For the period ended December 31, the producer reported net income of $US7.2 million, versus $10.87 million in the fourth quarter of 2009 and a net loss of $46 million in the third quarter of 2010.

Revenues, conversely, were up year-on-year to $528.18 million from $503.16 million, which Patriot said was due to higher average selling prices, though the figure was offset by lower sales volume.

Sales totaled $523.19 million on 7.72 million tons of coal sold, 6Mt of which was thermal and 1.7Mt metallurgical. In the previous year, sales were 8.275Mt; Patriot cited the transport issues as well as the continued impact of increased regulatory oversight for the decline.

"This past year was one of building strength at Patriot in anticipation of improving global economies and markets,” Patriot president and chief executive Richard Whiting said.

“We emphasized the re-engineering of both surface and underground mines to address increased regulatory oversight. At the same time, we focused on increased met production and are now on a path to produce more than 11 million tons of metallurgical coal by 2013."

The company had booked more than 2Mt of new met coal sales deals for delivery this year, and at substantially higher prices than those realized last year.

“And we have more than 3 million tons of met production for delivery in 2011 remaining to be priced," Whiting added, noting that Patriot also took advantage of stronger European thermal markets in the final quarter by booking almost 1Mt of thermal exports for 2011 delivery.

Patriot chief financial officer Mark Schroeder said the company’s fourth-quarter production across its complexes exceeded the third quarter by more than 400,000 tons.

He highlighted the Federal operation, which produced more than 1.1Mt in the December quarter – a 250,000t increase over the third quarter. Production at the Wells metallurgical complex was up more than 100,000t over the same timeframe.

"Looking forward, we expect to move the Panther longwall only once in 2011 – in the second quarter – so we anticipate steadier production at this metallurgical coal complex," Schroeder said.

"Stronger performance at Panther, full production at the new Black Oak mine by mid-year, and the start-up of additional metallurgical mines are expected to result in met coal output of more than 8 million tons in 2011 and 9 million tons in 2012 … [t]his compares with the 6.9 million tons of met coal sold in 2010. These planned expansions require relatively low capital investment, as they will use incremental capacity at existing facilities."

In its outlook, Patriot projected sales volumes for 2011 of 30-32Mt, including 8-8.4Mt of met coal, a notable increase over 6.9Mt sold in 2010. Based on this volume, cost per ton is expected to be $63-67 for the Appalachia segment on higher production and new mine transitions.

Illinois Basin segment cost per ton is anticipated to be $40-43.

"Since our last earnings call, we have booked slightly more than 2 million tons of metallurgical coal at an average selling price of about $135 per ton,” Schroeder noted.

“Also included in this new business are about 500,000 tons of met coal booked in January following the extreme weather conditions in Australia. These more recent contracts are at an average price of approximately $155 per ton at the mine.”

Following those sales, Patriot has 3-3.4Mt of met coal for 2011 delivery still unpriced, more than half of which is of higher quality.

In addition, the producer has about 2Mt of thermal business during the quarter.

"Following these sales, we have just under 2 million tons of Appalachia thermal coal remaining unpriced and just under 1 million tons of Illinois Basin coal remaining unpriced for 2011 delivery," Schroeder said.

Priced thermal output for 2011 and 2012 includes 8.3Mt and 4.7Mt respectively.