Oxford Resource Partners, LP Reports Fourth Quarter and Full Year 2012 Financial Results

    Oxford Resource Partners, LP Reports Fourth Quarter and Full Year 2012
                              Financial Results

Enhances liquidity with non-core asset sales; Partnership in negotiations on
refinancing of credit facility; Stable 2013 operating outlook in spite of
challenging market conditions

PR Newswire

COLUMBUS, Ohio, April 1, 2013

COLUMBUS, Ohio, April 1, 2013 /PRNewswire/ -- Oxford Resource Partners, LP
(NYSE: OXF) (the "Partnership" or "Oxford") today announced fourth quarter and
full year 2012 financial results.

Fourth Quarter 2012 Results

Adjusted EBITDA[1] was $8.0 million for the fourth quarter of 2012 compared to
$12.5 million for the fourth quarter of 2011. While cash coal sales revenue
per ton increased 8 percent to $50.05 for the fourth quarter of 2012 compared
to the fourth quarter of 2011, this was offset by lower sales volume from the
Partnership's Illinois Basin operations. Lower production from the Illinois
Basin operations and increased purchased coal volume and price drove a 10
percent fourth quarter increase in cash cost of coal sales per ton
year-over-year. As a result, cash margin decreased to $6.14 per ton for the
fourth quarter of 2012 from $6.60 per ton for the comparable period of 2011.
The lower sales volume, coupled with the reduced margin, contributed to the
decline in Adjusted EBITDA.

Net loss for the fourth quarter of 2012 was $5.9 million compared to a net
loss of $4.3 million for the fourth quarter of 2011. Net loss for the fourth
quarter of 2012 included $1.8 million of impairment and restructuring expenses
and a $3.9 million gain on disposal of assets. Net loss for the fourth
quarter of 2011 included a $0.1 million loss on disposal of assets. Excluding
such items, adjusted net loss would have been $7.9 million for the fourth
quarter of 2012 compared to $4.2 million for the fourth quarter of 2011. The
increase in adjusted net loss for the fourth quarter of 2012 over the
comparable period for 2011 was primarily due to the aforementioned lower sales
volume from the Illinois Basin operations and increased costs related to
purchased coal.

"We continue to focus on our core Northern Appalachian operations where we
have a very strong committed sales position for 2013 and where we have
achieved productivity improvements. While coal market conditions continue to
be challenging, the year is off to a solid start with first quarter
performance expected to show improvement over the fourth quarter," said
Oxford's President and Chief Executive Officer Charles C. Ungurean. "We also
have the ability to increase production with little incremental cost when
market demand strengthens. In the meantime, based on current market
conditions, we expect to idle production and conclude restructuring activities
at our Illinois Basin operations by year end, while pursuing additional
measures to improve our liquidity, including refinancing of our credit
facility, further cost cuts and non-core asset sales."

Full Year 2012 Results

Adjusted EBITDA was $47.9 million for the year ended December 31, 2012
compared to $58.8 million for the year ended December 31, 2011. While cash
coal sales revenue per ton increased 7 percent to $49.57 for 2012 compared to
2011, this was offset by lower sales volume from the Partnership's Illinois
Basin operations. Lower production from the Illinois Basin operations,
together with increased purchase coal volume and price and higher equipment
lease expense, drove a 9 percent yearly increase in cash cost of coal sales
per ton year-over-year. As a result, cash margin decreased slightly to $7.06
per ton for 2012 from $7.10 per ton for 2011. The lower sales volume, coupled
with the reduced margin, contributed to the decline in Adjusted EBITDA.

Net loss for 2012 was $26.1 million compared to a net loss for 2011 of $8.3
million. The net loss for 2012 included $15.7 million of impairment and
restructuring expenses and an $8.0 million gain on disposal of assets. Net
loss for 2011 included a $1.4 million loss on disposal of assets. Excluding
such items, adjusted net loss would have been $18.4 million for 2012 compared
to $7.0 million for 2011. The increase in adjusted net loss for 2012 over
2011 was primarily due to the aforementioned lower sales volume from the
Illinois Basin operations and increased costs related to purchased coal and
higher equipment lease expense.

Business Update

Oxford's projected sales volume is 98 percent committed and priced for 2013,
underscoring the strength of its long-term customer relationships and its
strategic importance in its core region. For 2014, projected sales volume is
79 percent committed (with 47 percent of the projected sales volume priced and
32 percent of the projected sales volume unpriced).

