On July 18, 2008, pursuant to a Purchase and Sale Agreement dated July 18, 2008 (the "Purchase Agreement"),Vanguard Natural Resources, LLC (the "Company"), and its wholly-owned subsidiary Vanguard Permian, LLC ("Vanguard Permian"), agreed to acquire certain producing and non-producing oil and gas properties from Segundo Navarro Drilling, Ltd., an affiliate of the Lewis Energy Group ("Lewis"), in South Texas (the "Purchased Assets") for approximately $53.4 million in cash and Company units (the "Acquisition"). The consideration included $32.04 million in cash and $21.36 million in Company units, the number of which shall be determined based on the 20 day average closing price of the units on the NYSE Arca prior to the closing date of the transaction, subject however to a floor price of $15.75 per unit and a ceiling price of $16.75 per unit This transaction is scheduled to close before the end of July and is subject to customary closing conditions and certain preferential rights to purchase applicable to the Purchased Assets.

The Purchased Assets have total estimated proved reserves of 20 Bcfe as of June 1, 2008, of which approximately 98% is oil and 65% is proved developed. These reserves have a 1,150 Btu content. Lewis will continue to operate all of the wells acquired in this transaction and will operate the undeveloped portion of the properties, which Vanguard and Lewis will jointly develop. Based on the current net daily production of approximately 3,000 Mcf the properties have a reserve to production ratio of approximately 18 years.

The $32.04 million cash portion of the purchase price will be paid from borrowings under the Company's reserve-based credit facility. The purchase price is subject to customary purchase price adjustments.

At the closing, Lewis has agreed to assign, and the Company has agreed to assume, natural gas swaps and collars based on Houston Ship Channel pricing for approximately 85% of the estimated gas production from existing producing wells for the period beginning July 2008 through December 2011. A schedule of the hedges acquired in this transaction is shown below.

Hedging Schedule:

Period             Volume (Mmbtu) Hedge  Pricing (1)

July-December 2008 527,800        Collar $ 11.40-12.85
2009               970,800        Swap   $ 11.00
2010               843,900        Swap   $ 10.07
2011               762,200        Swap   $ 9.75

(1) All prices are Houston Ship Channel first of month index prices. The Swap prices shown for 2009-2011 are weighted average prices for the calendar year.

The parties have made customary representations, warranties, covenants and agreements in the Purchase Agreement.

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, which is attached as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.

On July 21, 2008, the Company issued a press release announcing the execution and delivery of the Purchase Agreement, a copy of which is filed as Exhibit 99.1 hereto and incorporated herein by reference.