 48)

Eagle Rock unitholders should consider carefully all the risk factors together with all of the other information contained in or incorporated by reference in this joint proxy statement/prospectus before deciding how to vote. Risks relating to the merger and ownership of Vanguard common units are described in the section titled “Risk Factors.” Some of these risks include, but are not limited to, those described below:

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Material U.S. Federal Income Tax Consequences of the Merger (See page 204)

Tax matters associated with the merger are complicated. The U.S. federal income tax consequences of the merger to an Eagle Rock unitholder will depend, in part, on such unitholder’s own personal tax situation. The tax discussions contained herein focus on the U.S. federal income tax consequences generally applicable to individuals who are residents or citizens of the United States that hold their Eagle Rock units as capital assets and acquired their Eagle Rock units in exchange for cash, and these discussions have only limited application to other unitholders, including those subject to special tax treatment. Eagle Rock unitholders are urged to consult their tax advisors for a full understanding of the U.S. federal, state, local and foreign tax consequences of the merger that will be applicable to them.

In connection with the merger, Eagle Rock expects to receive an opinion from Vinson & Elkins L.L.P. (“Vinson & Elkins”) to the effect that (i) except to the extent that any cash received in lieu of fractional common units of Vanguard is treated as part of a sale or is otherwise taxable, Eagle Rock will not recognize any income or gain as a result of the merger other than any gain resulting from any decrease in partnership liabilities pursuant to Section 752 of the Code; (ii) except to the extent that any cash received in lieu of fractional common units of Vanguard is treated as part of a sale or is otherwise taxable, a holder of Eagle Rock common units who acquired his units in exchange for cash will not recognize any income or gain as a result of the merger other than any gain resulting from any actual or constructive distribution of cash, including as a result of any decrease in partnership liabilities pursuant to Section 752 of the Code; and (iii) at least 90% of the gross income of Eagle Rock for the most recent four complete calendar quarters ending before the Closing Date for which the necessary financial information is available is from sources treated as “qualifying income” within the meaning of Section 7704(d) of the Code.

In connection with the merger, Vanguard expects to receive an opinion from Paul Hastings LLP (“Paul Hastings”) to the effect that (i) Vanguard will not recognize any income or gain as a result of the merger other than any gain resulting from any decrease in partnership liabilities pursuant to Section 752 of the Code; (ii) a holder of Vanguard common units will not recognize any gain or loss as a result of the merger other than any gain resulting from any decrease in partnership liabilities pursuant to Section 752 of the Code; and (iii) at least 90% of the combined gross income of each of Vanguard and Eagle Rock for the most recent four complete calendar quarters ending before the Closing Date for which the necessary financial information is available is from sources treated as “qualifying income” within the meaning of Section 7704(d) of the Code.

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Opinions of counsel, however, are subject to certain limitations and are not binding on the Internal Revenue Service (“IRS”) and no assurance can be given that the IRS could not successfully assert a contrary position to the position of the opinions of counsel regarding the merger. In addition, such opinions will be based upon certain factual assumptions, representations, warranties and covenants made by the officers of Vanguard, Eagle Rock, Eagle Rock G&P and their respective affiliates. Please read “Material U.S. Federal Income Tax Consequences of the Merger” for a more complete discussion of the U.S. federal income tax consequences of the merger.

Accounting Treatment of the Merger (See page 144)

In accordance with accounting principles generally accepted in the United States (“GAAP”) and in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 805 — Business Combinations, Vanguard will account for the merger as an acquisition of a business.

Listing of Vanguard Common Units; Delisting and Deregistration of Eagle Rock Common Units (See page 145)

Vanguard common units are currently listed on the NASDAQ under the symbol “VNR.” It is a condition to closing that the Vanguard common units to be issued in the transactions contemplated by the merger agreement to Eagle Rock unitholders be approved for listing on the NASDAQ, subject to official notice of issuance.

Eagle Rock common units are currently listed on the NASDAQ under the ticker symbol “EROC.” If the merger is completed, Eagle Rock common units will cease to be listed on the NASDAQ and will be deregistered under the Exchange Act.

No Appraisal Rights (See page 144)

Neither Vanguard unitholders nor Eagle Rock unitholders are entitled to appraisal rights under applicable law or contractual appraisal rights under Vanguard’s limited liability company agreement, Eagle Rock’s partnership agreement or the merger agreement.

Conditions to Consummation of the Merger (See page 149)

Vanguard and Eagle Rock currently expect to complete the transactions contemplated by the merger agreement in October 2015, subject to receipt of required Vanguard unitholder and Eagle Rock unitholder approvals and to the satisfaction or waiver of the other conditions to the transactions contemplated by the merger agreement described below.

As more fully described in this joint proxy statement/prospectus, each party’s obligation to complete the transactions contemplated by the merger agreement depends on a number of customary closing conditions being satisfied or, where legally permissible, waived, including the following:

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The obligation of Vanguard to consummate the merger is further conditioned upon satisfaction (or waiver by Vanguard) of the following additional conditions:

The obligation of Eagle Rock to consummate the merger is further conditioned upon the satisfaction (or waiver by Eagle Rock) of the following additional conditions:

Regulatory Approvals (See page 145)

Vanguard and Eagle Rock are not required to file notifications with the Federal Trade Commission and the Antitrust Division of the Department of Justice or observe a mandatory pre-merger waiting period before completing the merger under the Hart-Scott-Rodino Act (the “HSR Act”). Vanguard and Eagle Rock cannot assure you, however, that other government agencies or private parties will not initiate actions to challenge the merger before or after it is completed.