As a leading low-cost producer of thermal coal and the largest producer of
surface mined coal in Ohio, Oxford continues to focus on its core Northern
Appalachian operations. Continued rationalization of the Partnership's
Illinois Basin operations has allowed for the transfer of excess equipment to
the Northern Appalachian mines, which has reduced capital expenditure
spending. Based on current market conditions, the Partnership expects to idle
production at its Illinois Basin operations and conclude its restructuring
activities by the end of 2013.

2013 Guidance

The Partnership provides the following guidance for 2013 based on its current
industry outlook:

The Partnership expects to produce between 5.8 million tons and 6.3 million
tons and sell between 6.4 million tons and 6.9 million tons of thermal coal.
The average selling price is projected to be $50.50 per ton to $52.50 per ton,
with an anticipated average cost of $42.85 per ton to $44.85 per ton.

Adjusted EBITDA is expected to be in the range of $45 million to $50 million.

The Partnership anticipates capital expenditures of between $22 million and
$25 million.

Liquidity

As of December 31, 2012, the Partnership had $4.0 million of cash and $14.1
million of borrowing capacity available on its credit facility. During the
fourth quarter of 2012, Oxford sold certain assets, including mined out land
and excess equipment, which enhanced liquidity by $4.3 million. In addition,
due to continued weakness in the coal markets, the Partnership elected to
suspend cash distributions on both its common and subordinated units for the
fourth quarter of 2012 and going forward to further preserve
liquidity.Subsequent to year-end in February 2013, the Partnership received
a settlement payment of $2.1 million from a purchase coal supplier to settle a
contract dispute, further enhancing liquidity. The Partnership continues to
pursue additional liquidity enhancing opportunities, including sale of the
remaining excess Illinois Basin equipment and refinancing of its credit
facility.

The Partnership's current revolving credit facility matures in July 2013.
Accordingly, the Partnership has been engaged in active negotiations with its
lender group to amend and extend the current facility (both the revolver and
term loan). Because the negotiations are not yet concluded, the Partnership
reclassified the outstanding borrowings under its revolving credit facility as
a current liability in its December 31, 2012 consolidated financial
statements. The audit opinion, related to these financial statements being
filed with the SEC in the Partnership's Annual Report on Form 10-K on or
before April 2, 2013, will include a going concern emphasis paragraph related
to this matter.

Conference Call

The Partnership will host a conference call at 10:00 a.m. Eastern Time today
(April 1, 2013) to review its fourth quarter and full year 2012 financial
results. To participate in the call, dial (866) 783-2138 or (857) 350-1597
for international callers and provide passcode 62313064. The call will also
be webcast live on the Internet in the Investor Relations section of the
Partnership's website at www.OxfordResources.com.

An audio replay of the conference call will be available for seven days
beginning at 12:00 p.m. Eastern Time on April 1, 2013, and may be accessed at
(888) 286-8010 or (617) 801-6888 for international callers. The replay
passcode is 56294963.The webcast will also be archived on the Partnership's
website at www.OxfordResources.comfor 30 days following the call.

About Oxford Resource Partners, LP

Oxford Resource Partners, LP is a low-cost producer of high-value steam coal
in Northern Appalachia. Oxford markets its coal primarily to large electric
utilities with coal-fired, base-load scrubbed power plants under long-term
coal sales contracts. The Partnership is headquartered in Columbus, Ohio.

For more information about Oxford Resource Partners, LP (NYSE: OXF), please
visit www.OxfordResources.com. Financial and other information about the
Partnership is routinely posted on and accessible at www.OxfordResources.com.

This announcement is intended to be a qualified notice under Treasury
Regulation Section1.1446-4(b), with 100% of the Partnership's distributions
to foreign investors attributable to income that is effectively connected with
a United States trade or business. Accordingly, the Partnership's
distributions to foreign investors are subject to federal income tax
withholding at the highest applicable tax rate.

Forward-Looking Statements

Except for historical information, statements made in this press release are
"forward-looking statements." All statements, other than statements of
historical facts, included in this press release that address activities,
events or developments that the Partnership expects, believes or anticipates
will or may occur in the future are forward-looking statements, including the
statements and information set forth under the headings "Business Update,"
"2013 Guidance" and "Liquidity."

