Penn Virginia Adds Illinois Reserves

Penn Virginia Resource Partners L.P. (PVR - Analyst Report) announced the addition of another 26.8 million tons of coal reserves to its Illinois Basin assets. The partnership said it acquired these reserve properties from Indianapolis Power & Light Company for $13.5 million.

Penn Virginia Resource said its newly acquired reserves, the Oatsville Reserve, embraces deep minable Springfield V seam coal located on roughly 5,875 acres in Gibson and Pike counties in Indiana. Located in close proximity to 16 coal-fired power plants the Oatsville Reserve assets also have good rail and river access.

Penn Virginia’s management said the improvement in the portfolio of coal reserves in the Illinois Basin provides greater opportunity for the partnership. It said the acquired reserves are very attractive for development, and Penn Virginia is currently looking for qualified operators to lease these reserves.

Radnor, Pennsylvania-based Penn Virginia Resource manages coal and natural resource properties as well as natural gas gathering and processing businesses. The partnership’s coal properties are located in Central and Northern Appalachia, Illinois Basin and San Juan Basin.

The partnership owns and operates natural gas midstream assets located in Oklahoma and Texas, including six natural gas processing facilities having 400 MMcf/d of total capacity and approximately 4,263 miles of natural gas gathering pipelines.

Penn Virginia currently has a short-term Zacks #4 Rank (Sell). We maintain our long-term Neutral recommendation on the stock. On a competitive landscape, the partnership’s peers CONSOL Energy Inc. (CNX - Analyst Report) and Alliance Holdings GP L.P. (AHGP - Snapshot Report) with a short term Zacks #3 Rank, fare better than Penn Virginia.