Oxford Resource Partners LP (Form: 10-Q, Received: 11/07/2012 16:07:38)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-34815

Oxford Resource Partners, LP

(Exact name of registrant as specified in its charter)

Delaware

77-0695453

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

41 South High Street, Suite 3450, Columbus, Ohio 43215

(Address of Principal Executive Offices, Including Zip Code)

(614) 643-0337

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” and “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 1, 2012, 10,454,338 common units and 10,280,380 subordinated units were outstanding. The common units trade on the New York Stock Exchange under the ticker symbol “OXF.”

TABLE OF CONTENTS


		Page
	PART I. FINANCIAL INFORMATION

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		1

	Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011		1

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011		2

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011		3

	Condensed Consolidated Statements of Partners’ Capital for the Nine Months Ended September 30, 2012 and 2011		4

	Notes to Condensed Consolidated Financial Statements		5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		18

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		32

ITEM 4.	CONTROLS AND PROCEDURES		32

	PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS		32

ITEM 1A.	RISK FACTORS		32

ITEM 4.	MINE SAFETY DISCLOSURES		32

ITEM 6.	EXHIBITS		32

PART I. FINANCIAL INFORMATION

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except for unit data)


	September 30,			December 31,
	2012			2011
ASSETS
Cash and cash equivalents	$	6,251		$	3,032
Accounts receivable		30,634			28,388
Inventory		12,478			12,000
Advance royalties - current portion		1,934			1,412
Prepaid expenses and other current assets		3,078			1,226
Assets held for sale		6,665			—

Total current assets		61,040			46,058
Property, plant and equipment, net		157,233			195,607
Advance royalties less current portion		6,824			7,945
Other long-term assets		8,136			11,655

Total assets	$	233,233		$	261,265

LIABILITIES
Accounts payable	$	27,133		$	26,940
Current portion of long-term debt		114,974			11,234
Current portion of reclamation and mine closure costs		5,075			4,553
Accrued taxes other than income taxes		1,340			1,732
Accrued payroll and related expenses		2,220			2,535
Other current liabilities		2,220			3,822

Total current liabilities		152,962			50,816

Long-term debt, less current portion		43,057			132,521
Reclamation and mine closure costs, less current portion		16,525			17,236
Other long-term liabilities		1,644			1,575

Total liabilities		214,188			202,148

Commitments and contingencies

PARTNERS’ CAPITAL
Limited partner unitholders (20,734,718 and 20,680,124 units outstanding as of September 30, 2012 and December 31, 2011, respectively)		17,532			57,160
General partner unitholder (422,698 and 422,044 units outstanding as of September 30, 2012 and December 31, 2011, respectively)		(1,847	)		(1,032	)

Total Oxford Resource Partners, LP capital		15,685			56,128
Noncontrolling interest		3,360			2,989

Total partners’ capital		19,045			59,117

Total liabilities and partners’ capital	$	233,233		$	261,265

See accompanying notes to condensed consolidated financial statements.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except for unit and per unit data)


	Three Months Ended						Nine Months Ended
	September 30						September 30
	2012			2011			2012			2011
REVENUE
Coal sales	$	83,931		$	94,919		$	246,964		$	262,093
Transportation revenue		11,096			12,867			32,842			34,976
Other revenue		2,187			2,202			7,223			7,015

Total revenue		97,214			109,988			287,029			304,084
COSTS AND EXPENSES
Cost of coal sales:
Produced coal		62,025			73,193			188,895			201,593
Purchased coal		6,274			3,143			16,121			13,058

Total cost of coal sales (excluding depreciation, depletion and amortization)		68,299			76,336			205,016			214,651
Cost of transportation		11,096			12,867			32,842			34,976
Cost of other revenue		274			248			649			1,309
Depreciation, depletion and amortization		13,110			13,323			39,019			38,669
Selling, general and administrative expenses		3,901			3,114			11,475			10,458
Impairment and restructuring charges		206			—			13,843			—
(Gain) loss on disposal of assets		357			516			(4,156	)		1,239

Total costs and expenses		97,243			106,404			298,688			301,302

(LOSS) INCOME FROM OPERATIONS		(29	)		3,584			(11,659	)		2,782
Interest income		1			5			7			10
Interest expense		(3,012	)		(2,431	)		(8,522	)		(6,787	)

