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Aug. 8, 2012 /PRNewswire/ -- Rhino Resource Partners LP (NYSE: RNO) ("Rhino") today is providing an update on its investment in the Utica Shale region of eastern Ohio. Rhino's initial investment in the Utica Shale was for a 10.8% interest in the original 80,000 acres acquired by Gulfport Energy and an affiliate of Wexford Capital LP. Gulfport Energy and an affiliate of Wexford Capital LP continued acquiring acreage in the Utica Shale region and have built the position to approximately 125,000 acres. Rhino has been given the opportunity from Wexford, and the board of directors of its general partner has approved, an exchange of Rhino's initial position for a pro rata interest in the full acreage position. Rhino expects to ultimately have approximately a 5% net interest in the full acreage position, or approximately 6,250 net acres.
Gulfport Energy released results of its first Utica Shale horizontal well, the Wagner 1-28H, which tested at a peak rate of 17.1 MMCF of natural gas per day and 432 barrels of condensate per day. This information can be viewed on Gulfport's website,
Dave Zatezalo, President and Chief Executive Officer of Rhino's general partner, commented, "We believe it is beneficial to the Partnership to own a piece of a larger, more diversified portfolio. This reduces geological risk and allows Rhino to participate in the more recently acquired acreage, which has the potential to be more productive. While our Utica Shale investment does not currently generate cash flow, we view it as a significant asset of the Partnership and we believe it will provide us with value in the not too distant future."
About Rhino Resource Partners LP
Rhino Resource Partners LP is a growth-oriented limited partnership. Rhino produces metallurgical and steam coal in a variety of basins throughout
the United States, it leases coal through its
Elk Horn subsidiary, and it owns oil and gas acreage in the
Cana Woodford plays.
About Wexford Capital LP
Rhino's general partner, Rhino GP LLC, is an affiliate of Wexford Capital LP ("Wexford"). Wexford is an SEC registered investment advisor with over
$5.1 billion of assets under management. Wexford has particular expertise in the energy/natural resources sector with actively managed investments in coal, oil and gas exploration and production, energy services and related sectors. Through Wexford's extensive portfolio of energy, resource and related investments, it sees an extensive flow of potential new investment opportunities, many which could be suitable for Rhino. Although Wexford has no obligation to provide such investment opportunities to Rhino, it has made available several of these investments to Rhino and expects to be in a position to continue to selectively source and underwrite for Rhino new coal, energy and related investment opportunities.
Forward Looking Statements
Except for historical information, statements made in this press release are "forward-looking statements." All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Rhino expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are based on Rhino's current expectations and beliefs concerning future developments and their potential effect on Rhino's business, operating results, financial condition and similar matters. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting Rhino will be those that Rhino anticipates. Whether actual results and developments in the future will conform to expectations is subject to significant risks, uncertainties and assumptions, many of which are beyond Rhino's control or ability to predict. Therefore, actual results and developments could materially differ from Rhino's historical experience and present expectations and what is expressed, implied or forecast in these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following: decline in coal prices, which depend upon several factors such as the supply of domestic and foreign coal, the demand for domestic and foreign coal, governmental regulations, price and availability of alternative fuels for electricity generation and prevailing economic conditions; increased competition in global coal markets and declines in demand for coal; current and future environmental laws and regulations which could materially increase operating costs or limit Rhino's ability to produce and sell coal; extensive government regulation of mine operations, especially with respect to mine safety and health, which imposes significant actual and potential costs; difficulties in obtaining and/or renewing permits necessary for operations; a variety of operating risks, such as unfavorable geologic conditions, natural disasters, mining and processing equipment unavailability and failures and unexpected maintenance problems and accidents, including fire and explosions from methane; fluctuations in transportation costs or disruptions in transportation services could increase competition or impair Rhino's ability to supply coal; a shortage of skilled labor; increases in raw material costs, such as steel, diesel fuel and explosives; Rhino's ability to acquire replacement coal reserves that are economically recoverable; inaccuracies in Rhino's estimates of coal reserves and non-reserve coal deposits; existing and future laws and regulations regulating the emission of sulfur dioxide and other compounds could affect coal consumers and as a result reduce demand for coal; federal and state laws restricting the emissions of greenhouse gases; Rhino's ability to acquire or failure to maintain, obtain or renew surety bonds used to secure obligations to reclaim mined property; Rhino's dependence on a few customers and its ability to find and retain customers under favorable supply contracts; changes in consumption patterns by utilities away from the use of coal, such as resulting from low natural gas prices; disruption in supplies of coal produced by contractors operating Rhino's mines; defects in title in properties that Rhino owns or losses of any of Rhino's leasehold interests; increased labor costs or work stoppages; the ability to retain and attract senior management and other key personnel; and assumptions underlying reclamation and mine closure obligations are materially inaccurate.