1144945--3/16/2006--PENN_VIRGINIA_RESOURCE_PARTNERS_L

related topics

{gas, price, oil}

{tax, income, asset}

{debt, indebtedness, cash}

{loss, insurance, financial}

{operation, natural, condition}

{cost, regulation, environmental}

{stock, price, operating}

{cost, contract, operation}

{cost, operation, labor}

{acquisition, growth, future}

{regulation, change, law}

{product, market, service}

Our business and operations are subject to a number of risks and uncertainties as described below. However, the risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we may currently deem immaterial, may become important factors that harm our business, financial condition or results of operations. If any of the following risks actually occur, our business, financial condition or results of operations could suffer. The amount of cash that we will be able to distribute on our common units principally depends upon the amount of cash we generate from our coal and natural gas midstream businesses. We may not be able to fully execute our growth strategy and our results of operations may be adversely affected if we do not successfully integrate the businesses we acquire or if we substantially increase our indebtedness and contingent liabilities. If our lessees do not manage their operations well, their production volumes and our coal royalty revenues could decrease. Coal mining operations are subject to numerous operational risks that could result in lower coal royalty revenues. A substantial or extended decline in coal prices could reduce our coal royalty revenues and the value of our coal reserves. We depend on a limited number of primary operators for a significant portion of our coal royalty revenues and the loss of or reduction in production from any of our major lessees could reduce our coal royalty revenues. Our coal business will be adversely affected if we are unable to replace or increase our reserves through acquisitions. Lessees could satisfy obligations to their customers with coal from properties other than ours, depriving us of the ability to receive amounts in excess of the minimum royalty payments. Competition within the coal industry may adversely affect the ability of our lessees to sell coal at high prices, which could reduce our coal royalty revenues. Fluctuations in transportation costs and the availability or reliability of transportation could reduce the production of coal mined from our properties. Our lessees could experience labor disruptions, and our lessees workforces could become increasingly unionized in the future. Our reserve estimates depend on many assumptions that may be inaccurate, which could materially adversely affect the quantities and value of our reserves. Any change in fuel consumption patterns by electric power generators away from the use of coal could affect the ability of our lessees to sell the coal they produce and thereby reduce our coal royalty revenues. Extensive environmental laws and regulations affecting electric power generators could have corresponding effects on the ability of our lessees to sell the coal they produce and thereby reduce our coal royalty revenues. Delays in our lessees obtaining mining permits and approvals, or the inability to obtain required permits and approvals, could have an adverse effect on our coal royalty revenues. Our lessees mining operations are subject to extensive and costly laws and regulations, and such current and future laws and regulations could increase operating costs and limit our lessees ability to produce coal, which could have an adverse effect on our coal royalty revenues. The success of our midstream business depends upon our ability to find and contract for new sources of natural gas supply. We may not be able to retain existing customers or acquire new customers, which would reduce our revenues and limit our future profitability. The profitability of our midstream business is dependent upon prices and market demand for natural gas and NGLs, which are beyond our control and have been volatile. We encounter competition from other midstream companies. Expanding our midstream business by constructing new gathering systems, pipelines and processing facilities subjects us to construction risks. If we are unable to obtain new rights-of-way or the cost of renewing existing rights-of-way increases, then we may be unable to fully execute our growth strategy and our cash flows could be reduced. We are exposed to the credit risk of our midstream customers, and nonpayment or nonperformance by our customers could reduce our cash flows. Any reduction in the capacity of, or the allocations to, us in interconnecting third-party pipelines could cause a reduction of volumes processed, which would adversely affect our revenues and cash flow. Hedging transactions may limit our potential gains and involve other risks. Accounting for Derivative Instruments and Hedging Activities, Our midstream business involves many hazards and operational risks, some of which may not be fully covered by insurance. Federal, state or local regulatory measures could adversely affect our midstream business. Our midstream business is subject to extensive environmental regulation. The Partnership and the Operating Company depend on distributions from operating subsidiaries to service their debt obligations. Penn Virginia and its affiliates have conflicts of interest and limited fiduciary responsibilities, which may permit them to favor their own interests to your detriment. Unitholders have less ability to elect or remove management or effect a change of control than holders of common stock in a corporation. The control of our general partner may be transferred to a third party without unitholder consent. Cost reimbursements due to our general partner may be substantial and will reduce our cash available for distribution to you. Our general partner s absolute discretion in determining the level of cash reserves may adversely affect our ability to make cash distributions to our unitholders. Our general partner has a limited call right that may require unitholders to sell units at an undesirable time or price. Unitholders may not have limited liability if a court finds that unitholder actions constitute control of our business. The IRS could treat us as a corporation for tax purposes, which would substantially reduce the cash available for distribution to you. You may be required to pay taxes even if you do not receive any cash distributions. Tax gain or loss on disposition of common units could be different than expected. Tax-exempt entities, regulated investment companies and foreign persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We are registered as a tax shelter. This may increase the risk of an IRS audit of us or a unitholder. We will treat each purchaser of common units as having the same tax benefits without regard to the units purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units. You will likely be subject to state and local taxes in states where you do not live as a result of an investment in our common units.

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1144945--3/16/2006--PENN_VIRGINIA_RESOURCE_PARTNERS_L_P