- NRP will acquire approximately 92 million tons of coal reserves in WV
- NRP will acquire the surface and timber on approximately 33,700 acres
- NRP will issue 2.4 million units to Dingess-Rum
HOUSTON, Dec. 19 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P.
(NYSE: NRP and NYSE: NSP), together with Dingess-Rum Properties, Inc.
announced today that Natural Resource Partners has signed an agreement to
acquire approximately 92 million tons of coal and 33,700 acres of surface and
timber from Dingess-Rum in exchange for 2.4 million common units of NRP. The
transaction is expected to close in January and is subject to customary
closing conditions, including the approval of the shareholders of Dingess-Rum.
The properties are located in Logan, Clay and Nicholas Counties in West
Virginia. The Logan county properties are strategically located near NRP's
recently announced D.D. Shepard acquisition and the partnership's Pinnacle
reserves. The Logan County reserves are currently being mined by Massey
Energy and Magnum Coal. The Clay and Nicholas reserves are adjacent to other
NRP property and will be developed in the future. Over 30% of these reserves
are high quality metallurgical coal.
This transaction will be immediately accretive and NRP anticipates that
2007 net cash flows from the properties will be nearly $19 million, based on
approximately 5.5 million tons of production that will increase over time as
new properties are brought on stream. Net cash flows will be generated from
coal royalty revenue, overriding royalties, wheelage, timber and stone. There
will also be some additional general and administrative expenses associated
with the transaction.
"When we went public we anticipated that NRP would be a tax-advantaged
vehicle for privately owned land companies to diversify their holdings, add
flexibility, provide liquidity, and assure a cash flow stream for their
owners. Dingess-Rum has elected to do just that by agreeing to contribute its
royalty generating assets to NRP in exchange for units in our partnership. We
look forward to having them as partners. They have a history of over 100
years as a responsible, highly respected land holding company. We are honored
that they have selected us to carry on their tradition," said Nick Carter,
President and Chief Operating Officer.
Hornor Davis, President and CEO of Dingess-Rum, said today, "Our company,
founded in 1903, is enthusiastic about this historic decision and investment
in NRP. This culminates a thorough process of considering strategic
alternatives for the second century of Dingess-Rum." Davis, a fifteen year
employee and the great grandson of the first company President, emphasized,
"The values of NRP are representative of the shareholders' and employees'
longstanding stewardship of these assets and dedication to economic
development of West Virginia. I am especially pleased that NRP's operations
are headquartered in Huntington, WV and that NRP has offered employment to all
Dingess-Rum employees in Logan County. Dingess-Rum expects to be a long term
investor in NRP and looks forward to a prosperous future for its company, its
former employees, and the community."
"Dingess-Rum has a talented group of people in their Logan County office
that have managed these properties for many years. In conjunction with this
acquisition, we are pleased to announce that Greg Wooten, a twenty-five year
employee with Dingess-Rum, has accepted a position with NRP and we hope that
his whole team in Logan will also join us. Greg and his team will be
responsible for managing these properties as well as some of our other
properties," said Mr. Carter.
Dingess-Rum, a private West Virginia company with offices in Charleston,
continues to hold various investments including mineral properties in southern
West Virginia. Dingess-Rum was advised in the strategic planning and NRP
transaction by Bovaro Partners, LLC with offices in Baltimore and New York
City.
Natural Resource Partners L.P. is headquartered in Houston, TX, with its
operation's 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 includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements include the estimated
reserves, net cash flows, as well as the accretive nature of the transaction.
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.
12/19/2006
CONTACT: Kathy Hager of Natural Resource Partners L.P., +1-713-751-7555,
or khager@nrplp.com
8600 12/19/2006 17:16 EST http://www.prnewswire.com