NET (LOSS) INCOME		(3,040	)		1,158			(20,174	)		(3,995	)
Net income attributable to noncontrolling interest		(274	)		(1,134	)		(371	)		(4,015	)

NET (LOSS) INCOME ATTRIBUTABLE TO OXFORD RESOURCE PARTNERS, LP UNITHOLDERS	$	(3,314	)	$	24		$	(20,545	)	$	(8,010	)

Net loss allocated to general partner	$	(66	)	$	—		$	(410	)	$	(160	)

Net (loss) income allocated to limited partners	$	(3,248	)	$	24		$	(20,135	)	$	(7,850	)

Net loss per limited partner unit:
Basic	$	(0.16	)	$	0.00		$	(0.97	)	$	(0.38	)

Diluted	$	(0.16	)	$	0.00		$	(0.97	)	$	(0.38	)

Weighted average number of limited partner units outstanding:
Basic		20,717,734			20,635,288			20,702,042			20,631,055

Diluted		20,717,734			20,706,794			20,702,042			20,631,055

Distributions paid per unit
Limited partner unitholders:
Common	$	0.4375		$	0.4375		$	1.3125		$	1.3125
Subordinated	$	0.1000		$	0.4375		$	0.6375		$	1.3125
General partner unitholders	$	0.2688		$	0.4375		$	0.9750		$	1.3125

See accompanying notes to condensed consolidated financial statements.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Nine Months Ended
	September 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to unitholders	$	(20,545	)	$	(8,010	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation, depletion and amortization		39,019			38,669
Impairment charges		11,645			—
Interest rate swap and fuel contract adjustment to market		(194	)		76
Loan fee amortization		1,527			1,173
Non-cash equity-based compensation expense		966			854
Advance royalty recoupment		1,064			1,050
Accretion of reclamation and mine closure costs		1,189			1,153
(Gain) loss on disposal of property and equipment		(4,156	)		1,239
Noncontrolling interest in subsidiary earnings		371			4,015
Changes in assets and liabilities:
Accounts receivable		(2,246	)		(5,356	)
Inventory		(478	)		251
Other assets		(2,212	)		(639	)
Accounts payable and other liabilities		1,284			4,331
Reclamation and mine closure costs		(6,399	)		(3,267	)
Provision for below-market contracts and deferred revenue		(543	)		(1,357	)

Net cash from operating activities		20,292			34,182
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(16,547	)		(27,237	)
Purchase of coal reserves and land		(51	)		(1,124	)
Mine development costs		(2,909	)		(3,182	)
Advance royalties		(2,061	)		(484	)
Proceeds from sale of property and equipment		8,543			—
Change in restricted cash		3,092			(2,121	)

Net cash from investing activities		(9,933	)		(34,148	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on borrowings		(9,417	)		(4,728	)
Advances on line of credit		41,000			51,000
Payments on line of credit		(17,000	)		(15,000	)
Credit facility issuance costs		(1,086	)		—
Capital contributions from partners		7			12
Distributions to partners		(20,644	)		(27,629	)
Distributions to noncontrolling interest		—			(3,920	)

Net cash from financing activities		(7,140	)		(265	)

Net increase (decrease) in cash		3,219			(231	)
CASH AND CASH EQUIVALENTS, beginning of period		3,032			889

CASH AND CASH EQUIVALENTS, end of period	$	6,251		$	658

See accompanying notes to condensed consolidated financial statements.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

(in thousands, except for unit data)


	Limited Partner																				Non-			Total
	Common					Subordinated					Total					General Partner					controlling			Partners’
	Units		Capital			Units		Capital			Units		Capital			Units		Capital			Interest			Capital
Balance at December 31, 2010		10,330,603	$	146,078			10,280,380	$	(40,394	)		20,610,983	$	105,684			420,633	$	(63	)	$	3,142		$	108,763
Net (loss) income				(3,939	)				(3,911	)				(7,850	)				(160	)		4,015			(3,995	)
Partners’ contributions																	495		12						12
Partners’ distributions				(13,588	)				(13,489	)				(27,077	)				(552	)		(3,920	)		(31,549	)
Equity-based compensation				854										854											854
Issuance of units to LTIP participants		27,825		(405	)							27,825		(405	)										(405	)

Balance at September 30, 2011		10,358,428	$	129,000			10,280,380	$	(57,794	)		20,638,808	$	71,206			421,128	$	(763	)	$	3,237		$	73,680

