ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, February 1, 1997 TAG: 9702030021
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Penn Virginia Corp., which owns coal, timber and natural gas properties in Wise and Lee counties, said it has completed the purchase of reserves and lease rights covering 10.5 million tons of high-quality coal used in power plants and in the production of steel.
The price was $7 million. The company bought 6 million tons of reserves and has lease rights to another 4.5 million tons, all near its existing reserves in Virginia. Mining is under way.
Penn Virginia also said it has leased to other mining companies 115 million tons of Virginia coal reserves relinquished by Westmoreland Coal Co. in May 1996. Westmoreland, once one of the state's largest coal producers, closed all its Virginia operations in 1995 and sought bankruptcy protection in December.
The lease terms with the new producers are similar to those Penn Virginia had with Westmoreland. Most of the new operations are expected to begin producing coal this year, Penn Virginia said. It said it expects the remaining 10 percent of the former Westmoreland reserves to be leased within the next several months.
Penn Virginia said it had sold most of its holdings of Westmoreland stock late last year and January. Penn Virginia, with offices in Radnor, Pa., said it expects its 1996 net income to exceed $12.2 million, compared with $10.1 million in 1995.
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