Oxford Resource Partners strives to get its customers steamed. An operator and acquirer of surface coal mines, the company produces steam coal used by power plants and other energy producers to fire steam boilers. It owns and operates about 19 surface mines in the Northern Appalachia region and the Illinois Basin. In 2009 the company, which has assets that include more than 91 million tons of proved and probable reserves, produced 5.8 million tons of coal. It serves markets in Illinois, Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia and has counted AEP, Duke Energy, and East Kentucky Power as major customers. Formed in 2008, Oxford Resource Partners filed an initial public offering (IPO) in 2010.
The company intends to use the proceeds that it raises in its IPO ($250 million) to repay debt and replenish its capital base used for general corporate purposes. Some proceeds will also be distributed to C&T Coal and AIM Oxford, which each hold an interest in the company.
Prior to the IPO's filing, AIM Oxford and C&T Coal also held an ownership interest (66% and 34%, respectively) in the company's general partner, Oxford Resources GP. AIM Oxford and C&T Coal will continue to hold a similar ownership stake in Oxford Resources GP after the IPO closes.
Oxford Resource Partners is managed and operated by directors and executives at its general partner company. The general partner will continue to manage and operate the company after the IPO closes. Additionally, Oxford Resource Partners will operate through its primary operating subsidiary, Oxford Mining Company. The subsidiary will also own the company's mining assets.
In the future, Oxford Resource Partners intends to grow by expanding its customer base and acquiring mining assets. In 2009 the company took on a mining reserve in Kentucky after it bought Phoenix Coal, which controls the Gryphon Mining Complex. The acquisition expanded the company's mining production capabilities and bolstered its overall production numbers that year. The bump in production also helped fuel an increase in the company's 2009 coal sales, which in turn contributed to a rise in the company's profitability that year.
Oxford Resource Partners brings in most of its revenue from coal sold through long-term sales contracts with its customers. Its contracts serve to bring in a predictable flow of revenue and buffer the company from market-driven fluctuations in the price of coal. – less