|Houston, Texas, USA, 27 May 2010
-- /PRNewswire/ -- Natural Resource Partners L.P.
and International Paper
announced that they have signed a definitive agreement to form a joint venture in which Natural Resource Partners will be the managing and controlling partner with a 51% interest, including a cumulative preferred distribution from the joint venture before profit sharing commences. The new joint venture will own and manage the current leases and the further development of the more than 7 million mineral acres currently held by International Paper. Natural Resource Partners will pay International Paper approximately USD 42.5 million
at closing, which is anticipated to occur in mid-June.
"This new joint venture with International Paper will continue to diversify our assets and income stream while providing us current cash flows and upside potential from the millions of undeveloped acres included in the venture. The agreement is being structured to provide Natural Resource Partners with a reasonable return on our initial investment with significant upside potential for both parties," said Corbin J. Robertson, Jr.
, chairman and chief executive officer of Natural Resource Partners. "We are also pleased to have the current mineral management team of International Paper join Natural Resource Partners to assist in managing and developing the vast mineral holdings of the new joint venture."
"This is an attractive monetization of our noncore assets, and it allows us to share in the future value creation of the mineral rights." said Tim Nicholls
, chief financial officer of International Paper.
The more than 7 million acres are located in 31 states and consist of reserves of oil and gas, coal, and aggregates, as well as rights to develop coal bed methane, geothermal, carbon dioxide sequestration, water rights, cell towers, other precious metals, industrial minerals, and base metals. Royalties are currently generated from active leases from oil and gas, coal, aggregates, and cell towers with 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.
About Natural Resource Partners L.P.
Natural Resource Partners L.P. (NRP) is headquartered in Houston, Texas, with its operations headquartered in Huntington, West Virginia. NRP is a master limited partnership that is principally engaged in the business of 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. Further information about NRP is available at http://www.nrplp.com.
About International Paper
International Paper (NYSE:IP - News) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia, and North Africa. Its businesses include industrial and consumer packaging and uncoated papers, and complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tennessee, the company employs more than 56,000 people in more than 20 countries and serves customers worldwide. Net sales in 2009 were approximately USD 23 billion. For more information about International Paper, its products, and stewardship efforts, visit http://internationalpaper.com.