|
ST. LOUIS, Dec. 31, 2002 -- Peabody Energy announced Thursday that it has formed an alliance with Penn Virginia Resource Partners, L.P., whereby Peabody is contributing coal reserves in exchange for $72.5 million in cash and 2.76 million units (15 percent) of the PVR master limited partnership.
Peabody's contributions to the alliance will consist of 40 million tons of West Virginia reserves and 80 million tons of New Mexico reserves. The company's subsidiaries will lease back the coal and pay royalties as the coal is mined. Peabody expects the transaction to be accretive to earnings, and intends to use the cash proceeds to reduce debt. Peabody's U.S. reserve position will remain at 9.1 billion tons after the transaction and its operations will be unaffected by the transaction.
"The transaction with Penn Virginia Resources allows both companies to create value by building upon their strengths," said Peabody Energy Chairman and Chief Executive Officer Irl F. Engelhardt. "Peabody will work with Penn Virginia to accomplish the growth objectives of the partnership and will have the opportunity to participate in its growth."
"We are pleased to have Peabody, the world's largest coal company, as a partner," said Penn Virginia Resources Partners Chief Executive Officer A. James Dearlove. "Our alliance with Peabody enhances our reserve position and earnings profile, improves our geographic diversification and increases our growth opportunities."
Penn Virginia Resource Partners (NYSE: PVR - News) is a growth-oriented master limited partnership that currently controls approximately 500 million tons of coal reserves in the Eastern United States.
Peabody Energy (NYSE: BTU - News) is the world's largest private-sector coal company, with 2001 sales of 194 million tons of coal and $2.6 billion in revenues. Its coal products fuel more than 9 percent of all U.S. electricity generation and more than 2 percent of worldwide electricity generation.
| 
Articles 
| View all PennWell sites | View all PennWell events
Add RSS Feed
