Coal and Natural Resource Management

PVR Coal and Natural Resource Management manages coal and natural resource properties, provides fee-based coal preparation and loading services, sells timber, collects oil and gas royalties, and collects wheelage fees from the transportation of coal. PVR continues to add coal reserves in multiple basins, expand its coal services and infrastructure business as well as to acquire other PTP-friendly natural resource assets, such as timber and natural gas royalties.

Business Strategy

• Continue to grow coal reserve holdings through acquisitions and investments in our existing market areas, as well as strategically entering new markets. In 2007, we acquired approximately 60 million tons of proven and probable coal reserves in two acquisitions in the Illinois Basin for an aggregate purchase price of $52 million. While our core holdings continue to be located in Appalachia, we expect to continue to add to our coal reserve holdings in the Illinois Basin in the future. We view the Illinois Basin as a growth area, both because of its proximity to power plants and because we expect future environmental regulations will require scrubbing of not only higher sulfur coal that is typically found in the Illinois Basin, but also of most coals, including lower sulfur coals from other basins.

• Expand our coal services and infrastructure business. Coal infrastructure projects typically involve long-lived, fee-based assets that generally produce steady and predictable cash flows. We own a number of such infrastructure facilities and intend to continue to look for growth opportunities in this area of operations. For example, in 2007, we acquired a preparation plant in connection with our acquisition of coal reserves. We also have an equity interest in a coal handling joint venture, which is expected to provide development opportunities for coal-related infrastructure projects.

Competitive Strengths

• Stable and predictable cash flows and limited exposure to declines in coal prices through coal royalty structure. Our coal leases provide either for royalty rates equal to the higher of a fixed minimum rate or a percentage of the gross sales price received by our lessees for the coal they produce from our reserves, or for a fixed royalty rate. This structure allows our earnings and cash flow to be stable and predictable in periods of low coal prices, while enabling us to benefit during periods of high coal prices. In addition, we do not directly bear any operational risks or production costs because we do not operate any mines.

• Experienced lessees that have long-term relationships with major customers. We lease our coal reserves principally to lessees that have substantial experience as coal mine operators, established reputations in the industry and strong relationships with major electric utilities, independent power producers and other commercial and industrial customers.

• Significant amount of low sulfur coal reserves. Compliance and low sulfur coal have captured a growing share of U.S. coal demand and have been commanding higher prices in the market place than higher sulfur coal, as a result of Phase II of the Clean Air Act Amendments taking effect. As of December 31, 2007, approximately 26% of our coal reserves met compliance standards for the Clean Air Act and approximately 39% of our coal reserves were low sulfur coal. We believe that we are well positioned to capitalize on the continuing growth in demand for low sulfur coal to produce electricity.

• Strategically located coal reserves. Our coal reserves are primarily located on or near major coal hauling railroads and inland waterways that serve Central Appalachia and the Illinois Basin. We believe that this geographic location of our coal reserves gives our lessees a transportation cost advantage that improves their competitive position and our corresponding coal royalty revenues.

• Well positioned to pursue acquisition opportunities. We have a proven track record of successfully growing our business through organic growth projects and acquisitions of coal and natural resource properties.

• Management team with successful record of managing, growing and acquiring coal and natural resource properties. We have been involved in the coal land management business in Appalachia since 1882. In addition, we have a highly capable and experienced management team that is familiar with the areas in which our lessees mine coal, the mining environment and trends in the coal industry. Our management team has an active land management style and reviews numerous acquisition opportunities and organic growth projects on an ongoing basis.

Natural Gas Midstream

PVR Midstream provides gas processing, gathering and other related natural gas services at four primary locations in Texas and Oklahoma, with a fifth system to be on line by the second quarter of 2008 in east Texas. PVR continues to identify and acquire additional gathering, processing and related assets, expand existing systems via new-well connections and processing plants, and develop ways to increase its service level to Penn Virginia Corporation’s oil and gas exploration and production business.

Business Strategy

• Expand our natural gas midstream operations through acquisitions of new gathering and processing related assets and by adding new production to existing systems. We continually seek new supplies of natural gas both to offset the natural declines in production from the wells currently connected to our systems and to increase system throughput volumes. New natural gas supplies are obtained for all of our systems by contracting for production from new wells, connecting new wells drilled on dedicated acreage and by contracting for natural gas that has been released from competitors’ systems. During 2007, we expended $38.7 million on expansion projects to allow us to capitalize on such opportunities. The expansion projects included two natural gas processing plants with a combined 140 MMcfd of inlet gas capacity, Spearman in Oklahoma, which commenced operations in February 2008, and Crossroads in East Texas, which is expected to commence operations in the second quarter of 2008. The Spearman plant created capacity in our existing Beaver natural gas processing plant for the gas that is currently bypassing the Beaver plant. The Crossroads plant will provide fee-based gas processing services to Penn Virginia Oil & Gas Corporation, or PVOG, and other producers. In addition, in April 2008, we acquired a 25% member interest in Thunder Creek for $52 million.

• Continue to exploit our relationship with Penn Virginia to our mutual advantage. Our relationship with Penn Virginia provides us with opportunities to expand our business. For example, in 2007, we acquired royalty interests in certain oil and gas leases from Penn Virginia’s oil and gas business, PVOG, for approximately $31 million. In addition, our Crossroads natural gas processing plant in East Texas will provide fee-based gas processing services to PVOG, as well as other producers, commencing in the second quarter of 2008.

Competitive Strengths

• Integrated and comprehensive natural gas midstream services. We provide natural gas gathering, compression, dehydration, treating, processing and marketing and fractionation of NGLs services to natural gas producers. We believe our ability to provide this broad range of services gives us an advantage in competing for new supplies of natural gas, because we can provide all of the services producers, marketers and others require to connect their natural gas quickly and efficiently.

• Strategically located midstream assets. Our midstream assets are primarily located in Oklahoma and the panhandle of Texas, where natural gas reserves are generally characterized as being moderately declining and long-lived. We believe that our presence in these regions and the limited availability of competitive alternatives provide us with a competitive advantage in capturing new supplies of natural gas.

• Well positioned to pursue acquisition opportunities. We have a proven track record of successfully growing our business through organic growth projects and acquisitions of natural gas midstream assets. We believe that our affiliation with Penn Virginia will continue to provide us with a competitive advantage in pursuing acquisition opportunities, particularly opportunities involving the acquisition of multiple natural resource assets.

• Management team with successful record of managing, growing and acquiring midstream assets. We have a highly capable and experienced management team that is familiar with the midstream energy industry. Our management team reviews numerous acquisition opportunities and organic growth projects on an ongoing basis.

PVR’s Business Strategy

• Maintain financial discipline and flexibility. PVR continues to increase distributions at a rate competitive with other PTPs, after reviewing the reinvestment needed to sustain long-term growth. PVR has historically funded its growth through a combination of debt and new unit issuances. PVR seeks growth opportunities that provide increases in sustainable distributable cash flow at attractive rates of return for unitholders, together with stable cash flows and the potential for additional organic growth.