Natural Resource Partners LP (NYSE:NRP) Shares Still Climbing After Asset Sale

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Natural Resource Partners LP (NYSE:NRP) shares rose to $18.12 and posted an additional 0.17% gain in after-hours trading on Monday. The company has previously announced a sale of its non-operated oil and gas working interest assets for $116.1 million.

Natural Resource Partners owns, operates, manages and leases a portfolio of mineral properties in the United States, including interests in coal, trona and soda ash, crude oil and natural gas, construction aggregates, frac sand and other natural resources. It has a market cap of $219.54 million at 12.20 million shares outstanding.

Share prices of the company have traded in a 52-week range of $5.00 to $41.50 so there’s significant upside should the stock keep climbing. Shares are also currently drawing support from the pickup in natural gas and crude oil prices, spurred by risk-taking on expectations for the UK to vote remain during the June 23 EU referendum.

Natural Resource Partners also hopes to use the proceeds from the sale of non-operated oil and gas working interest assets in Williston Basin to Lime Rock Resources in order to repay existing debts. In particular, it will use $75 million to repay its oil and gas revolving credit facility in full.

In the first quarter of this year, Natural Resource Partners reported a decline in total royalty revenues to $15 million due to a 3.0 million ton reduction in sales. This was also partly caused by a drop in combined average coal royalty revenue per ton as demand for coal has been falling in the country.

Moving forward, the outlook for coal companies is still looking grim so far, especially with the recent pickup in crude oil and natural gas prices deemed temporary owing only to market sentiment rather than improving fundamentals. According to a press release, the sale of the non-operated oil and gas assets represents the exit of Natural Resource Partners from this aspect of the business.

 

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.