EXHIBIT
      10.32


    INDEMNITY
      AGREEMENT

     

    This
      Indemnity Agreement (this “Agreement”), dated as of August 7, 2008, is made by
      and between Vanguard Natural Resources, LLC, a Delaware limited liability
      company (the “Company”), and ______________________________ (the “Indemnitee”),
      an “Agent” (as hereinafter defined) of the Company.

     

    RECITALS

     

    A. The
      Company recognizes that competent and experienced persons are increasingly
      reluctant to serve as Directors, officers or employees of companies unless
      they
      are protected by comprehensive liability insurance or indemnification, or both,
      due to increased exposure to litigation costs and risks resulting from their
      service to such companies, and due to the fact that the exposure frequently
      bears no reasonable relationship to their compensation;

     

    B. The
      statutes and judicial decisions regarding the duties of Directors and officers
      are often difficult to apply, ambiguous, or conflicting, and therefore fail
      to
      provide such Directors and officers with adequate, reliable knowledge of legal
      risks to which they are exposed or information regarding the proper course
      of
      action to take;

     

    C. The
      Company and the Indemnitee recognize that plaintiffs often seek damages in
      such
      large amounts and the costs of litigation may be so expensive (whether or not
      the case is meritorious), that the defense and/or settlement of such litigation
      is often beyond the personal resources of Directors, officers and
      employees;

     

    D. The
      Company believes that it is often unfair for its Directors, officers and
      employees to assume the risk of judgments and other expenses which may occur
      in
      cases in which the Director, officer or employee has acted in good faith and
      in
      a manner the Director, officer or employee reasonably believes to be in or
      not
      opposed to the best interests of the Company;

     

    E. The
      Company desires the Indemnitee to serve or continue to serve as an Agent of
      the
      Company and recognizes that the Indemnitee may not be willing to serve or
      continue to serve the Company without additional indemnification and insurance
      to protect against claims for damages arising out of or related to such services
      to the Company;

     

    F. The
      Company believes that the interests of the Company and its shareholders would
      best be served by a combination of Directors’ and officers’ liability insurance
      and the indemnification by the Company of the Directors, officers and employees
      of the Company; and

     

    G. The
      Board
      of Directors has determined that contractual indemnification as set forth in
      this Agreement is reasonable and prudent, and is necessary to promote the best
      interests of the Company and its shareholders.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      below, the parties to this Agreement, intending to be legally bound, hereby
      agree as follows:

     

    1. Definitions

     

    (a) Agent.
      For
      purposes of this Agreement, “Agent” of the Company means any person who is or
      was a Director, officer, employee or other agent of the Company or a Subsidiary
      of the Company; or is or was serving at the request of, for the convenience
      of,
      or to represent the interests of the Company or a Subsidiary of the Company
      as a
      Director, officer, employee or agent of another foreign or domestic corporation,
      partnership, joint venture, trust or Other Enterprise.

     

    (b) Expenses.
      For
      purposes of
      this
      Agreement, “Expenses” includes all direct and indirect costs of any type or
      nature whatsoever (including, without limitation, all attorneys’ fees and
      related disbursements, other out-of-pocket costs and reasonable compensation
      for
      time spent by the Indemnitee for which he is not otherwise compensated by the
      Company or any third party, provided that the rate of compensation, if any,
      and
      estimated time involved is approved in advance by a majority vote of the Board
      of Directors), actually and reasonably incurred by the Indemnitee in connection
      with either the investigation, defense or appeal of a Proceeding or establishing
      or enforcing a right to indemnification under this Agreement or otherwise,
      and
      amounts paid in settlement (if such settlement is approved in advance by the
      Company) by or on behalf of the Indemnitee, but shall not include any judgments,
      fines or penalties actually levied against the Indemnitee.

     

    (c) Proceeding.
      For the
      purposes of this Agreement, “Proceeding” means any threatened, pending or
      completed action, suit or other proceeding, whether civil, criminal,
      administrative, investigative or any other type whatsoever.

     

    (d) Subsidiary.
      For
      purposes of this Agreement, “Subsidiary” means any corporation of which 50% or
      more of the outstanding voting securities are owned directly or indirectly
      by
      the Company, by the Company and one or more other subsidiaries, or by one or
      more other subsidiaries.

