"PVR enjoyed an excellent quarter due to a significant increase in coal production, particularly from a West Virginia longwall mine and an improved price environment,” said CEO James Dearlove.

Dearlove predicted even better results for this year over 2003 record results, primarily due to the combination of a diminished supply of easily recoverable coal reserves and increased coal demand resulting in very strong Appalachian coal markets.

“Renewing term coal sales contracts are now typically at or above $40 per ton and spot coal sales prices are currently over $50 per ton.

“Approximately 50% of PVR's coals are sold by its lessees under term contracts, approximately 20% is sold on the spot market and royalty is received on the remaining 30% according to fixed price contracts that escalate on an annual basis. As a result of this mix of royalty types, PVR expects to realize the full benefit of these higher coal prices on a delayed basis.

Also adding to potential earnings was the rollout in January 2004 of the Bull Creek loadout facility on the company’s Coal River property. It is expected to contribute approximately $0.7 million in revenues in 2004.

“We continue to seek acquisitions of coal properties and additional fee-based assets, both in the coal and mid-stream oil and gas sectors."

First quarter 2004 operating income was $9.2 million, a 51% increase over $6.1 million reported in the first quarter of 2003. The rise was attributable to increased tonnage, increased coal royalty revenues to $16.9 million and average royalties per ton increased to $2.12.