No Solicitation by Eagle Rock of Alternative Proposals (See page 154)

Eagle Rock has agreed that it will not, and will cause its subsidiaries and use reasonable best efforts to cause its and its subsidiaries’ directors, officers, employees, investment bankers, financial advisors, attorneys, accountants, agents and other representatives not to, directly or indirectly:

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In addition, the merger agreement requires Eagle Rock and its subsidiaries to cease and cause to be terminated any discussions or negotiations with any persons conducted prior to the execution of the merger agreement regarding an alternative proposal.

Notwithstanding these restrictions, at any time prior to a majority of Eagle Rock unitholders voting in favor of approving the merger agreement, Eagle Rock may, subject to certain notice and other requirements, furnish information, including confidential information, with respect to it and its subsidiaries to, and participate in discussions or negotiations with, any third party that makes a written alternative proposal that was not solicited after the execution of the merger agreement and that did not result from a material breach of the no solicitation restrictions described above and that the Eagle Rock Board believes is bona fide, and (after consultation with its financial advisors and outside legal counsel) that the Eagle Rock Board determines in good faith constitutes or would reasonably be likely to lead to or result in a superior proposal (as defined under “The Merger Agreement — Eagle Rock Unitholder Approval”.

Eagle Rock will promptly, and in any event within 24 hours after receipt, (i) advise Vanguard in writing of any alternative proposal (and any changes thereto) and the material terms and conditions of any such alternative proposal, including the identity of the person making such alternative proposal and (ii) provide Vanguard with copies of all written proposals or draft agreements received by Eagle Rock or any representative of Eagle Rock setting forth the terms and conditions of, or otherwise relating to, such alternative proposal. Eagle Rock will keep Vanguard reasonably informed of all material developments with respect to any such alternative proposals, offers, inquiries or requests (and promptly (and in no event later than 24 hours after receipt) provide Vanguard with copies of any additional written proposals received by Eagle Rock or that Eagle Rock has delivered to any third party making an alternative proposal that relate to such alternative proposal) and of the status of any such discussions or negotiations.

Change in the Eagle Rock Board Recommendation (See page 155)

The merger agreement provides that the Eagle Rock Board will not (i) withdraw, modify or qualify, in a manner adverse to Vanguard, the recommendation of the Eagle Rock Board that Eagle Rock’s unitholders approve the merger agreement and the transactions contemplated thereby, including the merger, (ii) fail to include such recommendation in this joint proxy statement/prospectus or (iii) publicly approve or recommend, or publicly propose to approve or recommend, any alternative proposal. Eagle Rock taking or failing to take, as applicable, any of the actions described above is referred to as a “partnership change in recommendation.” The merger agreement also provides that the Eagle Rock Board will not: (i) approve, adopt or recommend, or publicly propose to approve, adopt or recommend, or allow Eagle Rock or any of its subsidiaries to execute or enter into (other than a confidentiality agreement permitted by the merger agreement), any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar contract or any tender or exchange offer providing for, with respect to, or in connection with any alternative proposal; (ii) fail to announce publicly within ten business days after a tender offer or exchange offer relating to the Eagle Rock common units has been commenced that the Eagle Rock Board recommends rejection of such tender offer or exchange offer and reaffirming the recommendation of the Eagle Rock Board that Eagle Rock’s unitholders approve the merger agreement and the transactions contemplated thereby, including the merger; or (iii) resolve, agree or publicly propose to, or permit Eagle Rock or any of its representatives to agree or publicly propose to, take any of the actions referred to in this paragraph.

Notwithstanding the foregoing instruction, subject to the satisfaction of specified conditions in the merger agreement described under “The Merger Agreement — Change in the Eagle Rock Board Recommendation,” the Eagle Rock Board may, at any time prior to obtaining the Eagle Rock unitholder approval, effect a partnership change in recommendation or terminate the merger agreement and pay the termination fee (as described below) in response to any bona fide alternative proposal that did not result from a material breach of the non-solicitation provisions of the merger agreement if the Eagle Rock Board determines, after consultation with its outside legal counsel and financial advisors, that such alternative proposal constitutes a

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superior proposal. In addition, notwithstanding the restrictions described in the immediately preceding paragraph, subject to the satisfaction of specified conditions in the merger agreement described under “The Merger Agreement — Change in the Eagle Rock Board Recommendation,” the Eagle Rock Board may, at any time prior to obtaining the Eagle Rock unitholder approval, effect a partnership change in recommendation in response to an intervening event if the Eagle Rock Board determines, after consultation with its outside legal counsel and financial advisors, that the failure to make such partnership change in recommendation is inconsistent with its duties under applicable Delaware law, the Eagle Rock partnership agreement or the Eagle Rock GP partnership agreement.

Termination of the Merger Agreement (See page 157)

The merger agreement may be terminated at any time prior to the closing as follows:

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Termination Fee (See page 158)

Following termination of the merger agreement under specified circumstances, including (i) termination by Vanguard prior to the adjournment of the Eagle Rock special meeting due to a partnership change in recommendation having occurred, (ii) termination by Eagle Rock in order to enter into a superior proposal or (iii) termination by either party under specified provisions after an alternative proposal was received by Eagle Rock and not withdrawn at the time of termination, and Eagle Rock enters into a definitive agreement with respect to such alternative proposal within 12 months after the date of the merger agreement and consummates such alternative proposal, Eagle Rock will be required to pay Vanguard a termination fee of $20,000,000. Under certain other specified circumstances, Eagle Rock will be required to pay Vanguard a termination fee of $10,000,000, which is one-half of the termination fee, reduced by expenses previously paid or reimbursed by Eagle Rock.

In no event will Eagle Rock be obligated to make more than one payment of the termination fee and, if Eagle Rock has previously paid any of Vanguard’s expenses in accordance with the merger agreement, the termination fee will be reduced by the amount of such expenses paid. In the event Eagle Rock pays the termination fee to Vanguard, Eagle Rock has no further liability to Vanguard of any kind in respect of the merger agreement and the transactions contemplated thereby.