     

    (e) Other
      Enterprise.
      For
      purposes of this Agreement, “Other Enterprise” means any other enterprise and
      shall include employee benefit plans; references to “fines” shall include any
      excise tax assessed with respect to any employee benefit plans; references
      to
“serving at the request of the Company” shall include any service as an Agent of
      the Company which imposes duties on, or involves services by, such Director,
      officer, employee or Agent of the Company with respect to an employee benefit
      plan, its participants, or beneficiaries; any person who acts in good faith
      and
      in a manner he reasonably believes to be in the best interest of the
      participants and beneficiaries of an employee benefit plan shall be deemed
      to
      have acted in a manner “not opposed to the best interests of the Company” as
      referred to in this Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    2. Agreement
      to Serve.
      The
      Indemnitee agrees to serve and/or continue to serve as an Agent of the Company,
      at its will (or under separate agreement, if such agreement exists), in the
      capacity the Indemnitee currently serves as an Agent of the Company, so long
      as
      he is duly appointed or elected and qualified in accordance with the applicable
      provisions of the Articles of Association or comparable corporate governance
      document (“Articles”) of the Company or the Articles of any Subsidiary of the
      Company or until such time as he tenders his resignation in writing, provided,
      however, that nothing contained in this Agreement is intended to create any
      right in favor of the Indemnitee to continued employment in any
      capacity.

     

    3. Indemnity
      in Third Party Proceedings.
      The
      Company shall indemnify the Indemnitee if the Indemnitee is a party to or
      threatened to be made a party to or otherwise involved in any Proceeding (other
      than a Proceeding by or in the name of the Company to procure a judgment in
      its
      favor) by reason of the fact that the Indemnitee is or was an Agent of the
      Company, or by reason of any act or inaction by him in any such capacity,
      against any and all Expenses and liabilities of any type whatsoever (including,
      but not limited to, judgments, fines and penalties), actually and reasonably
      incurred by him in connection with the investigation, defense, settlement or
      appeal of such Proceeding, but only in the absence of fraud, willful default
      or
      dishonesty on the part of the Indemnitee and if the Indemnitee acted in good
      faith and in a manner he reasonably believed to be in or not opposed to the
      best
      interests of the Company, and, with respect to any criminal action or
      Proceeding, had no reasonable cause to believe his conduct was unlawful. The
      termination of any Proceeding by judgment, order of court, settlement,
      conviction or on plea of nolo
      contendere,
      or its
      equivalent, shall not, of itself, create a presumption that the Indemnitee
      did
      not act in good faith in a manner which he reasonably believed to be in the
      best
      interests of the Company or, with respect to any criminal Proceedings, that
      such
      person had reasonable cause to believe that his conduct was
      unlawful.

     

    4. Indemnity
      in Derivative Actions.
      The
      Company shall indemnify the Indemnitee if the Indemnitee is a party to or
      threatened to be made a party to or otherwise involved in any Proceeding by
      or
      in the name of the Company to procure a judgment in its favor by reason of
      the
      fact that the Indemnitee is or was an Agent of the Company, or by reason of
      any
      act or inaction by him in any such capacity, against all Expenses actually
      and
      reasonably incurred by the Indemnitee in connection with the investigation,
      defense, settlement, or appeal of such Proceeding, but only in the absence
      of
      fraud, willful default or dishonesty on the part of the Indemnitee and if the
      Indemnitee acted in good faith and in a manner he reasonably believed to be
      in
      or not opposed to the best interests of the Company, except that no
      indemnification under this subsection shall be made in respect of any claim,
      issue or matter as to which the Indemnitee shall have been finally adjudged
      to
      be liable to the Company by a court of competent jurisdiction in the performance
      of his duty to the Company, unless and only to the extent that any court in
      which such Proceeding was brought shall determine upon application that, despite
      the adjudication of liability but in view of all the circumstances of the case,
      such person is fairly and reasonably entitled to indemnity for such Expenses
      as
      such court shall deem proper.

