Increased revenue of $18.7 million was primarily due to increased coal royalty revenues which were at a record $17.5 million during the quarter.
Coal production from PVR’s properties in the second quarter of 2004 was 7.9 million tons, a 20% increase over the 6.6 million tons produced in the second quarter of 2003. Significant increases in production from three leases on PVR’s Coal River property in West Virginia were the primary contributors.
Average royalties per ton increased 19% to $2.21 in the second quarter, chiefly a result of higher market prices for coal and increased production from certain price-sensitive leases.
“We continue to see strong coal market conditions, particularly in Appalachia. Through
June 30, PVR has benefited from an improved coal pricing environment and increased
production levels by our lessees, and we expect coal industry conditions to remain strong through the remainder of 2004,” said PVR chief executive officer A. James Dearlove.
“For that reason, we are increasing our coal production and royalty revenues guidance for the year. However, due to the anticipated movement of two longwall mining operations, which was reflected in our previous guidance, second half 2004 coal production and royalty revenues are expected to be lower than the first half of the year,” he said.
PVR expect to reap coal production of 6.6 to 7.3 million tons from its properties in the third quarter, and 29 to 30 million tons for the full year.
PVR hold approximately 588 million tons of proven and probable coal reserves located on 241,000 acres in Virginia, West Virginia, New Mexico and eastern Kentucky. Lessees operate 16 surface mines and 38 underground mines – two of which are longwalls.