The merger agreement provides that Vanguard will be required to pay a termination fee of $20,000,000 to Eagle Rock if after the final adjournment of the Vanguard annual meeting, the merger agreement is terminated by Eagle Rock or Vanguard due to Vanguard’s failure to obtain Vanguard unitholder approval of the Vanguard common unit issuance.

Expenses (See page 159)

Generally, all fees and expenses incurred in connection with the transactions contemplated by the merger agreement will be the obligation of the respective party incurring such fees and expenses, except that Vanguard and Eagle Rock will each pay one-half of the expenses incurred in connection with the filing, printing and mailing of this joint proxy statement/prospectus.

In addition, following a termination of the merger agreement in specified circumstances, the non-terminating party may be required to reimburse all of the reasonably documented out-of-pocket expenses incurred by the terminating party in connection with the merger agreement and the transactions contemplated thereby, up to a maximum amount of $2,317,700.

Comparison of Rights of Vanguard Common Unitholders and Eagle Rock Common Unitholders (See page 231)

Eagle Rock common unitholders will own Vanguard common units following the completion of the merger, and their rights associated with those Vanguard common units will be governed by the Vanguard limited liability company agreement, which differs in a number of respects from the Eagle Rock partnership agreement, and the Delaware Limited Liability Company Act (the “Delaware LLC Act”).

Litigation Relating to the Merger (See page 146)

On May 28, 2015 and June 10, 2015, alleged Eagle Rock unitholders (the “State Plaintiffs”) filed two derivative and class action lawsuits against Eagle Rock, Eagle Rock GP, Eagle Rock G&P, Vanguard, Merger Sub, and the members of the Eagle Rock Board (collectively, the “Defendants”). These lawsuits have been consolidated as Irving and Judith Braun v. Eagle Rock Energy GP, L.P. et al., Cause No. 2015-30441, in the District Court of Harris County, Texas, 125th Judicial District (the “State Lawsuits”). On June 1, 2015, another alleged Eagle Rock unitholder (the “Federal Plaintiff” and, together with the State Plaintiffs, the “Plaintiffs”) filed a class action lawsuit against the Defendants. This lawsuit is styled Pieter Heydenrych v. Eagle Rock Energy Partners, L.P. et al., Cause No. 4:15-cv-01470, in the United States District Court for the Southern District of Texas, Houston Division (together with the State Lawsuits, the “Lawsuits”).

The Plaintiffs allege a variety of causes of action challenging the merger, including that (i) the members of the Eagle Rock Board have allegedly breached duties and the implied covenant of good faith and fair dealing in connection with the merger, and (ii) Eagle Rock GP, Eagle Rock G&P, Vanguard, and Merger Sub have allegedly aided and abetted in these alleged breaches. The Federal Plaintiff also alleges that the

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Defendants have violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. In general, the Plaintiffs allege that the merger (a) provides inadequate consideration to Eagle Rock unitholders, (b) is not subject to minority unitholder approval due to the support agreement and the absence of a majority-of-the-minority vote requirement, (c) contains contractual terms (e.g., the no-solicitation, matching rights, and termination fee provisions) that will dissuade other potential merger partners from making alternative proposals, and (d) does not include a collar to protect Eagle Rock unitholders against declines in Vanguard’s unit price. The Plaintiffs also allege, in general, that the registration statement fails, among other things, to disclose allegedly material details concerning (i) Eagle Rock’s and Vanguard’s financial and operational projections, (ii) the analysis underlying the opinion of the financial advisor to Eagle Rock, (iii) the analysis underlying the opinion of the financial advisor to Vanguard and (iv) the background of the merger.

Based on these allegations, the Plaintiffs seek to enjoin Eagle Rock from proceeding with or consummating the merger. To the extent that the merger is consummated before injunctive relief is granted, the Plaintiffs seek to have the merger rescinded. The Federal Plaintiff also seeks damages. The Plaintiffs also seek attorneys’ fees.

The Defendants’ date to answer, move to dismiss, or otherwise respond to the Federal Lawsuit has not yet been set. The Defendants have answered the State Lawsuits, denying the allegations therein. Eagle Rock cannot predict the outcome of the Lawsuits or any others that might be filed subsequent to the date of the filing of this joint proxy statement/prospectus; nor can Eagle Rock predict the amount of time and expense that will be required to resolve the Lawsuits. The Defendants believe the Lawsuits are without merit and intend to vigorously defend against them.

Litigation Relating to the LRE Merger

A putative class action was filed on June 3, 2015 in connection with the merger by a purported LRE unitholder (the “LRE Delaware State Plaintiff”) against LRE, LRE GP, the members of the LRE GP board of directors, Vanguard, Lighthouse Merger Sub and the other parties to the LRE merger agreement (the “LRE Defendants”). The lawsuit was styled Barry Miller v. LRR Energy, L.P. et al., Case No. 11087-VCG, in the Court of Chancery of the State of Delaware (the “LRE Delaware State Lawsuit”). On July 23, 2015, the LRE Delaware State Plaintiff voluntarily dismissed the LRE Delaware State Lawsuit without prejudice.

On July 10, 2015 and July 13, 2015, two additional purported LRE unitholders (the “LRE Texas Federal Plaintiffs”) filed putative class action lawsuits against the LRE Defendants. These lawsuits were styled (a) Christopher Tiberio v. Eric Mullins et al., Cause No. 2015-39864, in the District Court of Harris County, Texas, 334th Judicial District; and (b) Eddie Hammond v. Eric Mullins et al., Cause No. 2015-40154, in the District Court of Harris County, Texas, 295th Judicial District (the “LRE Texas State Lawsuits”). On July 28, 2015, the LRE Texas State Lawsuits were nonsuited without prejudice.

