LEXINGTON, Ky., July 10, 2012 /PRNewswire/ -- Rhino Resource Partners LP (NYSE: RNO) ("Rhino") today is providing an operational update of its second quarter activities.
- Northern Appalachia operations produced 477 thousand tons of steam coal during the second quarter. Coal sales were 476 thousand tons and limestone sales totaled 128 thousand tons.
- With Rhino's Hopedale sales fully contracted through 2014, Rhino has had discussions with some of its Hopedale customers about extending deliveries in order to provide a better match between current production and sales volumes.
- During the quarter, Central Appalachia operations produced 171 thousand tons of steam coal and 99 thousand tons of met coal. Met coal sales totaled 109 thousand tons and steam coal sales were 218 thousand tons.
- During June, the bulk of Rhino's Central Appalachia operations were idled to reduce excess inventory, primarily of met coal. During the month, overall inventories were reduced by approximately 75,000 tons and are now close to targeted levels. Production at the idled operations resumed on July 9.
- There was a pickup in met sales activity during the quarter, with 30 thousand tons sold on a spot basis as a low quality met product. Rhino's steam customers have generally been taking contracted deliveries.
- Rhino's Castle Valley operation produced 220 thousand tons and sold 251 thousand tons during the second quarter. During June, Castle Valley had its first 100 thousand ton plus sales month since Rhino began operations at this location, allowing this operation to reduce coal inventory by approximately 32 thousand tons.
- Rhino Eastern produced 98 thousand tons of met coal during the second quarter and sales were 92 thousand tons.
- Rhino Eastern's new Eagle #3 mine is prepared for production pending final regulatory approval. At full capacity, Eagle #3 is expected to produce at a rate of approximately 490 thousand tons per year.
- While the impact of the Patriot Coal Corporation bankruptcy filing on the Rhino Eastern joint venture is uncertain at this point, Rhino expects the joint venture will continue normal operations and does not expect the bankruptcy filing to have a material negative effect on Rhino Eastern.
Oil and Gas
- Rhino's new services company is nearing completion of construction of its first drill pad in the Utica region.
- At the end of June, borrowing under Rhino's $300 million bank line was approximately $171 million. Letters of credit outstanding were $27 million.
About Rhino Resource Partners LP
Rhino Resource Partners LP is a growth-oriented limited partnership. Rhino produces metallurgical and steam coal in a variety of basins throughout the United States, it leases coal through its Elk Horn subsidiary, and it owns oil and gas acreage in the Utica and Cana Woodford plays.
Forward Looking Statements
Except for historical information, statements made in this press release are "forward-looking statements." All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Rhino expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are based on Rhino's current expectations and beliefs concerning future developments and their potential effect on Rhino's business, operating results, financial condition and similar matters. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting Rhino will be those that Rhino anticipates. Whether actual results and developments in the future will conform to expectations is subject to significant risks, uncertainties and assumptions, many of which are beyond Rhino's control or ability to predict. Therefore, actual results and developments could materially differ from Rhino's historical experience and present expectations and what is expressed, implied or forecast in these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following: decline in coal prices, which depend upon several factors such as the supply of domestic and foreign coal, the demand for domestic and foreign coal, governmental regulations, price and availability of alternative fuels for electricity generation and prevailing economic conditions; increased competition in global coal markets and declines in demand for coal; current and future environmental laws and regulations which could materially increase operating costs or limit Rhino's ability to produce and sell coal; extensive government regulation of mine operations, especially with respect to mine safety and health, which imposes significant actual and potential costs; difficulties in obtaining and/or renewing permits necessary for operations; a variety of operating risks, such as unfavorable geologic conditions, natural disasters, mining and processing equipment unavailability and failures and unexpected maintenance problems and accidents, including fire and explosions from methane; fluctuations in transportation costs or disruptions in transportation services could increase competition or impair Rhino's ability to supply coal; a shortage of skilled labor; increases in raw material costs, such as steel, diesel fuel and explosives; Rhino's ability to acquire replacement coal reserves that are economically recoverable; inaccuracies in Rhino's estimates of coal reserves and non-reserve coal deposits; existing and future laws and regulations regulating the emission of sulfur dioxide and other compounds could affect coal consumers and as a result reduce demand for coal; federal and state laws restricting the emissions of greenhouse gases; Rhino's ability to acquire or failure to maintain, obtain or renew surety bonds used to secure obligations to reclaim mined property; Rhino's dependence on a few customers and its ability to find and retain customers under favorable supply contracts; changes in consumption patterns by utilities away from the use of coal, such as resulting from low natural gas prices; disruption in supplies of coal produced by contractors operating Rhino's mines; defects in title in properties that Rhino owns or losses of any of Rhino's leasehold interests; increased labor costs or work stoppages; the ability to retain and attract senior management and other key personnel; and assumptions underlying reclamation and mine closure obligations are materially inaccurate.
Other factors that could cause Rhino's actual results to differ from its projected results are described in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Rhino undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
SOURCE Rhino Resource Partners LP