10/6/10 – Joint Venture completed between Natural Resource Partners L.P. and International Paper Company
10 June 2010
Natural Resource Partners L.P.and International Paper have completed the formation of a joint venture. The venture relates to the ownership and management of as the further development of the more than 7 million mineral acres previously held by International Paper as well as current leases.
Natural Resource Partners will be the managing and controlling partner with a 51% interest, including a $4.25 million annual cumulative preferred distribution from the joint venture before profit sharing commences. In connection with the formation of the joint venture, NRP paid International Paper $42.5 million, $30 million of which was funded from NRP’s credit facility and the remainder from cash.
The more than 7 million acres are located in 31 states in the US and consist of reserves of oil and gas, coal and aggregates, as well as the rights to develop coal bed methane, geothermal, CO2 sequestration, water rights, cell towers, precious metals, industrial minerals and base metals.
Royalties are currently generated from active leases from oil and gas, coal, aggregates and cell towers with upside potential from additional leasing and development. Approximately three-fourths of the acreage is located in the Gulf Coast Region, with the second largest area being the Pacific Northwest.
Natural Resource Partners L.P.’s principal business is owning and managing mineral reserve properties. NRP owns coal reserves and coal handling and transportation infrastructure in the three major coal producing regions of the United States: Appalachia, the Illinois Basin and the Powder River Basin. In addition, the partnership owns and manages aggregate reserves in six states. International Paper is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. The company employs more than 56,000 people in more than 20 countries and in 2009 net sales were approximately $23 billion.