On July 14, 2015, another purported LRE unitholder (the “LRE Texas Federal Plaintiff”) filed a putative class action lawsuit against the LRE Defendants. This lawsuit was styled Ronald Krieger v. LRR Energy, L.P. et al., Civil Action No. 4:15-cv-2017, in the United States District Court for the Southern District of Texas, Houston Division (the “LRE Texas Federal Lawsuit”). On July 17, 2015, the LRE Texas Federal Plaintiff voluntarily dismissed the LRE Texas Federal Lawsuit without prejudice.

On August 18, 2015, another purported LRE unitholder (the “LRE Plaintiff”) filed a putative class action lawsuit against the members of the LRE GP board of directors, Vanguard, and Lighthouse Merger Sub (the “LRE Lawsuit Defendants”). This lawsuit is styled Robert Hurwitz v. Eric Mullins et al., Civil Action No. 1:15-cv-00711-UNA, in the United States District Court for the District of Delaware (the “LRE Lawsuit”).

The LRE Lawsuit alleges that the LRE Lawsuit Defendants violated Sections 14(a) and/or 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. In general, the LRE Plaintiff alleges that the proxy statement/prospectus filed in connection with the LRE merger fails, among other things, to disclose allegedly material details concerning (i) the background of the LRE merger, (ii) the financial analyses conducted by LRE’s and the LRE conflicts committee’s financial advisors in connection with the LRE merger, (iii) LRE’s and Vanguard’s financial and operational projections, and (iv) alleged conflicts of interest.

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The LRE Plaintiff seeks, among other relief, to enjoin the LRE merger, or rescind the LRE merger in the event it is consummated, and an award of attorneys’ fees and costs.

The LRE Plaintiff has not yet served the LRE Lawsuit Defendants, and the LRE Lawsuit Defendants’ date to answer, move to dismiss, or otherwise respond to the LRE Lawsuit has not yet been set.

Vanguard cannot predict the outcome of the LRE Lawsuit or any others that might be filed subsequent to the date of the filing of this joint proxy statement/prospectus; nor can Vanguard predict the amount of time and expense that will be required to resolve the LRE Lawsuit. The LRE Lawsuit Defendants believe the LRE Lawsuit is without merit and intend to vigorously defend against it.

The completion of the LRE merger is not a condition to the completion of the merger, and the completion of the merger is not a condition to the completion of the LRE merger.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF VANGUARD

The following summary historical consolidated data as of and for the years ended December 31, 2014, 2013, 2012, 2011 and 2010 are derived from Vanguard’s audited historical consolidated financial statements. The following selected historical consolidated financial data as of and for the six months ended June 30, 2015 and 2014 are derived from Vanguard’s unaudited condensed consolidated financial statements. In the opinion of Vanguard’s management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of Vanguard’s financial position at June 30, 2015, and its operating results and cash flows for the six months ended June 30, 2015 and 2014 have been included.

You should read the following historical consolidated financial data in conjunction with Vanguard’s Annual Report on Form 10-K for the year ended December 31, 2014 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, as well as Vanguard’s historical financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” which are incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”

		Six Months Ended June 30,								Year Ended December 31,(4)
		2015				2014				2014				2013				2012(5)				2011(6)				2010
		(in thousands, except per unit data)
Statement of Operations Data:
Revenues:
Oil sales		$	79,801			$	142,163			$	268,685			$	268,922			$	233,153			$	236,003			$	50,022
Natural gas sales			95,651				133,348				285,439				124,513				47,270				47,977				25,778
NGLs sales			19,283				38,748				70,489				49,813				29,933				28,862				9,557
Net gains (losses) on commodity derivative contracts(1)			38,233				(94,436	)			163,452				11,256				36,846				6,735				7,797
Total revenue			232,968				219,823				788,065				454,504				347,202				319,577				93,154
Costs and Expenses:
Production
Lease operating expenses			67,078				64,715				132,515				105,502				74,366				63,944				18,471
Production and other taxes			22,180				31,563				61,874				40,430				29,369				28,621				6,840
Depreciation, depletion, amortization and accretion			130,015				95,118				226,937				167,535				104,542				84,857				22,231
Impairment of oil and natural gas properties			865,975				—				234,434				—				247,722				—				—
Selling, general and administrative expenses(2)			18,193				15,902				30,839				25,942				22,466				19,779				10,134
Total costs and expenses			1,103,441				207,298				686,599				339,409				478,465				197,201				57,676
Income (Loss) from Operations:			(870,473	)			12,525				101,466				115,095				(131,263	)			122,376				35,478
Other Income (Expense):
Interest expense			(40,563	)			(32,808	)			(69,765	)			(61,148	)			(41,891	)			(28,994	)			(5,766	)
Net losses on interest rate derivative contracts			(1,484	)			(1,579	)			(1,933	)			(96	)			(6,992	)			(4,962	)			(2,148	)
Net gain (loss) on acquisitions of oil and natural gas properties			—				32,114				34,523				5,591				11,111				(367	)			(5,680	)
Other income			45				131				54				69				220				77				1
Total other expense			(42,002	)			(2,142	)			(37,121	)			(55,584	)			(37,552	)			(34,246	)			(13,593)