     

    5. Indemnification
      of Expenses of Successful Party.
      Notwithstanding any other provisions of this Agreement, to the extent that
      the
      Indemnitee has been successful on the merits or otherwise in defense of any
      Proceeding or in defense of any claim, issue or matter therein, including the
      dismissal of an action without prejudice, the Company shall indemnify the
      Indemnitee against all Expenses actually and reasonably incurred in connection
      with the investigation, defense or appeal of such Proceeding.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    6. Partial
      Indemnification.
      If the
      Indemnitee is entitled under any provision of this Agreement to indemnification
      by the Company for some or a portion of any Expenses or liabilities of any
      type
      whatsoever (including, but not limited to, judgments, fines or penalties),
      actually and reasonably incurred by him in the investigation, defense,
      settlement or appeal of a Proceeding but is not entitled, however, to
      indemnification for the total amount thereof, the Company shall nevertheless
      indemnify the Indemnitee for the portion thereof to which the Indemnitee is
      entitled.

     

    7. Advancement
      of Expenses.
      Subject
      to Section 10(a) below, the Company shall advance all Expenses incurred by
      the
      Indemnitee in connection with the investigation, defense, settlement or appeal
      of any Proceeding to which the Indemnitee is a party or is threatened to be
      made
      a party by reason of the fact that the Indemnitee is or was an Agent of the
      Company. The Indemnitee hereby undertakes to repay such amounts advanced only
      if, and to the extent that, it shall ultimately be determined that the
      Indemnitee is not entitled to be indemnified by the Company as authorized by
      this Agreement. The advances to be made under this Agreement shall be paid
      by
      the Company to or on behalf of the Indemnitee within 30 days following delivery
      of a written request therefor by the Indemnitee to the Company. By execution
      of
      this Agreement, the Indemnitee agrees to repayment of the Company of such
      Expenses under Section 7 if it is determined by a majority vote of the Board
      that the Indemnitee is not entitled to the indemnification payment; provided,
      however, that in no circumstance shall the Indemnitee be required to repay
      the
      Company for Expenses as to which the Indemnitee is entitled to indemnification
      under this Agreement.

     

    8. Notice
      and Other Indemnification Procedures.
      

     

    (a) Promptly
      after receipt by the Indemnitee of notice of the commencement of or the threat
      of commencement of any Proceeding, the Indemnitee shall, if the Indemnitee
      believes that indemnification with respect thereto may be sought from the
      Company under this Agreement, notify the Company of the commencement or threat
      of commencement thereof.

     

    (b) Any
      indemnification requested by the Indemnitee under Section 3 and/or 4 of this
      Agreement shall be made no later than 60 days after receipt of the written
      request of the Indemnitee, unless a determination is made within said 60 day
      period (i) by the Board of Directors of the Company by a majority vote of a
      quorum thereof consisting of Directors who are not parties to such Proceedings,
      or (ii) in the event such a quorum is not obtainable, at the election of the
      Company, either by independent legal counsel in a written opinion or by a panel
      of arbitrators from the American Arbitration Association (“AAA”), one of whom is
      selected by the Company, another of whom is selected by the Indemnitee and
      the
      last of whom is selected by the first two arbitrators so selected, that the
      Indemnitee has not met the relevant standards for indemnification set forth
      in
      Section 3 and 4 of this Agreement. In the event the Indemnitee is determined
      not
      to be entitled to indemnification, the Company shall give, or cause to be given
      to, the Indemnitee written notice thereof specifying the reason therefor,
      including any determination of fact or conclusion of law relied upon in reaching
      such determination.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c) Notwithstanding
      a determination under Section 8(b) above that the Indemnitee is not entitled
      to
      indemnification with respect to any specific Proceeding, the Indemnitee shall
      have the right to apply to any court of competent jurisdiction for the purpose
      of enforcing the Indemnitee’s right to indemnification pursuant to this
      Agreement. Neither the failure of the Company (including its Board of Directors
      or independent legal counsel or the panel of arbitrators) to have made a
      determination prior to the commencement of such action that indemnification
      or
      advances are proper in the circumstances because the Indemnitee has met the
      applicable standard of conduct, nor an actual determination by the Company
      (including its Board of Directors or independent legal counsel or the panel
      of
      arbitrators) that the Indemnitee has not met such applicable standard of
      conduct, shall be a defense to the action or create any presumption that the
      Indemnitee has not met the applicable standard of conduct. In any such
      proceeding, the Company will bear the burden of proof in showing that the
      Indemnitee’s conduct did not meet the applicable standard of conduct provided
      for by this agreement, and accordingly the Indemnitee shall be deemed to have
      a
prima
      facie
      right to
      indemnification under this agreement unless the Company can prove to the court’s
      satisfaction that the Indemnitee’s conduct did not meet the applicable standard
      of conduct provided for by this agreement or applicable law for
      indemnification.

