HOUSTON, Nov. 21 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P.
(NYSE: NRP) and (NYSE: NSP) today announced that it has closed an acquisition
of coal reserves in Ohio and Pennsylvania for $29 million. The partnership
paid $10 million in cash and funded the remainder of the acquisition through
the use of its revolving credit facility.
The acquisition consists of 179 million tons of coal reserves in three
distinct areas: Southwest Pennsylvania, Central Pennsylvania and Ohio. A
significant portion of the Southwest Pennsylvania property is leased to
Consol, which is currently mining the Pittsburgh seam from the Enlow Fork
mine. The Ohio and Central Pennsylvania reserves are under lease to other
operators and will be mined in the future.
The transaction is effective as of October 1, 2005 and will be immediately
accretive. NRP estimates that it will generate approximately $1.8 million of
coal royalty revenues based on approximately 1 million tons of coal production
for the remainder of 2005 and approximately $5.8 million in 2006 from 3.3
million tons of production. NRP expects the coal reserves to continue to
generate stable cash flows through the end of this decade, at which time the
current mine plans indicate that the lessees will be producing on other
properties. NRP anticipates substantial revenues beginning again
approximately eight years from now from two major mines moving back onto these
properties and believes the acquisition is another step towards ensuring the
long-term sustainability of NRP's growth.
"We are using our financial strength to assure our ability to continue to
increase distributions over the long-term," said Corbin J. Robertson, Jr.,
Chairman and Chief Executive Officer.
Nick Carter, President and Chief Operating Officer said "This acquisition
exemplifies the kind of diversity we seek at NRP: 2 new states, a large amount
of high BTU, medium sulfur coal, new markets, 6 new lessees, and more
opportunities to expand."
The reserves were purchased from subsidiaries of American Financial Group
(NYSE: AFG) and were previously part of the Penn Central Transportation
Company.
Natural Resource Partners L.P. is headquartered in Houston, TX, with its
operations headquarters in Huntington, WV. NRP is a master limited
partnership that is principally engaged in the business of owning and managing
coal properties in the three major coal producing regions of the United
States: Appalachia, the Illinois Basin and the Powder River Basin. The common
units are traded on the New York Stock Exchange (NYSE) under the symbol NRP
and the subordinated units are traded on the NYSE under the symbol NSP.
For additional information, please contact Kathy Hager at 713-751-7555 or
khager@nrplp.com. Further information about NRP is available on the
partnership's website at http://www.nrplp.com .
This press release may include "forward-looking statements" as defined by
the Securities and Exchange Commission. Such statements include the estimated
coal reserves, the anticipated coal royalty revenues and production, the
accretive nature of the transaction and the ability of NRP to increase
distributions in the future. All statements, other than statements of
historical facts, included in this press release that address activities,
events or developments that the partnership expects, believes or anticipates
will or may occur in the future are forward-looking statements. These
statements are based on certain assumptions made by the partnership based on
its experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are appropriate in
the circumstances. Such statements are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of the
partnership. These risks include, but are not limited to, decreases in demand
for coal; changes in operating conditions and costs; production cuts by our
lessees; commodity prices; unanticipated geologic problems; changes in the
legislative or regulatory environment and other factors detailed in Natural
Resource Partners' Securities and Exchange Commission filings. Natural
Resource Partners L.P. has no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
SOURCE Natural Resource Partners L.P.
11/21/2005
CONTACT: Kathy Hager of Natural Resource Partners L.P., +1-713-751-7555,
or khager@nrplp.com
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Web site: http://www.nrplp.com
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