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		Six Months Ended June 30,								Year Ended December 31,(4)
		2015				2014				2014				2013				2012(5)				2011(6)				2010
		(in thousands, except per unit data)
Net Income (Loss)		$	(912,475	)		$	10,383			$	64,345			$	59,511			$	(168,815	)		$	88,130			$	21,885
Less: Net income attributable to non-controlling interest			—				—				—				—				—				(26,067	)			—
Net Income (Loss) Attributable to Vanguard Unitholders		$	(912,475	)		$	10,383			$	64,345			$	59,511			$	(168,815	)		$	62,063			$	21,885
Less: Distributions to Preferred unitholders			(13,380	)			(6,558	)			(18,197	)			(2,634	)			—				—				—
Net Income (Loss) Attributable to Common and Class B unitholders		$	(925,855	)		$	3,825			$	46,148			$	56,877			$	(168,815	)		$	62,063			$	21,885
Net Income (Loss) Per Common and Class B Unit:
Basic		$	(10.86	)		$	0.05			$	0.56			$	0.78			$	(3.11	)		$	1.95			$	1.00
Diluted		$	(10.86	)		$	0.05			$	0.55			$	0.77			$	(3.11	)		$	1.95			$	1.00
Distributions Declared Per Common and Class B Unit(3)		$	0.80			$	1.26			$	2.52			$	2.46			$	2.79			$	2.28			$	2.15
Weighted Average Common Units Outstanding:
Basic			84,816				79,865				81,611				72,644				53,777				31,370				21,500
Diluted			84,816				79,865				82,039				72,992				53,777				31,370				21,500
Weighted Average Class B Units Outstanding			420				420				420				420				420				420				420
Cash Flow Data:
Net cash provided by operating activities		$	164,715			$	154,927			$	339,752			$	260,965			$	204,490			$	176,332			$	71,577
Net cash used in investing activities		$	(57,486	)		$	(573,155	)		$	(1,446,202	)		$	(397,977	)		$	(839,244	)		$	(236,350	)		$	(429,994	)
Net cash provided by (used in) financing activities		$	(103,097	)		$	428,523			$	1,094,632			$	137,267			$	643,466			$	61,041			$	359,758
Other Financial Information:
Adjusted EBITDA attributable to Vanguard unitholders interest		$	175,918			$	187,552			$	421,445			$	309,745			$	230,512			$	164,603			$	80,396

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Non-GAAP Financial Measure

Adjusted EBITDA

Vanguard presents Adjusted EBITDA in addition to its reported net income (loss) attributable to Vanguard unitholders in accordance with GAAP. Adjusted EBITDA is a non-GAAP financial measure that is defined as net income (loss) attributable to Vanguard unitholders plus, for 2011, net income (loss) attributable to the non-controlling interest. The result is net income (loss) which includes the non-controlling interest for 2011. From this Vanguard adds or subtracts the following:

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Adjusted EBITDA is a significant performance metric used by Vanguard management as a tool to measure (prior to the establishment of any cash reserves by the Vanguard Board, debt service and capital expenditures) the cash distributions Vanguard could pay its unitholders. Specifically, this financial measure indicates to investors whether or not Vanguard is generating cash flow at a level that can sustain or support an increase in its monthly distribution rates. Adjusted EBITDA is also used as a quantitative standard by Vanguard’s management and by external users of its financial statements such as investors, research analysts and others to assess the financial performance of Vanguard’s assets without regard to financing methods, capital structure or historical cost basis; the ability of Vanguard’s assets to generate cash sufficient to pay interest costs and support its indebtedness; and Vanguard’s operating performance and return on capital as compared to those of other companies in its industry.

Vanguard’s Adjusted EBITDA should not be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Vanguard’s Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, Vanguard’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies. For example, Vanguard funds premiums paid for derivative contracts, acquisitions of oil and natural gas properties, including the assumption of derivative contracts related to these acquisitions and other capital expenditures primarily with proceeds from debt or equity offerings or with borrowings under Vanguard’s reserve-based credit facility. For the purposes of calculating Adjusted EBITDA, Vanguard consider the cost of premiums paid for derivatives and the fair value of derivative contracts acquired as part of a business combination as investments related to its underlying oil and natural gas properties; therefore, they are not deducted in arriving at Vanguard’s Adjusted EBITDA. Vanguard’s Consolidated Statements of Cash Flows, prepared in accordance with GAAP, present cash settlements on matured derivatives and the initial cash outflows of premiums paid to enter into derivative contracts as operating activities. When Vanguard assumes derivative contracts as part of a business combination, Vanguard allocates a part of the purchase price and assigns them a fair value at the closing date of the acquisition. The fair value of the derivative contracts acquired is recorded as a derivative asset or liability and presented as cash used in investing activities in Vanguard’s Consolidated Statements of Cash Flows. As the volumes associated with these derivative contracts, whether Vanguard entered into them or assumed them, are settled, the fair value is recognized in operating cash flows. Whether these cash settlements on derivatives are received or paid, they are reported as operating cash flows which may increase or decrease the amount Vanguard has available to fund distributions.

As noted above, for purposes of calculating Adjusted EBITDA, Vanguard considers both premiums paid for derivatives and the fair value of derivative contracts acquired as part of a business combination as investing activities. This is similar to the way the initial acquisition or development costs of Vanguard’s oil and natural gas properties are presented in its Consolidated Statements of Cash Flows; the initial cash outflows are presented as cash used in investing activities, while the cash flows generated from these assets are included in operating cash flows. The consideration of premiums paid for derivatives and the fair value of derivative contracts acquired as part of a business combination as investing activities for purposes of determining Vanguard’s Adjusted EBITDA differs from the presentation in its consolidated financial statements prepared in accordance with GAAP which (i) presents premiums paid for derivatives entered into as operating activities and (ii) the fair value of derivative contracts acquired as part of a business combination as investing activities.

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The following table presents a reconciliation of Vanguard’s consolidated net income (loss) to Adjusted EBITDA.

