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Penn Virginia Resource Partners, L. P. Acquires Coal Property in Eastern Kentucky; New Coal Processing Facility to Be Constructed

Posted on: Thursday, 7 July 2005, 18:00 CDT

Penn Virginia Resource Partners, L. P. (NYSE:PVR) today announced the acquisition of approximately 15 million tons of coal reserves for $14 million. The coal reserves, which are predominantly low sulfur and have a high BTU content, are located in Knott County, Kentucky. The acquisition was funded with $4 million of cash and the issuance of approximately 209,000 new PVR common units.

During the third quarter of 2005, PVR expects to commence construction of a new preparation plant and unit train coal loading facility on the property, with completion expected during the second quarter of 2006 at an estimated capital expenditure of $12.5 million. The reserves have been leased to an operator who will commence mining of raw coal on a limited basis during construction of the preparation and loading facility. After completion of the facility, the operator's production from the property is expected to increase to approximately one million tons of coal per year starting in 2007.

A. James Dearlove, Chief Executive Officer of the Partnership's general partner, said, "This acquisition provides PVR with a high quality, long-lived coal asset in its core area of central Appalachia. In addition to the coal royalties, fees from the new coal preparation plant and unit train coal loading facility should provide important new revenue sources to the Partnership beginning in 2006."

Penn Virginia Resource Partners, L.P. (NYSE:PVR) is a master limited partnership formed by Penn Virginia Corporation (NYSE:PVA). The Partnership manages coal properties and related assets and operates a midstream natural gas gathering and processing business. PVR is headquartered in Radnor, PA. For more information about PVR, visit the Partnership's website at www.pvresource.com.

Forward-looking statements: Penn Virginia Resource Partners, L.P. is including the following cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Partnership. With the exception of historical matters, any matters discussed are forward-looking and, therefore, involve risks and uncertainties that could cause actual results to differ materially from projected results. These risks, uncertainties and contingencies include, but are not limited to, the following: whether or not the acquisition will be cash flow accretive; delays in the anticipated completion of the processing facility or the start up dates of coal mining operations; the volatility of coal prices; the projected demand for coal; the extent to which the amount and quality of actual production differs from estimated recoverable coal; potential equipment malfunction and repair delays; unanticipated geological problems; and the legislative or regulatory environment.

Additional information concerning these and other factors can be found in PVR's press releases and public periodic filings with the Securities and Exchange Commission, including PVR's Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 1, 2005 and subsequently filed interim reports. Except as required by applicable securities laws, PVR does not intend to update its forward-looking statements.

Source: Business Wire

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