COLUMBUS, Ohio, March 21, 2012 /PRNewswire/ -- Oxford Resource Partners, LP (NYSE: OXF) (the "Partnership" or "Oxford") today reaffirmed that it expects to continue to pay the minimum quarterly distribution to its common unitholders and provided business and financial outlook updates for 2012.
- Oxford expects to pay its minimum quarterly distribution of $0.4375 per unit to its common unitholders throughout 2012 with the first quarter 2012 distribution expected to occur on May 15.
- Oxford's core Northern Appalachian ("NAPP") operations, which represented substantially all of 2011 adjusted EBITDA, remain strong with a fully contracted book of business for 2012.
- As noted in its Form 10-K filing for 2011, Oxford received a contract termination notice from a customer of its Illinois Basin ("ILB") operations. Oxford believes this action was taken in bad faith by the customer. Oxford has retained legal counsel and intends to aggressively pursue compensation for damages related to this termination.
- The ILB operations are being restructured, including the closing of two mines, which will substantially reduce costs and is expected to improve earnings and distributable cash flow for 2012.
- Oxford currently maintains sufficient available liquidity, and expects this liquidity position to strengthen throughout 2012. Oxford is in compliance and expects to remain in compliance with all credit facility covenants.
Oxford believes the continued strength of its NAPP operations coupled with the decisive action taken in restructuring its ILB operations will improve its liquidity while enhancing its distributable cash flow. Business Update Illinois Basin (ILB) Operations Oxford has taken and is taking the following actions with respect to its ILB operations:
- As noted in its Form 10-K filing for 2011, Oxford received a contract termination notice from a customer of its ILB operations in Kentucky. Oxford believes that this customer's action was taken in bad faith, motivated by the combination of the significant price increase that recently went into effect under the customer's supply contract and the current coal market conditions. Oxford has retained legal counsel and intends to aggressively pursue compensation for damages through all appropriate legal action.
- Oxford idled an ILB mine and reduced operations at another ILB mine associated with the terminated customer contract, resulting in an unfortunate but necessary reduction in force of approximately 120 employees in Kentucky. This followed an earlier idling of another ILB mine with a reduction in force of approximately 40 employees in Kentucky. Oxford is now proceeding to permanently close the two idled mines.
- Oxford is transferring equipment from these ILB mines to its NAPP operations, a move that is expected to enhance productivity and reduce future capital expenditures in its NAPP operations.
- Oxford is selling excess ILB equipment idled because of the mine closures and reduced mine operations, the proceeds of which will be used to strengthen its balance sheet.