		Six Months Ended June 30,								Year Ended December 31,
		2015				2014				2014				2013				2012				2011(e)				2010(f)
		(in thousands)
Net income (loss) attributable to Vanguard unitholders		$	(912,475	)		$	10,383			$	64,345			$	59,511			$	(168,815	)		$	62,063			$	21,885
Net income attributable to non-controlling interest			—				—				—				—				—				26,067				—
Net income (loss)			(912,475	)			10,383				64,345				59,511				(168,815	)			88,130				21,885
Plus:
Interest expense			40,563				32,808				69,765				61,148				41,891				28,994				5,766
Depreciation, depletion, amortization and accretion			130,015				95,118				226,937				167,535				104,542				84,857				22,231
Impairment of oil and natural gas properties			865,975				—				234,434				—				247,722				—				—
Net (gains) losses on commodity derivative			(38,233	)			94,436				(163,452	)			(11,256	)			(36,846	)			(6,735	)			(7,797	)
Net cash settlements received on matured commodity derivative(a)(b)(c)			80,620				(19,380	)			10,187				30,905				39,102				18,720				25,887
Net losses on interest rate derivative contracts(d)			1,484				1,579				1,933				96				6,992				4,962				2,148
Net (gain) loss on acquisitions of oil and natural gas properties			—				(32,114	)			(34,523	)			(5,591	)			(11,111	)			367				5,680
Texas margin taxes			142				(281	)			(630	)			601				239				261				(12	)
Compensation related items			7,827				5,003				11,710				5,931				6,796				3,026				1,026
Transaction costs incurred on acquisitions and mergers			—				—				739				865				—				2,019				3,583
Less:
Interest income			—				—				—				—				—				—				(1	)
Adjusted EBITDA before non-controlling interest		$	175,918			$	187,552			$	421,445			$	309,745			$	230,512			$	224,601			$	80,396
Non-controlling interest attributable to adjustments above			—				—				—				—				—				(62,838	)			—
Administrative services fees eliminated in consolidation			—				—				—				—				—				2,840				—
Adjusted EBITDA attributable to Vanguard unitholders		$	175,918			$	187,552			$	421,445			$	309,745			$	230,512			$	164,603			$	80,396

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(a) Excludes premiums paid, whether at inception or deferred, for derivative contracts that settled during the period. Vanguard considers the cost of premiums paid for derivatives as an investment related to Vanguard’s underlying oil and natural gas properties.		$	2,567			$	—			$	—			$	220			$	11,641			$	11,346			$	1,950
(b) Excludes the fair value of derivative contracts acquired as part of prior period business combinations that apply to contracts settled during the period. Vanguard considers the amounts paid to sellers for derivative contracts assumed with business combinations a part of the purchase price of the underlying oil and natural gas properties.		$	20,281			$	10,864			$	21,306			$	30,200			$	26,505			$	169			$	1,995
(c) Excludes fair value of restructured derivative contracts.		$	(31,945	)			—				—				—				—				—				—
(d) Includes settlements paid on interest rate derivatives		$	1,980			$	2,005			$	4,035			$	3,888			$	2,515			$	2,874			$	1,799
(e) Results of operations from oil and natural gas properties acquired in the ENP Purchase through the date of the completion of the ENP Merger on December 1, 2011 were subject to a 53.4% non-controlling interest.
(f) As the ENP Purchase was completed on December 31, 2010, no results of operations were included for the year ended December 31, 2010.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF EAGLE ROCK

The following summary historical consolidated data as of and for the five fiscal years ended December 31, 2014. The historical consolidated financial data for the years ended December 31, 2014, 2013 and 2012 and the historical consolidated balance sheet data as of December 31, 2014 and 2013 have been derived from Eagle Rock’s audited historical consolidated financial statements contained in Eagle Rock’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which is incorporated into this joint proxy statement/prospectus by reference. The historical consolidated financial data for the years ended December 31, 2012 and 2011 and the historical consolidated balance sheet data as of December 31, 2012 and 2011 have been derived from Eagle Rock’s audited historical consolidated financial statements not included or incorporated by reference herein. The following selected historical consolidated financial data as of and for the six months ended June 30, 2015 and 2014 are derived from Eagle Rock’s unaudited condensed consolidated financial statements contained in Eagle Rock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, which is incorporated into this joint proxy statement/prospectus by reference. In the opinion of Eagle Rock’s management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of Eagle Rock’s financial position at June 30, 2015, and its operating results and cash flows for the six months ended June 30, 2015 and 2014 have been included.

You should read the following historical consolidated financial data in conjunction with Eagle Rock’s Annual Report on Form 10-K for the year ended December 31, 2014 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, as well as Eagle Rock’s historical financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”

		Six Months Ended June 30,								Year Ended December 31,
		2015				2014				2014				2013				2012				2011				2010
		($ in thousands, except distributions per unit)
Statement of Operations Data:
Sales to external customers		$	62,723			$	107,361			$	203,773			$	201,309			$	203,205			$	204,310			$	94,735
Commodity risk management gains (losses), net			11,065				(28,114	)			94,431				(3,937	)			28,110				37,269				(4,026	)
Total revenues			73,788				79,247				298,204				197,372				231,315				241,579				90,709
Operating and maintenance expense			22,836				22,405				43,670				41,426				41,391				32,287				24,007
Taxes other than income			2,726				7,387				12,925				12,928				15,343				15,436				8,764
General and administrative expense			22,395				25,295				47,193				53,131				50,990				42,525				34,512
Impairment expense			68,344				—				395,892				214,286				45,289				11,728				3,536
Depreciation, depletion and amortization			31,035				40,705				85,579				89,444				90,510				66,909				31,934
Operating (loss) income			(73,548	)			(16,545	)			(287,055	)			(213,843	)			(12,208	)			72,694				(12,044	)
Interest expense, net			(6,541	)			(10,563	)			16,981				19,893				21,003				22,246				31,861
Loss on short-term investments			(5,754	)			—				62,028				—				—				—				—
Other expense (income)			3,203				3				(8,294	)			30				28				149				(453	)
(Loss) income from continuing operations before income taxes			(82,640	)			(27,105	)			(357,770	)			(233,766	)			(33,239	)			50,299				(43,452	)
Income tax benefit			(1,521	)			(1,750	)			(5,403	)			(5,595	)			(1,093	)			(3,350	)			(2,885	)
(Loss) income from continuing operations			(81,119	)			(25,355	)			(352,367	)			(228,171	)			(32,146	)			53,649				(40,567	)
Discontinued operations, net of tax			(974	)			(36,249	)			212,460				(49,808	)			(118,456	)			19,483				35,218
Net (loss) income		$	(82,093	)		$	(61,604	)		$	(139,907	)		$	(277,979	)		$	(150,602	)		$	73,132			$	(5,349)

