The deal between Penn Virginia Operating Company and Begley Properties covers 102 million tons of coal reserves and resources. There are currently 14 active underground and surface operations on 126,000 acres of mineral estates with 10 lessees operating the mines.
About 75% of the expected production for the next five years is under permit, and the steam coal is utilized by southeastern US electric utilities and other industrial customers.
The oil and gas royalties to be obtained under the transaction total 100% interests from 158 wells.
"The acquisition of the Begley properties will provide significant geographic synergies with PVR's current assets in the central Appalachia coal region, will contribute to the diversification of our lessee base and will increase access to strategic rail shipping facilities to service southeast utility markets,” PVR general partner chief executive William Shea Jr said.
“We expect the Begley acquisition to be accretive to distributable cash flow per common unit for PVR unitholders within the first year following the closing of the acquisition."
While still pending customary closing conditions, Penn Virginia said the deal should close at or before the end of this year, or early in the first quarter of 2011.
The Pennsylvanian limited partnership expects to close the deal before its merger transaction with Penn Virginia GP Holdings, which was announced earlier this year and is expected to close in the first quarter next year.
