Westmoreland Amends ROVA Contracts, Creates Cash Savings Through 2019
29 December 2016 - 8:42AM
Westmoreland Coal Company (Nasdaq:WLB) today announced that it
amended its power supply agreement with Dominion Virginia Power, a
subsidiary of Dominion (NYSE:D). Beginning March 1, 2017,
Westmoreland will create cash savings as it will no longer be
required to operate the Roanoke Valley Power Facility
(“ROVA”). Under the amendment, Westmoreland will begin to
provide the required contracted level of energy to Dominion through
power purchase contracts, in lieu of providing it by operating
ROVA.
“Amending the ROVA contract is a successful step toward our goal
of reducing the impact of our non-core assets,” said Kevin
Paprzycki, Westmoreland’s Chief Executive Officer. “This
amendment allows us to meet our future capacity obligations through
purchase contracts, instead of running our ROVA facility. By
no longer operating ROVA, we will reduce our projected cash flow
burn by $13 million through March 2019, with the most meaningful
cash savings occurring in 2019. Additionally, we are now more
aggressively pursuing the sale of the remaining physical
facility. I’d like to thank the team for their great efforts
in 2016 which resulted in this transaction.”
Westmoreland continues to anticipate the release during 2017 of
nearly half of the $22 million in restricted cash in place at
September 30, 2016. This restricted cash serves as collateral
for existing ROVA power contracts. Recent higher power prices
are expected to lower the required cash collateral
levels.
About Westmoreland Coal Company
Westmoreland Coal Company is the oldest independent coal company
in the United States. Westmoreland’s coal operations include
surface coal mines in the United States and Canada, underground
coal mines in Ohio and New Mexico, a char production facility, and
a 50% interest in an activated carbon plant. Westmoreland
also owns the general partner of and a majority interest in
Westmoreland Resource Partners, LP, a publicly-traded coal master
limited partnership (NYSE:WMLP). Its power operations include
ownership of the two-unit ROVA coal-fired power plant in North
Carolina. For more information, visit
www.westmoreland.com.
Cautionary Note Regarding Forward-Looking
Statements
Forward-looking statements are based on Westmoreland’s current
expectations and assumptions regarding its business, the economy
and other future conditions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict.
Actual results may differ materially from those contemplated by the
forward-looking statements. Westmoreland cautions you against
relying on any of these forward-looking statements. They are
statements neither of historical fact nor guarantees or assurances
of future performance. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include political, economic, business, competitive,
market, weather and regulatory conditions.
Any forward-looking statements made by Westmoreland in this news
release speak only as of the date on which it was made.
Westmoreland undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
For further information please contact
Gary Kohn, Interim CFO and Treasurer
1-720-354-4467
gkohn@westmoreland.com