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		Six Months Ended June 30,								Year Ended December 31,
		2015				2014				2014				2013				2012				2011				2010
		($ in thousands, except distributions per unit)
(Loss) income from continuing operations per common unit – diluted		$	(0.54	)		$	(0.16	)		$	(2.25	)		$	(1.50	)		$	(0.26	)		$	0.45			$	(0.49	)
Balance Sheet Data (at period end):
Property, plant and equipment, net		$	438,867			$	859,895	(b)		$	487,988			$	824,451			$	982,784			$	956,347			$	351,594
Total assets		$	562,178			$	2,130,765			$	794,275			$	2,127,550			$	2,294,216			$	2,045,688			$	1,349,397
Long-term debt		$	144,781			$	380,712	(b)		$	263,343			$	757,480			$	659,117			$	509,193			$	530,000
Net equity		$	285,208			$	493,002			$	388,470			$	573,879			$	868,374			$	1,007,347			$	579,113
Cash Flow Data:
Net cash flows provided by (used in):
Operating activities		$	35,230			$	25,674			$	78,126			$	114,243			$	75,336			$	60,419			$	6,716
Investing activities		$	109,075			$	(63,789	)		$	(92,858	)		$	(149,868	)		$	(152,509	)		$	(297,264	)		$	141,310
Financing activities		$	(144,654	)		$	33,480			$	(555,358	)		$	69,723			$	165,471			$	(9,834	)		$	(175,446	)
Discontinued operations		$	(974	)		$	5,300			$	571,357			$	(34,047	)		$	(89,150	)		$	243,507			$	28,737
Other Financial Data:
Cash distributions per common unit (declared)		$	0.14			$	0.15			$	0.14			$	0.74			$	0.88			$	0.75			$	0.23
Adjusted EBITDA(a)		$	51,251			$	50,995			$	120,890			$	119,772			$	133,561			$	119,240			$	26,874

Non-GAAP Financial Measures

Eagle Rock includes in this joint proxy statement/prospectus Adjusted EBITDA and distributable cash flow, which are non-GAAP financial measures and which do not comply with GAAP. Eagle Rock provides reconciliations of the non-GAAP financial measures to its most directly comparable financial measures as calculated and presented in accordance with GAAP.

Eagle Rock defines Adjusted EBITDA as net income (loss) plus or (minus) income tax provision (benefit); interest-net, including gains and losses from interest rate risk management instruments that settled during the period and other expense; depreciation, depletion and amortization expense; impairment expense; other operating expense, non-recurring; other non-cash operating and general and administrative expenses, including non-cash compensation related to Eagle Rock’s equity-based compensation program; mark-to-market (gains) losses on commodity and interest rate risk management related instruments; gains (losses) on discontinued operations and other (income) expense.

Eagle Rock uses Adjusted EBITDA as a measure of its core profitability to assess the financial performance of its assets. Adjusted EBITDA is also used as a supplemental financial measure by external users of Eagle Rock’s financial statements such as investors, commercial banks and research analysts. For example, the compliance covenant used by Eagle Rock’s lenders under its credit agreement which is designed to measure Eagle Rock’s viability and its ability to perform under the terms of its credit agreement uses a variant of Eagle Rock’s Adjusted EBITDA. Eagle Rock believes that investors benefit from having access to the same financial measures that its management team uses in evaluating performance. Adjusted EBITDA is useful in determining Eagle Rock’s ability to sustain or increase distributions. By excluding unrealized derivative gains (losses), a non-cash, mark-to-market benefit (charge) which represents the change in fair

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market value of Eagle Rock’s executed derivative instruments and is independent of its assets’ performance or cash flow generating ability, Eagle Rock believes Adjusted EBITDA provides additional information of Eagle Rock’s ability to generate cash sufficient to pay interest costs, support its level of indebtedness, make cash distributions to its unitholders and general partner and finance its maintenance capital expenditures. Eagle Rock further believe that Adjusted EBITDA also provides additional information on the underlying performance of its operating assets by isolating the performance of its operating assets from the impact of an unrealized, non-cash measure designed to describe the fluctuating inherent value of a financial asset. Similarly, by excluding the impact of non-recurring discontinued operations, Adjusted EBITDA provides users of Eagle Rock’s financial statements additional information on its current assets’ cash generation ability, independently from that of assets which are no longer a part of its operations. Eagle Rock’s Adjusted EBITDA definition may not be comparable to Adjusted EBITDA or similarly titled measures as used by other entities, as other entities may not calculate Adjusted EBITDA in the same manner as Eagle Rock. For example, Eagle Rock includes in Adjusted EBITDA the actual settlement revenue created from its commodity hedges by virtue of transactions occasionally undertaken by Eagle Rock to reset commodity hedges to higher prices or purchase puts or other similar floors, despite the fact that Eagle Rock excludes from Adjusted EBITDA any charge for amortization of the cost of such commodity hedge reset transactions or puts.

