Jun 15 2010
Natural Resource Partners L.P. (NYSE: NRP) and International Paper (NYSE: IP) today announced that they have completed the formation of a joint venture to own and manage the current leases as well as the further development of the more than 7 million mineral acres previously held by International Paper.
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 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.