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Challenging markets impact Natural Resource Partners 3Q15 results

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World Coal,

Natural Resources Partners has reported a net loss attributable to the limited partners for 3Q15 of US$586 million, (US$4.79 per unit).

3Q15 results were negatively impacted by US$614.3 million of non-cash impairment charges attributable to the limited partners, as the market value of certain partnership assets were impacted by the continuing drop in coal markets and the reductions in oil prices.

"Although our soda ash and aggregates businesses performed well again in the third quarter, low commodity prices and challenging markets continued to pressure our coal and oil and gas businesses," said Wyatt Hogan, President and Chief Operating Officer. "In this difficult operating environment, NRP remains steadfastly focused on achieving its deleveraging target of a Consolidated Debt-to-EBITDA ratio of 3.5 x by the end of 2017. We believe the actions taken this year will better position the partnership to navigate this difficult commodity price period and become a stronger company for the future."

The company reported that coal property impairments were mainly a result of idled operations in Appalachia combined with the continued declines in the coal markets and expectations of further reductions in global and domestic coal demand due to reduced global steel demand, low natural gas prices and continued regulatory pressure on the electric power generation industry.

Net income attributable to the limited partners for the third quarter, excluding impairments, declined 7.2 million (20%), compared to the same period in 2014, as contributions from the company’s investment in the soda ash business and the VantaCore operations acquired in the fourth quarter of 2014 were more than offset by declines in coal revenues, losses in oil and gas, and increased interest expense.

Distributable cash flow of US$58 million for 3Q15 was essentially the same as the previous year. Increases in cash from asset sales totalling US7.4 million was offset by US$5.6 million of maintenance capital expenditures and reduced cash from operations.

Adjusted EBITDA increased US$10 million (15%) to US$78.5 million. This increase in Adjusted EBITDA is largely due to the inclusion of VantaCore and the Sanish Field in the company’s operating results in 2015, as well as increased distributions from its soda ash investment.

Edited from press release by Harleigh Hobbs

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