Adjusted EBITDA does not include interest expense, income taxes or depreciation and amortization expense. Because Eagle Rock has borrowed money to finance its operations, interest expense is a necessary element of its costs and ability to generate net income. Because Eagle Rock uses capital assets, depreciation and amortization are also necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, Eagle Rock believes that it is important to consider both net income (loss) and net cash flows provided by operating activities determined in accordance with GAAP, as well as Adjusted EBITDA, to evaluate its performance and liquidity.

Adjusted EBITDA should not be considered an alternative to net income, operating income, cash flows provided by operating activities or any other measure of financial performance presented in accordance with GAAP.

Distributable Cash Flow is defined as Adjusted EBITDA minus: (i) maintenance capital expenditures; (ii) cash interest expense; (iii) cash income taxes; and (iv) the addition of losses or subtraction of gains relating to other miscellaneous non-cash amounts affecting net income (loss) for the period. Maintenance capital expenditures represent capital expenditures necessary to maintain Eagle Rock’s production. Eagle Rock estimates these amounts based on current projections and expectations, and does not undertake to adjust any historical amounts based on the actual impact of such expenditures on production. As a result, the included amount of maintenance capital expenditures could fail to maintain production if actual performance does not meet Eagle Rock’s projections and expectations, including, without limitation, on account of: (i) unanticipated mechanical issues; (ii) unanticipated delays; (iii) poorer than expected production performance of Eagle Rock’s new wells and recompletions; and/or (iv) unanticipated loss of, or higher than anticipated decline in, existing production.

Distributable Cash Flow is a performance metric used by Eagle Rock’s senior management to compare cash flows generated by Eagle Rock (excluding growth capital expenditures and prior to the establishment of any retained cash reserves by the Eagle Rock Board) to the cash distributions expected to be paid to Eagle Rock common unitholders. Using this metric, Eagle Rock management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. This financial measure also is important to Eagle Rock investors as an indicator of whether Eagle Rock is generating cash flow at a level that can sustain, or support an increase in, quarterly distribution rates. Actual distributions are set by the Eagle Rock Board.

The GAAP measure most directly comparable to Distributable Cash Flow is net income (loss). Eagle Rock’s Distributable Cash Flow definition may not be comparable to Distributable Cash Flow or similarly titled measures of other entities, as other entities may not calculate Distributable Cash Flow (and Adjusted EBITDA, on which it builds) in the same manner as Eagle Rock. See the example given above for Adjusted EBITDA related to amortization of costs of commodity hedges, including costs of hedge reset transactions.

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The following table provides a reconciliation of (i) Adjusted EBITDA to net cash flows provided by operating activities and net income (loss) and (ii) Distributable Cash Flow to net income (loss):

		Six Months Ended June 30,								Year Ended December 31,
		2015				2014				2014				2013				2012				2011				2010
		($ in thousands)
Reconciliation of Adjusted EBITDA to net cash flows provided by (used in) operating activities and net (loss) income:
Net cash flows provided by (used in) operating activities		$	35,230			$	25,674			$	78,126			$	114,243			$	75,336			$	60,419			$	6,716
Add (deduct):
Discontinued operations, net of tax			(974	)			(36,249	)			212,460				(49,808	)			(118,456	)			19,483				35,218
Depreciation, depletion, amortization and impairment			(99,379	)			(40,705	)			(481,471	)			(303,730	)			(135,799	)			(78,637	)			(35,470	)
Amortization of debt issuance cost			(546	)			(1,269	)			(2,241	)			(2,151	)			(1,735	)			(1,621	)			(1,305	)
Gain (loss) from risk management activities, net			8,963				(28,975	)			92,697				(5,041	)			23,383				25,868				(31,161	)
Derivative settlements – operating			(27,505	)			5,314				(4,669	)			(7,478	)			(5,368	)			22,456				25,205
Other			(1,375	)			(3,903	)			(5,624	)			(9,119	)			(7,127	)			(1,954	)			(3,290	)
Loss on short-term investments			(5,754	)			—				(62,028	)			—				—				—				—
Accounts receivable and other current assets			(4,753	)			24,728				24,216				(16,118	)			24,655				(13,924	)			(5,039	)
Accounts payable and accrued liabilities			13,225				(7,208	)			9,161				(774	)			(16,717	)			26,975				3,992
Risk management activities			—				—				—				—				6,607				15,773				—
Other assets and liabilities			775				989				(534	)			1,997				4,619				(1,706	)			(215	)
Net (loss) income			(82,093	)			(61,604	)			(139,907	)			(277,979	)			(150,602	)			73,132				(5,349	)
Add (deduct):
Interest expense, net			6,324				13,124				20,016				25,575				26,531				27,990				24,244
Depreciation, depletion, amortization and impairment			99,379				40,705				481,471				303,730				135,799				78,637				35,470
Income tax benefit			(1,521	)			(1,750	)			(5,403	)			(5,595	)			(1,093	)			(3,350	)			(2,885	)
EBITDA			22,089				(9,525	)			356,177				45,731				10,635				176,409				51,480
Add (deduct):
(Gain) loss from risk management activities, net			(8,963	)			28,975				(92,697	)			5,041				(23,383	)			(25,868	)			31,161
Total derivative settlements			25,620				(8,739	)			(354	)			8,801				19,817				(16,189	)			(24,074	)
Restricted unit compensation expense			3,000				4,042				8,198				10,392				7,719				4,297				4,271
Non-cash mark-to-market imbalances			183				(7	)			(2	)			(1	)			317				74				(746	)
Discontinued operations, net of tax			974				36,249				(212,460	)			49,808				118,456				(19,483	)			(35,218	)
Loss on short-term investments			5,754				—				62,028				—				—				—				—
Other income			(23	)			—				—				—				—				—				—
Other			2,617				—				—				—				—				—
ADJUSTED EBITDA(a)		$	51,251			$	50,995			$	120,890			$	119,772			$	133,561			$	119,240			$	26,874