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Natural Resource Partners L.P. Increases Distribution and Issues 2008 Guidance


HOUSTON, Jan. 16 /PRNewswire-FirstCall/ -- Natural Resource Partners L.P. (NYSE: NRP) today announced that the Board of Directors of its general partner has declared a fourth quarter 2007 distribution of $0.485 per unit for NRP, an increase of $0.01 in its quarterly distribution. The distribution will be paid on February 14, 2008 to unitholders of record on February 1, 2008. This makes the eighteenth consecutive quarter that NRP has increased its distribution.

2008 Guidance

"Revenues and distributable cash flow will be significantly higher in 2008 due to increased production from several mines and significant increases in coal transportation throughput," said Nick Carter, President and Chief Operating Officer. "Additionally, in general our lessees are reporting increased sales prices on both metallurgical and steam coal."

For 2008, NRP expects to generate between $167 million and $184 million in distributable cash flow, up over 20% from the midpoint of NRP's current 2007 guidance. As in the past, distributable cash flow is shown net of principal payments on its debt, which in 2008 are scheduled to be $23.2 million, up from $13.4 million in 2007. "NRP, unlike most MLPs, is amortizing its debt, which reduces its distributable cash flow. Distributable cash flow, before principal payments, is forecasted to range from approximately $190 million to $207 million," said Dwight Dunlap, Chief Financial Officer.

Total revenues are also forecasted to increase over 20% from the current 2007 guidance to between $242 million and $277 million. Approximately 75% of total revenues will be generated from coal royalty revenues, ranging from $187 million to $207 million based on coal royalty revenue per ton between $3.09 and $3.27. Production volumes are expected to be between 57 million tons and 67 million tons and are more heavily weighted towards the second half of the year, as new mines ramp up production. Transportation fees are forecasted to nearly triple in 2008 to a range of $14 million to $16 million. Approximately 23% of NRP's production and 30% of its coal royalty revenues should be derived from metallurgical coal, with the increased percentage in anticipated revenues resulting from improved pricing.

The following table includes further details regarding guidance for 2008. Consistent with its past practice, NRP will review the guidance throughout the year and provide updated information as appropriate.

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, and coal handling and transportation infrastructure in the three major coal producing regions of the United States: Appalachia, the Illinois Basin and the Powder River Basin. In addition, the partnership also manages aggregate reserves, oil and gas properties and timber assets across the United States.

For additional information, please contact Kathy H. Roberts at 713-751-7555 or Further information about NRP is available on the partnership's website at

This press release may include "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements include the anticipated coal royalty revenues, coal production, operating expenses, net income and other items listed on the following table. All statements 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.

                               - table follows-

                        Natural Resource Partners L.P.
            (dollars and tons in millions except per unit amounts)

                                                          Full Year 2008
      Coal royalty revenues                          $ 186.5    -    207.0
      Aggregate revenues                                 7.0    -      9.0
      Override royalties                                10.0    -     13.0
      Oil and gas royalties                              4.5    -      5.5
      Coal processing fees                               7.0    -      9.0
      Coal transportation fees                          14.0    -     18.0
      Property taxes                                     9.0    -     10.0
      Other revenues (1)                                 4.0    -      5.0
          Total Revenues                             $ 242.0    -  $ 276.5

      Depreciation, depletion, and amortization      $  70.0    -  $  75.0
      General and administrative                        16.5    -     18.5
      Property, franchise and other taxes               12.0    -     13.5
      Coal transportation expenses                       1.3    -      1.5
      Coal royalty and override payments                10.5    -     12.0
          Total operating expenses                     104.3    -    113.5

      Interest expense (net)                         $  22.0    -  $  25.0

    Net income                                       $ 120.0       $ 132.0

    Net income per unit                              $  1.40    -  $  1.55

    Principal payments                               $  23.2    -  $  23.2

    Distributable cash flow (2)                      $ 167.0    -  $ 184.0

    (1) Other revenues consist of minimums recognized as revenue, wheelage,
        rentals and timber.
    (2) Distributable cash flow represents net income plus depletion and
        amortization minus principal payments.  Distributable cash flow is a
        "non-GAAP financial measure" that is presented because management
        believes it is a useful adjunct to net cash provided by operating
        activities under GAAP.  Distributable cash flow is a significant
        liquidity metric that is an indicator of NRP's ability to generate
        cash flows at a level that can sustain or support an increase in
        quarterly cash distributions paid to its partners.  Distributable cash
        flow is also the quantitative standard used throughout the investment
        community with respect to publicly-traded partnerships.  Distributable
        cash flow is not a measure of financial performance under GAAP and
        should not be considered as an alternative to cash flows from
        operating, investing or financing activities.  We believe that "net
        cash provided by operating activities" would be the most comparable
        financial measure to distributable cash.  However, due to the
        substantial uncertainties associated with forecasting future changes
        to operating assets and liabilities, we cannot provide guidance on
        forward-looking net cash provided by operating activities or provide
        reconciliations of distributable cash flow to that measure.

                              Guidance continued

                                                          Full Year 2008
    Regional Statistics
    Coal royalty production (tons)
          Northern Appalachia                            6.0    -      7.5
          Central Appalachia                            35.0    -     40.0
          Southern Appalachia                            4.0    -      5.0
      Appalachia                                        45.0    -     52.5
      Illinois Basin                                     6.5    -      8.0
      Northern Powder River Basin                        5.5    -      6.5
        Total                                           57.0    -     67.0

    Coal royalty revenues
          Northern Appalachia                        $  17.5    -  $  21.0
          Central Appalachia                           125.0    -    135.0
          Southern Appalachia                           17.0    -     19.5
      Appalachia                                     $ 159.5    -  $ 175.5
      Illinois Basin                                    17.0    -     19.0
      Northern Powder River Basin                       10.0    -     12.5
        Total                                        $ 186.5    -  $ 207.0

    Average coal royalty revenue per ton
          Northern Appalachia                        $  2.80    -  $  2.92
          Central Appalachia                            3.38    -     3.57
          Southern Appalachia                           3.90    -     4.25
      Appalachia                                     $  3.34    -  $  3.54
      Illinois Basin                                    2.38    -     2.62
      Northern Powder River Basin                       1.82    -     1.92
        Total                                        $  3.09    -  $  3.27

    Production (tons)                                    5.0    -      5.6
    Revenues                                         $   7.0    -      9.0
    Average royalty revenue per ton                  $  1.40    -  $  1.61

Natural Resource Partners L.P.

Kathy H. Roberts of Natural Resource Partners L.P., +1-713-751-7555,

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