Natural Resource Partners, L.P.

NYSE: NRP

Natural Resource Partners L.P. is a limited partnership formed in April 2002 from selected properties of the WPP Group (Western Pocahontas Properties, Great Northern Properties and New Gauley Coal) and Arch Coal, Inc.  It engages principally in the business of owning and managing coal properties in the three major coal-producing regions of the United States:  Appalachia, the Illinois Basin and the Western United States.  As of December 31, 2003, Natural Resource Partners controlled approximately 1.6 billion tons of proven and probable coal reserves in eight states. 

The partnership does not operate any mines. Rather, it leases coal reserves to experienced mine operators under long-term leases that grant the operators the right to mine Natural Resource Partners' coal reserves in exchange for royalty payments.  As of December 31, 2003, Natural Resource Partners’ reserves were subject to 109 leases with 48 lessees. In 2003 the partnership’s lessees produced 44.3 million tons of coal from its properties and total revenues were $85.5 million.   Lessees are generally required to make payments to the partnership based on the higher of a percentage of the gross sales price or a fixed price per ton of coal sold, in addition to a minimum payment.

The following is a summary of Natural Resource Partners’ coal producing properties:

Property	Location	Royalty Revenue	2003 Production	Reserves at 12/31/03
		(thousands)	(million tons)
Appalachia
VICC / Alpha	Wise, Dickenson, Russell and Buchanan Counties, VA		7.0
Evans-Laviers	Breathitt, Floyd, Knott and Magoffin Counties, KY		3.0
Lynch	Harlan and Letcher Counties, KY		2.9
West Fork	Boone County, WV		2.8
Eunice	Raleigh and Boone Counties, WV		2.6
Lone Mountain	Harlan County, KY		2.5
The VICC/ Kentucky Land	Perry, Leslie and Pike Counties, KY		2.3
Others			13.0
Total		$63,855	36.0	1,464.2
Illinois Basin
Hocking-Wolford and Cummings	Sullivan County, IN		1.6
Others			1.4
Total		$3,566	3.0	22.9
Northern Powder River Basin
Western Energy	Rosebud and Treasure Counties, MT		4.3
Others			1.0
Total		$6,349	5.3	156.2
TOTAL, ALL PROPERTIES		$73,770	44.3	1,643.3

In addition to these properties, in January 2004 Natural Resource Partners purchased all of the mineral interests of BLC Properties LLC for $73 million. The acquisition included all coal, oil and gas, and mineral rights on approximately 270,000 acres containing approximately 176 million tons of coal reserves. The acquisition also included oil and gas and other mineral rights on approximately 205,000 additional acres, in which BLC retained a 35% non-participating royalty interest. The properties are located in Kentucky, Tennessee, West Virginia, Virginia and Alabama.

The coal produced by these properties goes to major utilities and power producers such as American Electric Power, Georgia Power, Southern Company, Tennessee Valley Authority, Dayton Power & Light, Louisville Gas & Electric, the Tennessee Valley Authority, Virginia Electric Power, Orlando Utilities, Public Service of Indiana, Indianapolis Power and Light, and Detroit Edison. Other customers include Dupont, U.S. Steel, and AK Steel.

In addition, Natural Resource Partners garners a small portion of its revenue—less than 2%--from oil, gas, and timber. The partnership does not own the oil, gas, and timber on most of the properties it owns. Oil, gas, and timber ownership is primarily on properties in Kentucky and West Virginias, although additional acreage came with the BLC acquisition.

The coal royalty business is highly fragmented and characterized by numerous small entities that present potentially attractive acquisition opportunities. Natural Resource Partners plans to actively pursue these opportunities to expand and diversify its reserves by acquiring additional properties that generate royalty income. To this end, it has entered into a $175 million revolving credit facility. It is also pursuing internal growth by working with its lessees to develop efficient methods to exploit its reserves and to maximize production and royalty revenues from existing properties.

For additional information, contact Ms. Kathy Hager, VP of Investor Relations at 713-751-7555 or visit the website at http://www.nrplp.com/.

Financial Information from 2003 10-K

(in thousands, except per unit amounts)

	2003	2002
Market value*	$136,200	$89,520
Current assets	$36,496	$17,307
Net property, plant & equipment	$492,160	$374,187
Total assets	$531,676	$392,719
Current liabilities	$14,744	$3,333
Long term debt	$192,650	$57,500
Partners’ capital	$308,158	$318,634
Revenues	$85,466	$13,893
Operating income	$44,069	$6,615
Net income	$36,907	$6,415
Net income/unit	$1.55	$.28
Distribution/unit	$2.15	$.51
High unit price	$41.49	$20.70
Low unit price	$29.60	$18.35
*As of June 30, 2003 and December 31, 2002.

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