These statements are based on certain assumptions made by the Partnership
based on its management's experience and perception of historical trends,
current conditions, expected future developments and other factors the
Partnership's management believes are appropriate under the circumstances.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the Partnership's control, which may
cause actual results to differ materially from those implied or expressed by
the forward-looking statements. These risks, uncertainties and contingencies
include, but are not limited to, the following: productivity levels, margins
earned and the level of operating costs; weakness in global economic
conditions or in customers' industries; changes in governmental regulation of
the mining industry or the electric power industry and the increased costs of
complying with those changes; decreases in demand for electricity and changes
in coal consumption patterns of U.S. electric power generators; the
Partnership's dependence on a limited number of customers; the Partnership's
inability to enter into new long-term coal sales contracts at attractive
prices and the renewal and other risks associated with the Partnership's
existing long-term coal sales contracts, including risks related to
adjustments to price, volume or other terms of those contracts; difficulties
in collecting the Partnership's receivables because of credit or financial
problems of major customers, and customer bankruptcies, cancellations or
breaches to existing contracts or other failures to perform; the Partnership's
ability to acquire additional coal reserves; the Partnership's ability to
respond to increased competition within the coal industry; fluctuations in
coal demand, prices and availability due to labor and transportation costs and
disruptions, equipment availability, governmental regulations, including those
pertaining to carbon dioxide emissions, and other factors; significant costs
imposed on the Partnership's mining operations by extensive and frequently
changing environmental laws and regulations, and greater than expected
environmental regulations, costs and liabilities; legislation and regulatory
and related judicial decisions and interpretations including issues pertaining
to climate change and miner health and safety; a variety of operational,
geologic, permitting, labor and weather-related factors, including those
pertaining to both our mining operations and our underground coal reserves
that we do not operate; limitations in the cash distributions the Partnership
receives from its majority-owned subsidiary, Harrison Resources, LLC, and the
ability of Harrison Resources, LLC to acquire additional reserves on
economical terms from CONSOL Energy Inc. in the future; the potential for
inaccuracies in estimates of the Partnership's coal reserves, which could
result in lower than expected revenues or higher than expected costs; the
accuracy of the assumptions underlying the Partnership's reclamation and mine
closure obligations; liquidity constraints, including those resulting from the
cost or unavailability of financing due to current capital markets conditions;
risks associated with major mine-related accidents; results of litigation,
including claims not yet asserted; the Partnership's ability to attract and
retain key management personnel; greater than expected shortage of skilled
labor; the Partnership's ability to maintain satisfactory relations with
employees; and failure to obtain, maintain or renew security arrangements,
such as surety bonds or letters of credit, in a timely manner and on
acceptable terms.

The Partnership undertakes no obligation to publicly update or revise any
forward-looking statements. Readers should not place undue reliance on
forward-looking statements, which reflect management's views only as of the
date hereof. Further information on risks and uncertainties is available in
the Partnership's periodic reports filed with the U.S. Securities and Exchange
Commission or otherwise publicly disseminated by the Partnership.

[1] The definition of Adjusted EBITDA, which is a non-GAAP financial measure,
and a reconciliation thereof to Net Loss, a comparable GAAP financial measure,
are included in a table presented near the end of this press release.



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2012 AND 2011
(in thousands, except for unit data)
                               Three Months Ended       Year Ended
                               December 31,             December 31,
                               2012         2011        2012        2011
REVENUES:
  Coal sales                   $         $        $         $  
                               85,122      93,977     364,928    391,046
  Other revenue                1,376        2,316       8,599       9,331
        Total revenues         86,498       96,293      373,527     400,377
COSTS AND EXPENSES:
  Cost of coal sales:
        Produced coal          67,045       80,005      288,782     316,574
        Purchased coal         7,564        422         23,685      13,480
              Total cost of
              coal sales
              (excluding
               depreciation,
               depletion and   74,609       80,427      312,467     330,054
               amortization)
  Cost of other revenue        546          490         1,195       1,799
  Depreciation, depletion and  12,151       13,236      51,170      51,905
  amortization
  Selling, general and         4,154        3,281       15,629      13,739
  administrative expenses
  Impairment and               1,807        -           15,650      -
  restructuring expenses
  (Gain) loss on disposal of   (3,865)      113         (8,021)     1,352
  assets
        Total costs and        89,402       97,547      388,090     398,849
        expenses
(LOSS) INCOME FROM OPERATIONS  (2,904)      (1,254)     (14,563)    1,528
Interest income                3            3           10          13
Interest expense               (2,978)      (3,083)     (11,500)    (9,870)
NET LOSS                       (5,879)      (4,334)     (26,053)    (8,329)
Net income attributable to     (384)        (733)       (755)       (4,748)
noncontrolling interest
Net loss attributable to
Oxford Resource
  Partners, LP unitholders     (6,263)      (5,067)     (26,808)    (13,077)
Net loss allocated to general  (125)        (101)       (535)       (261)
partner
Net income loss allocated to   $         $        $         $  
limited partners               (6,138)     (4,966)    (26,273)   (12,816)
Net loss per limited partner
unit:
  Basic                        $        $       $       $    
                               (0.29)      (0.24)     (1.27)     (0.62)
  Diluted                      $        $       $       $    
                               (0.29)      (0.24)     (1.27)     (0.62)
Weighted average number of
limited partner units
outstanding:
  Basic                        20,735,915   20,651,471  20,711,952  20,641,127
  Diluted                      20,735,915   20,651,471  20,711,952  20,641,127
Distributions paid per unit:
  Limited partners:
        Common                 $         $        $        $   
                               0.2000      0.4375     1.5125     1.7500
        Subordinated           $       $        $        $   
                                   -    0.4375     0.6375     1.7500
  General partner              $         $        $        $   
                               0.1000      0.4375     1.0750     1.7500