     

    (d) In
      the
      absence of fraud, willful default or dishonesty on the part of the Indemnitee,
      the Company shall indemnify the Indemnitee against all Expenses incurred in
      connection with any hearing or Proceeding under this Section 8 unless a court
      of
      competent jurisdiction finds that each of the claims and/or defenses of the
      Indemnitee in any such Proceeding was frivolous or in bad faith.

     

    9. Insurance.
      The
      Company will obtain Directors’ and officers’ liability insurance (“D&O
      Insurance”) in reasonable amounts from established and reputable insurers with
      respect to which the Indemnitee is named as an insured. Notwithstanding any
      other provision of the Agreement, the Company shall not be obligated to
      indemnify the Indemnitee for Expenses, judgments, fines or penalties, which
      have
      been paid directly to or on behalf of the Indemnitee out of the Company’s
      D&O Insurance. If the Company has D&O Insurance in effect at the time
      the Company receives from the Indemnitee any notice of the commencement of
      a
      Proceeding, the Company shall give prompt notice of the commencement of such
      Proceeding to the insurers in accordance with the procedures set forth in the
      policy. The Company shall thereafter take all necessary or desirable action
      to
      cause such insurers to pay, on behalf of the Indemnitee, all amounts payable
      as
      a result of such Proceeding in accordance with the terms of such
      policy.

     

    10. Exceptions.
      Any
      other provision in this Agreement to the contrary notwithstanding, the Company
      shall not be obligated pursuant to the terms of this Agreement:

     

    (a) Claims
      Initiated by the Indemnitee.
      To
      indemnify or advance Expenses to the Indemnitee with respect to Proceedings
      or
      claims initiated or brought voluntarily by the Indemnitee and not by way of
      defense, except with respect to Proceedings brought to establish or enforce
      a
      right to indemnification under this Agreement or any other statute or law,
      but
      such indemnification or advancement of Expenses may be provided by the Company
      in specific cases if a majority of the Board of Directors finds it to be
      appropriate; or

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b) Action
      for Indemnification.
      To
      indemnify the Indemnitee for any Expenses incurred by the Indemnitee with
      respect to any Proceeding instituted by the Indemnitee to enforce or interpret
      this Agreement, if a court of competent jurisdiction or a panel of arbitrators
      determines that any of the material assertions made by the Indemnitee in such
      Proceeding was not made in good faith or was frivolous; or

     

    (c) Unauthorized
      Settlements.
      To
      indemnify the Indemnitee under this Agreement for any amounts paid in settlement
      of a Proceeding effected without the Company’s written consent. The Company
      shall not settle any Proceeding without the Indemnitee’s written consent.
      Neither the Company nor the Indemnitee will unreasonably withhold consent to
      any
      proposed settlement; or

     

    (d) Certain
      Matters.
      To
      indemnify the Indemnitee on account of any Proceeding with respect to (i)
      remuneration paid to the Indemnitee if it is determined by judgment or other
      adjudication that such remuneration was in violation of law, (ii) which judgment
      is rendered against the Indemnitee for an accounting of profits made from the
      purchase or sale by the Indemnitee of securities of the Company pursuant to
      the
      provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended,
      or similar provisions of any federal, state or local statute, or (iii) which
      it
      is determined by judgment or other adjudication that the Indemnitee’s conduct
      was knowingly fraudulent or dishonest.

