Penn Virginia boosts reserves in Northern Appalachia

LIMITED partnership Penn Virginia Resource Partners has acquired about 10 million tons of Pittsburgh seam coal reserves from an unidentified seller in a $US17.7 million cash deal.
Penn Virginia boosts reserves in Northern Appalachia Penn Virginia boosts reserves in Northern Appalachia Penn Virginia boosts reserves in Northern Appalachia Penn Virginia boosts reserves in Northern Appalachia Penn Virginia boosts reserves in Northern Appalachia

Courtesy Penn Virginia Resources

Donna Schmidt

The Pennsylvanian company said Thursday that the transaction for the northern West Virginia reserves will supplement a 40Mt reserve it obtained in December 2002.

PVR will fund the purchase through its revolving credit facility.

The company said it would also receive a $1 per ton increase in royalty for the 10Mt remaining on the original transaction, plus a royalty for the newly obtained reserves.

"We are pleased to have expanded our coal reserve base in Northern Appalachia, one of the premier coal producing areas in the country, and to have increased the economic attractiveness of our coal royalty properties in this area,” PVR general partner chief executive officer William Shea Jr said.

“This acquisition is expected to be immediately accretive to distributable cash flow."

PVR holds 59 million tons of coal reserves in central Appalachia, 166Mt in the Illinois Basin, 45Mt in the San Juan Basin and 26Mt in northern Appalachia.

The company held 828Mt of proven and probable reserves by the end of 2008.

The lessees produced 33.7Mt of coal and paid PVR royalties of more than $US122.8 million in that year.

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