Our Coal and NRM segment primarily involves the management and leasing of coal properties and the subsequent collection of royalties. Our proven and probable coal reserves increased to 827 million tons as of year-end 2008 from 818 million tons at year-end 2007.  We replaced 125 percent of the 33.7 million tons of reserves produced by lessees during 2008.  Our coal reserves are located on approximately 495,000 acres in various surface and underground mine seams located in the following basins:

• Central Appalachia Basin: properties located in eastern Kentucky, southwestern Virginia and southern West Virginia;
• Northern Appalachia Basin: properties located in northern West Virginia;
• Illinois Basin: properties located in southern Illinois and western Kentucky; and
• San Juan Basin: properties located in the four corners area of New Mexico.

In addition, we also earn revenues from other land management activities, such as selling standing timber (243,000 acres of forestland in Kentucky, Virginia and West Virginia as of December 31, 2008), leasing fee-based coal-related infrastructure facilities to certain lessees and end-user industrial plants, collecting oil and gas royalties and from coal transportation, or wheelage, fees.

Our natural gas midstream segment, PVR Midstream, is engaged in providing natural gas processing, gathering and other related services.  We own and operate natural gas midstream assets located in Oklahoma and Texas. Our natural gas midstream business derives revenues primarily from gas processing contracts with natural gas producers and from fees charged for gathering natural gas volumes and providing other related services.

We own and operate natural gas midstream assets, including five natural gas processing facilities having 300 million cubic feet per day (MMcfd) of total capacity and over 4,000 miles of natural gas gathering pipelines.   In July 2009, we announced a 60 MMcfd gas processing and residue pipeline capacity acquisition and a 40 MMcfd expansion at our Panhandle System, our largest system.  As a result, by the end of August, we will have expanded our gas processing capacity by one-third to 400 MMcfd located in the following systems:

• Panhandle: gathering and processing facilities in the Texas/Oklahoma panhandle area;
• Crossroads: gathering and processing facilities in East Texas;
• Crescent: gathering and processing facilities in central Oklahoma;
• Arkoma: gathering system in eastern Oklahoma;
• North Texas Gas Gathering (NTGG): gathering and pipeline facilities in the Fort Worth Basin; and
• Hamlin: gathering and processing facilities in west central Texas.

In addition, we own a 25% member interest in Thunder Creek Gas Services, LLC (“Thunder Creek”), a joint venture that gathers and transports coalbed methane in Wyoming’s Powder River Basin. We also own a natural gas marketing business, which aggregates third-party volumes and sells those volumes into intrastate pipeline systems and at market hubs accessed by various interstate pipelines.