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LRR Talks 1Q Results Ahead of Merger with Vanguard

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LRR Energy, L.P. announced today its operating and financial results for the three months ended March 31, 2015.

LRR Energy's average net production for April 2015 was approximately 6,760 Boe/d through April 24, 2015.

Recent Events

On April 20, 2015, LRR Energy and Vanguard Natural Resources, LLC announced the signing of a Purchase Agreement and Plan of Merger pursuant to which a subsidiary of Vanguard will merge into LRR Energy, and at the same time, Vanguard will acquire LRE GP, LLC, the general partner of LRR Energy for total consideration of $251 million in Vanguard common units and the assumption of LRR Energy's net debt of $288 million. 

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As a result of the transaction, LRR Energy and its general partner will become wholly owned subsidiaries of Vanguard. The transaction, which has been approved by the boards of directors of both companies, including the Conflicts Committee of the Board of Directors of LRR Energy, will be a tax-free, unit-for-unit transaction with an exchange ratio of 0.55 Vanguard common units per LRE common unit. In addition, Vanguard will acquire all of the limited liability company interests in LRE GP, LLC in exchange for 12,320 Vanguard common units. The transaction is expected to close in the third quarter of 2015.

On April 20, 2015, LRR Energy announced that the Board of Directors of its general partner declared a reduced cash distribution for the first quarter of 2015 of $0.1875 per outstanding unit, or $0.75 on an annualized basis. The distribution will be paid on May 15, 2015 to all unitholders of record as of the close of business on May 1, 2015.

As of April 30, 2015, LRR Energy had $240 million of outstanding borrowings under its revolving credit facility and $50 million of outstanding borrowings under its term loan. LRR Energy is currently in discussions with its lenders as it relates to the spring redetermination of the borrowing base under its revolving credit facility. LRR Energy expects to finalize the borrowing base redetermination process by May 11, 2015.

LRR Energy's term loan contains various covenants and restrictive provisions as described in the Form 10-K for the year ended December 31, 2014. LRR Energy is required to test the asset coverage ratio at specified intervals as described in the term loan agreement. LRR Energy does not expect to be in compliance with the asset coverage ratio during the spring borrowing base redetermination; however, it expects to receive a waiver from the lender for the asset coverage ratio covenant in connection with the redetermination.