Rhino Flips 20% of Utica Investment to Undisclosed 3rd Party
Rhino Resource Partners is a master limited partnership (MLP) that produces coal in various basins throughout the U.S. They also invest in oil and gas acreage in both the Utica and Cana Woodford shale plays. MDN previously told you about a joint venture investment made by Rhino with both Gulfport and Wexford Capital in the Utica just last year—investing in 125,000 Utica Shale acres (see Rhino Resource Ups Investment in Utica Shale JV). Rhino has decided to “flip” part of their Utica investment and has sold a 20% portion of their ownership interest to an undisclosed third party.
The very brief and light-on-details Rhino press release from yesterday:
Rhino Resource Partners LP ("Rhino" or the "Partnership") today announced that it has closed on an agreement with a third party to sell the 20% royalty interest on its owned Utica Shale property for approximately $10.5 million. Rhino’s owned Utica Shale property was leased to a third party in March 2012 and the lease agreement stipulated that Rhino retained a 20% royalty based upon the gross proceeds received from the sale of oil and/or natural gas recovered from the leased property. The Partnership will utilize the proceeds from the sale to reduce debt, which provides further liquidity to Rhino for the development of its new Pennyrile mine in western Kentucky.
Dave Zatezalo, President and Chief Executive Officer of Rhino’s general partner, stated, "We are pleased that we have been able to complete the sale of this royalty interest since it provides us with additional liquidity for the development of our new Pennyrile mine in the Illinois Basin. We view our new Pennyrile mine as an important step in our diversification efforts to operate in multiple coal basins in the United States."*
*Rhino Resource Partners (Apr 8, 2013) – Rhino Resource Partners LP Announces Sale Of Utica Shale Royalty Interest