Natural Resource Partners acquires W.Va. coal reserves

Natural Resource Partners acquires W.Va. coal reserves

Natural Resource Partners LP has acquired about 35 million tons of coal reserves in Northern West Virginia from Western Pocahontas Properties LP for 250,000 NRP common units and about $10.2 million in cash.

WPP, with operations in Huntington, W.Va., is a partnership controlled by Corbin Robertson Jr., chairman and chief executive officer of NRP. The conflicts committee of the board of directors of GP Natural Resource Partners LLC, the general partner of NRP, approved the transaction with WPP on behalf of the limited partners of NRP.

The Houston-based coal property manager expects the properties to generate about $5.9 million of annual coal royalty revenue, based on estimated production of about 2.4 million tons.

WPP has retained an overriding royalty interest on about 16 million tons of non-permitted reserves, which will be offered to NRP at the time those reserves are permitted.

A subsidiary of Tulsa, Okla.-based Alliance Resource Partners LP is the lessee of the property, which is located in Grant and Tucker counties.

Natural Resource Partners (NYSE: NRP) said the deal is the first under the omnibus agreement with Western Pocahontas that was formed at the time of NRP’s initial public offering.

As part of the deal, reserves must be offered to NRP at the time they become income-producing. Reserves still subject to this agreement include another 100 million tons of reserves held by WPP in Appalachia and 20 billion tons of reserves held by Houston-based Great Northern Properties Limited Partnership in Montana and North Dakota.

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