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2012 AND 2011
(in thousands, except for unit data)
                                            As of December 31,
                                            2012              2011
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                 $     3,977  $     3,032
 Accounts receivable                       19,792            28,388
 Inventory                                 12,554            12,000
 Advance royalties                          4,461             1,412
 Prepaid expenses and other assets         2,046             1,226
 Assets held for sale                       6,106             -
     Total current assets                  48,936            46,058
PROPERTY, PLANT AND EQUIPMENT, NET          158,483           195,607
ADVANCE ROYALTIES, LESS CURRENT PORTION     4,861             7,945
INTANGIBLE ASSETS, NET                      1,442             1,684
OTHER LONG-TERM ASSETS                      7,177             9,971
     Total assets                          $   220,899    $   261,265
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
 Accounts payable                          $    26,893   $    26,940
 Current portion of long-term debt         96,970            11,234
 Current portion of reclamation and mine    3,869             4,553
 closure costs
 Accrued taxes other than income taxes     1,213             1,732
 Accrued payroll and related expenses      1,629             2,535
 Other liabilities                         2,491             3,822
     Total current liabilities             133,065           50,816
LONG-TERM DEBT                              47,557            132,521
RECLAMATION AND MINE CLOSURE COSTS          25,144            17,236
OTHER LONG-TERM LIABILITIES                 3,806             1,575
     Total liabilities                     209,572           202,148
COMMITMENTS AND CONTINGENCIES               -                 -
PARTNERS' CAPITAL
 Limited partners (20,751,190 and           9,593             57,160
 20,680,124 units outstanding
     as of December 31, 2012 and 2011,
     respectively)
 General partner (423,494 and 422,044 units (2,010)           (1,032)
 outstanding
     as of December 31, 2012 and 2011,
     respectively)
             Total Oxford Resource          7,583             56,128
             Partners, LP capital
 Noncontrolling interest                   3,744             2,989
     Total partners' capital               11,327            59,117
     Total liabilities and partners'        $   220,899    $   261,265
     capital



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(in thousands)
                                            Year Ended December 31,
                                            2012              2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                    $   (26,053)   $    (8,329)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation, depletion and amortization    51,170            51,905
Impairment and restructuring expenses       15,650            -
Interest rate swap adjustment to market     (144)             48
Amortization of deferred financing costs    2,175             1,600
Non-cash equity-based compensation expense  1,262             1,077
Accretion of reclamation and mine closure   1,567             1,503
costs
Amortization of below-market coal sales     (623)             (939)
contracts
(Gain) loss on disposal of assets           (8,021)           1,352
Changes in assets and liabilities:
Accounts receivable                         8,596             (280)
Inventory                                   (554)             1,731
Advance royalties                           (123)             (1,252)
Other assets                                (1,224)           (452)
Accounts payable                            (234)             (678)
Reclamation and mine closure costs          (8,966)           (4,979)
Deferred revenue                            2,300             (780)
Other liabilities                           (5,002)           1,940
Net cash from operating activities        31,776            43,467
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment          (19,122)          (33,859)
Purchase of coal reserves and land          (125)             (1,088)
Mine development costs                      (3,440)           (5,196)
Proceeds from sale of assets                12,417            849
Insurance proceeds                          400               1,096
Change in restricted cash                   1,811             (2,179)
Net cash from investing activities        (8,059)           (40,377)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on borrowings                      (10,921)          (6,231)
Advances on line of credit                  51,000            62,000
Payments on line of credit                  (39,000)          (15,000)
Debt issuance costs                         (1,086)           -
Capital contributions from partners         12                28
Distributions to partners                   (22,777)          (36,843)
Distributions to noncontrolling interest    -                 (4,901)
Net cash from financing activities        (22,772)          (947)
NET CHANGE IN CASH AND CASH EQUIVALENTS     945               2,143
CASH AND CASH EQUIVALENTS, beginning of     3,032             889
period
CASH AND CASH EQUIVALENTS, end of period    $     3,977  $     3,032