     

    11. Nonexclusivity.
      The
      provisions for indemnification and advancement of Expenses set forth in this
      Agreement shall not be deemed exclusive of any other rights which the Indemnitee
      may have under any provision of law, the Company’s Memorandum or Articles of
      Association, in any court in which a Proceeding is brought, the vote of the
      Company’s shareholders or disinterested Directors, other agreements or
      otherwise, both as to action in his official capacity and to action in another
      capacity while occupying his position as an Agent of the Company, and the
      Indemnitee’s rights under this Agreement shall continue after the Indemnitee has
      ceased acting as an Agent of the Company and shall inure to the benefit of
      the
      heirs, executors and administrators of the Indemnitee.

     

    12. Subrogation.
      In the
      event of payment under this Agreement, the Company shall be subrogated to the
      extent of such payment to all of the rights of recovery of the Indemnitee,
      who
      shall execute all papers required and shall do everything that may be necessary
      to secure such rights, including the execution of such documents necessary
      to
      enable the Company effectively to bring suit to enforce such
      rights.

     

    13. Interpretation
      of Agreement.
      It is
      understood that the parties to this Agreement intend this Agreement to be
      interpreted and enforced so as to provide indemnification to the Indemnitee
      to
      the fullest extent now or hereafter permitted by law.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    14. Severability.
      If any
      provision or provisions of this Agreement shall be held to be invalid, illegal
      or unenforceable for any reason whatsoever, (i) the validity, legality and
      enforceability of the remaining provisions of the Agreement (including without
      limitation, all portions of any paragraphs of this Agreement containing any
      such
      provision held to be invalid, illegal or unenforceable, that are not themselves
      invalid, illegal or unenforceable) shall not in any way be affected or impaired
      thereby, and (ii) to the fullest extent possible, the provisions of this
      Agreement (including, without limitation, all portions of any paragraph of
      this
      Agreement containing any such provision held to be invalid, illegal or
      unenforceable, that are not themselves invalid, illegal or unenforceable) shall
      be construed so as to give effect to the intent manifested by the provision
      held
      invalid, illegal or unenforceable and to give effect to Section 13 of this
      Agreement.

     

    15. Modification
      and Waiver.
      No
      supplement, modification or amendment of this Agreement shall be binding unless
      executed in writing by both of the parties to this Agreement. No waiver of
      any
      of the provisions of this Agreement shall be deemed or shall constitute a waiver
      of any other provision of this Agreement (whether or not similar) nor shall
      such
      waiver constitute a continuing waiver.

     

    16. Successors
      and Assigns; Duration of Agreement.
      The
      terms of this Agreement shall bind, and shall inure to the benefit of, the
      successors and assigns of the parties to this Agreement. This Agreement shall
      continue in effect so long as the Indemnitee shall be subject to any Proceeding
      by reason of the fact that the Indemnitee is or was an Agent of the Company,
      regardless of whether the Indemnitee continues to serve as an Agent of the
      Company.

     

    17. Notice.
      All
      notices, requests, demands and other communications under this Agreement shall
      be in writing and shall be deemed duly given (i) if delivered by hand and
      receipted for by the party addressee, on the date of delivery, or (ii) if mailed
      by certified or registered mail with postage prepaid, on the third business
      day
      after the mailing date. Addresses for notice to either party are as shown on
      the
      signature page of this Agreement, or as subsequently modified by written
      notice.

     

    18. Governing
      Law.
      This
      Agreement shall be governed exclusively by and construed according to the laws
      of Delaware. If a court of competent jurisdiction shall make a final
      determination that the provisions of the law of any jurisdiction other than
      Delaware, govern indemnification by the Company of its Directors and officers,
      then the indemnification provided under this Agreement shall in all instances
      be
      enforceable only to the extent permitted under such law, notwithstanding any
      provision of this Agreement to the contrary.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	 	
              COMPANY:
                

               

              Vanguard
                Natural Resources, LLC

            
	 
 	 
 	 
 
	 	
              

              Name: Scott W. Smith
	 	Title: President
	 	
              Address:
                7700 San Felipe,

              Ste.
                485

              Houston,
                Texas 77063

            


    

     

    
      	 	 	 
	 	 	
              INDEMNITEE:

            
	 
 	 
 	 
 
	
            	
            	By:  
	 	
              
                

              

              Name:

            
	 	Title: 
	 	
              Address:
                

              
                

              

              
                

              

              
                

              

            


    

     

    
      
        
        

      

      
        8