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Penn Virginia Resource Partners L.P. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 6, 2009 06:30PM

Penn Virginia Resource Partners L.P. (PVR) filed Quarterly Report for the period ended 2009-06-30. Penn Virginia Resource Partners is a limited partnership formed by Penn Virginia Corporation to engage in the business of managing coal properties in the Central Appalachian region of the United States. They enter into long-term leases with experienced third- party mine operators for the right to mine their coal reserves in exchange for royalty payments. Penn Virginia Resource Partners L.P. has a market cap of $791 million; its shares were traded at around $15.27 with a P/E ratio of 12.1 and P/S ratio of 0.9. The dividend yield of Penn Virginia Resource Partners L.P. stocks is 12.3%. Penn Virginia Resource Partners L.P. had an annual average earning growth of 15% over the past 5 years.

Highlight of Business Operations:

As of December 31, 2008, we owned or controlled approximately 827 million tons of proven and probable coal reserves in Central and Northern Appalachia, the San Juan Basin and the Illinois Basin. We enter into long-term leases with experienced, third-party mine operators, providing them the right to mine our coal reserves in exchange for royalty payments. We actively work with our lessees to develop efficient methods to exploit our reserves and to maximize production from our properties. We do not operate any mines. In the six months ended June 30, 2009, our lessees produced 17.5 million tons of coal from our properties and paid us coal royalties revenues of $60.6 million, for an average royalty per ton of $3.47 ($3.31 per ton net of coal royalties expense). Approximately 82% of our coal royalties revenues in the six months ended June 30, 2009 were derived from coal mined on our properties under leases containing royalty rates based on the higher of a fixed base price or a percentage of the gross sales price. The balance of our coal royalties revenues for the respective periods was derived from coal mined on our properties under leases containing fixed royalty rates that escalate annually.

Revenues. Net coal royalties revenues increased slightly from $28.2 million in the three months ended June 30, 2008 to $28.4 million in the same period of 2009, driven by a $0.05 per ton increase in average coal royalties per ton, offset by a slight volume decrease. The average net coal royalty per ton, which represents the average coal royalties revenue per ton net of coal royalties expense, increased slightly from $3.20 per ton in the three months ended June 30, 2008 to $3.25 per ton in the same period of 2009.

Coal services revenues remained relatively constant from the three months ended June 30, 2008 to the same period of 2009. Timber revenues decreased by $0.3 million, or 21%, from $1.8 million in the three months ended June 30, 2008 to $1.5 million in the same period of 2009 primarily due to decreased sales prices resulting from weakened market conditions for furniture-grade wood products. Oil and gas royalties revenues decreased by $1.1 million, or 65%, from $1.6 million in the three months ended June 30, 2008 to $0.5 million in the same period of 2009 primarily due to decreased natural gas prices. Other revenues decreased by $0.8 million, or 36%, from $2.2 million in the three months ended June 30, 2008 to $1.4 million in the same period of 2009 primarily due to decreased wheelage income.

Expenses. Other operating expenses increased by $0.3 million, or 50%, from $0.5 million in the three months ended June 30, 2008 to $0.8 million in the same period of 2009 primarily due to an increase in expenses related to our timber operations and costs incurred under our contractual obligations for mine maintenance. Taxes other than income and depreciation, depletion and amortization expenses remained relatively constant from the three months ended June 30, 2008 to the same period of 2009. General and administrative costs increased by $0.7 million, or 23%, from $3.3 million in the three months ended June 30, 2008 to $4.0 million in the same period of 2009 primarily due to increased staffing and related employee benefit costs.

Read the The complete Report



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