UPDATE: Citigroup Cuts PT to $31.50 on Vanguard Natural Resources on Borrowing Base Expansion

Citigroup reiterated Vanguard Natural Resources

at Buy and reduced its price target from $33 to $31.50. Citigroup commented, "Post completion of the Bill Barrett acquisition, VNR's borrowing base was increased from $960 million to $1.2 billion. Pro forma for the acquisition and the senior notes issuance in the fourth quarter, we estimate year end 2012E debt of approximately $1. 2 billion (i.e. $669 million outstanding under credit facility), which implies a 2012E net Debt-toEBITDA ratio and a percentage drawn under the credit facility of 5.3x and 56%, respectively. In addition, we estimate 2013E net Debt to EBITDA ratio of 3.7x. In our opinion, the company is likely to issue equity, in conjunction with an acquisition, to repay debt and reduce leverage." Vanguard Natural Resources closed at $31.50 on Tuesday.