NRP To Acquire Coastal Coal Assets – Natural Resource Partners purchases mineral rights from El Paso Corp – Brief Article
Natural Resource Partners (NRP) has signed an agreement to purchase mineral rights to about 120 million tons of coal reserves from subsidiaries of El Paso Corp. for $69 million in cash. The transaction is subject to the satisfaction of certain pre-closing conditions. NRP’s credit line will be used to finance the acquisition.
“We are very excited to announce our first acquisition to be immediately accretive to both earnings and cash flow upon closing,” said Corbin J. Robertson, Jr., chairman and CEO.
“These assets complement our current Evans-Laviers and Lynch properties in Kentucky and our Sincell, Beaver Creek, and Stony River properties in West Virginia and Maryland. With the addition of these assets, our Appalachian reserves will comprise about 85% of NRP’s total coal reserves of 1.27 billion tons,” said President Nick Carter.
More than one-half of the 120 million tons of reserves are located in Kentucky with reserves located in Virginia and West Virginia. Approximately 89% of the reserves will require our lessees to employ underground mining techniques to recover. Additionally, the transaction includes 177,000 mineral acres (including about 25,000 acres of surface) which generate income from timber as well as oil and gas. An overriding royalty interest in coal in North Dakota is also being acquired. In 2003, coal production from these assets is expected to be about 7 million tons. NRP will retain El Paso’s Hazard, Ky., office and personnel to assist in the management of the properties.
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