^

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA^1
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2012 AND 2011
(in thousands)
                                      Three Months Ended   Year Ended
                                      December 31,         December 31,
                                      2012       2011      2012       2011
Net loss                             $       $      $        $   
                                      (5,879)   (4,334)  (26,053)  (8,329)
Adjustments:
 Interest expense, net of interest    2,975      3,080     11,490     9,857
 income
 Depreciation, depletion and          12,151     13,236    51,170     51,905
 amortization
 Impairment and restructuring         1,807      -         15,650     -
 expenses
 (Gain) loss on disposal of assets    (3,865)    113       (8,021)    1,352
 Amortization of below-market coal    (80)       (198)     (623)      (939)
 sales contracts
 Non-cash equity-based compensation   296        223       1,262      1,077
 expense
 Non-cash reclamation and mine        378        351       1,567      3,355
 closure costs
 Non-recurring costs                  237        -         1,475      507
Adjusted EBITDA                       $      $      $       $   
                                      8,020     12,471   47,917    58,785

^1 Adjusted EBITDA is a non-GAAP financial measure used by management to gauge
operating performance. We define Adjusted EBITDA as net income or loss before
deducting interest, income taxes, depreciation, depletion, amortization,
impairment and restructuring expenses, (gain) loss on disposals of assets,
amortization of below-market coal sales contracts, non-cash equity-based
compensation expense, non-cash reclamation and mine closure costs, and certain
non-recurring costs. Although Adjusted EBITDA is not a measure of financial
performance calculated in accordance with GAAP, we believe it is useful to
management and others, such as investors and lenders, in evaluating our
financial performance without regard to financing methods, capital structure
or income taxes; our ability to generate cash sufficient to pay interest on
our indebtedness, make distributions and fund capital expenditures; and our
compliance with certain credit facility financial covenants. Because not all
companies calculate Adjusted EBITDA the same way, our calculation may not be
comparable to similarly titled measures of other companies.



RECONCILIATION OF NET LOSS TO ADJUSTED NET LOSS
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2012 AND 2011
(in thousands)
                            Three Months Ended        Year Ended
                            December 31,              December 31,
                            2012         2011         2012         2011
Net loss                   $         $         $          $   
                            (5,879)     (4,334)     (26,053)    (8,329)
Adjustment:
    Impairment and          1,807        -            15,650       -
    restructuring expenses
    (Gain) loss on          (3,865)      113          (8,021)      1,352
    disposal of assets
Adjusted net loss          $         $         $          $   
                            (7,937)     (4,221)     (18,424)    (6,977)
OPERATING STATISTICS^2
FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2012 AND 2011
(in thousands, except per ton amounts)
                            Three Months Ended        Year Ended
                            December 31,              December 31,
                            2012         2011         2012         2011
Tons sold                   1,699        2,023        7,350        8,458
Coal sales revenue per ton  $        $        $        $    
                            50.10       46.46       49.65       46.23
Below-market coal sales
contract amortization per   (0.05)       (0.10)       (0.08)       (0.11)
ton
Cash coal sales revenue     50.05        46.36        49.57        46.12
per ton
Cash cost of coal of coal   (43.91)      (39.76)      (42.51)      (39.02)
sales
Cash margin per ton         $       $       $       $     
                            6.14        6.60        7.06        7.10

^2 Per ton amounts are calculated by dividing the related amount on the
financial statements by the number of tons sold. Although per ton amounts are
not measures of performance calculated in accordance with GAAP, we believe
they are useful to management and others, such as investors and lenders, in
evaluating performance because they are widely used in the coal industry as a
measure to evaluate a company's sales performance or control over costs.
Because not all companies calculate these measures the same way, our
calculations may not be comparable to similarly titled measures of other
companies.



SOURCE Oxford Resource Partners, LP

Website: http://www.oxfordresources.com
Contact: Bradley W. Harris, (614) 643-0314, ir@OxfordResources.com