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Enserco Energy Signs Long-Term Agreement With Dorchester Coal Company

Stocks in this article: BKH

DENVER, Sept. 12, 2011 /PRNewswire/ -- Enserco Energy Inc. announced today that it has entered into a long-term agreement with Dorchester Coal Company, L.P. The agreement provides Enserco the exclusive rights to acquire and market all coal acquired or produced by Dorchester in eastern Kentucky and preferential access to Dorchester's Ivel preparation plant.  

"We are very pleased to have completed this agreement with the Dorchester Coal Company," said Jeffrey D. Price, managing director of Enserco's Coal marketing and trading group. "Their Ivel Plant is strategically located in the heart of central Appalachia and provides Enserco with an excellent competitive position as we strengthen our customer base and increase our physical coal sales throughout the U.S. In addition, we will have a greater opportunity to serve international markets through more economical transportation options to ports in the East and Gulf Coast."  

"We look forward to working with an experienced organization that has proven marketing capabilities and strong customer relationships," said John P. Baugues Jr., president of Dorchester Coal Company.

Dorchester Coal Company acquired the rights to the Ivel preparation plant in Floyd County, Kentucky in 2010. The plant has a 650-ton-per-hour capacity with 120-rail car, four-hour load out on the CSX rail line as well as truck delivery capabilities. The plant can process as much as 250,000 tons of coal per month. It will primarily target the 12,500-Btu-low-sulfur market segment through the use of its own, as well as third-party, production from mining operations in the area. Output of the plant will also include stoker quality coal.  

Enserco Energy became a leading marketer of western U.S. coal in June 2010 and was the first to export Powder River Basin coal out of the Ridley Terminal in British Columbia, Canada, in early 2011.  Enserco recently expanded its coal business, which includes the sourcing, transporting and storing of physical coal, into the Illinois Basin and Central Appalachian coal producing regions.

Enserco Energy Inc.

Enserco Energy Inc., a subsidiary of Black Hills Corp. (NYSE: BKH), specializes in the optimization of energy assets in the United States and Canada. More than 60 energy professionals are responsible for transactions in the wholesale marketing and trading of natural gas, crude oil, coal and power and environmental products. Black Hills Corp. — a diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice — is based in Rapid City, S.D., with corporate offices in Denver and Papillion, Neb. Black Hills Corp. serves 762,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming, and its non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy. Black Hills' 2,100 employees partner to produce results that improve life with energy. More information is available at www.blackhillscorp.com.

Dorchester Coal Company

Dorchester Coal Company is a diversified U.S. based company located in Knoxville, TN.  The company controls over 558 million tons of estimated reserves in three of the five top coal-producing states in the U.S. including Kentucky, Montana and Pennsylvania.  The company is seeking additional expansions in Illinois and Colorado.  Production is expected to exceed 2.5 million tons in 2012 and 6.0 million tons in 2013.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This news release includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including statements regarding the partnership providing a competitive position as we strengthen our customer base and increase our physical coal sales throughout the U.S., the increased opportunity to serve international markets through more economical transportation options to ports, and the amount of coal produced and processed, are forward-looking statements. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including the factors discussed above, the risk factors described in Item 1A of Part I of our 2010 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.  New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

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