“In the partnership’s coal segment, coal royalty revenues increased 13% from the second quarter of 2005 to the third quarter, driven primarily by royalties from the Illinois basin property acquired in July 2005 and an increase in royalties from a longwall mine on a subleased property in West Virginia,” Penn chief James Dearlove said.

During the three months to September, operating income was $US22.5 million and net income was a record $US22.4 million.

Operating income from the company’s coal segment was $US16.6 million.

Coal royalties jumped to $US22.7 million for the quarter, attributable to stronger market conditions for coal resulting in higher prices and a greater percentage of production from certain price-sensitive leases.

Coal production from Penn properties increased to 8.5 million tons.

“We continue to pursue our strategy of expanding both our coal and midstream businesses by making appropriate acquisitions and facilitating organic growth,” Dearlove said.

“In keeping with this strategy, we have identified a number of growth opportunities to expand and improve operations in our core and other areas.”