Balance at December 31, 2011		10,399,744	$	121,911			10,280,380	$	(64,751	)		20,680,124	$	57,160			422,044	$	(1,032	)	$	2,989		$	59,117
Net (loss) income				(10,140	)				(9,995	)				(20,135	)				(410	)		371			(20,174	)
Partners’ contributions																	654		7						7
Partners’ distributions				(11,937	)				(8,295	)				(20,232	)				(412	)					(20,644	)
Equity-based compensation				966										966											966
Issuance of units to LTIP participants		54,594		(227	)							54,594		(227	)										(227	)

Balance at September 30, 2012		10,454,338	$	100,573			10,280,380	$	(83,041	)		20,734,718	$	17,532			422,698	$	(1,847	)	$	3,360		$	19,045

See accompanying notes to condensed consolidated financial statements.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In our opinion, the condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the condensed consolidated financial statements are considered to be of a normal recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”) and filed with the U.S. Securities and Exchange Commission (the “SEC”).

NOTE 1:

ORGANIZATION AND PRESENTATION

Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements (Unaudited)

•

“We,” “us,” “our,” or the “Partnership” means the business and operations of Oxford Resource Partners, LP, the parent entity, as well as its consolidated subsidiaries.

•

“ORLP” means Oxford Resource Partners, LP, individually as the parent entity, and not on a consolidated basis.

•

Our “GP” means Oxford Resources GP, LLC, the general partner of Oxford Resource Partners, LP.

•

“Oxford” means our predecessor, Oxford Mining Company.

Organization

We are a low-cost producer of high-value steam coal. We focus on acquiring steam coal reserves that we can efficiently mine with modern, large scale equipment. Our reserves and operations are strategically located to serve our primary market area of Illinois, Indiana, Kentucky, Ohio, Pennsylvania and West Virginia. These coal reserves are mined by our subsidiaries, Oxford Mining Company, LLC (“Oxford Mining”), Oxford Mining Company - Kentucky, LLC and Harrison Resources, LLC (“Harrison Resources”).

We are managed by our GP and all executives, officers and employees who provide services to us are employees of our GP. Charles C. Ungurean, the President and Chief Executive Officer of our GP and a member of our GP’s board of directors (“Mr. C. Ungurean”), and Thomas T. Ungurean, the former Senior Vice President, Equipment, Procurement and Maintenance of our GP (“Mr. T. Ungurean”), are the co-owners of one of our limited partners, C&T Coal, Inc. (“C&T Coal”).

We were formed in August 2007 to acquire all of the ownership interests in Oxford from C&T Coal. Immediately following the acquisition, C&T Coal and AIM Oxford Holdings, LLC (“AIM Oxford”) held a 34.3% and 63.7% limited partner interest in ORLP, respectively, and our GP owned a 2% general partner interest. Also at that time, the members of our GP were AIM Oxford with a 65% ownership interest and C&T Coal with a 35% ownership interest. After taking into account their indirect ownership of ORLP through our GP, AIM Oxford held a 65% total interest in ORLP and C&T Coal held a 35% total interest in ORLP.

On July 19, 2010, we completed the closing of the initial public offering of our common units. Immediately prior to the offering, we executed a unit split whereby the unitholders at that time received approximately 1.82097973 units in exchange for each unit they held at that time. As a result of these transactions, AIM Oxford’s and C&T Coal’s ownership of the Partnership, as of December 31, 2010, was 36.82% and 18.74%, respectively, with our GP’s ownership being 2.00%. The remaining 42.44% was held by the general public and our Long-Term Incentive Plan (“ LTIP”) participants. AIM Oxford and C&T Coal owned 65.98% and 33.58%, respectively, of our GP as of December 31, 2010, with the remaining 0.44% interest therein being owned by Jeffrey M. Gutman, our Senior Vice President, Chief Financial Officer and Treasurer through October 1, 2012.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 1:

ORGANIZATION AND PRESENTATION (continued)

On February 28, 2011, each of AIM Oxford and C&T Coal sold a portion of our common units held by them under Rule 144 in private transactions. Further, in the normal course of business during both 2011 and 2012, there have been issuances of our common units to participants in our LTIP. As a result of these transactions, AIM Oxford’s and C&T Coal’s ownership of the Partnership, as of September 30, 2012, was 35.55% and 18.09%, respectively, with our GP’s ownership being 2.00%. The remaining 44.36% was held by the general public and our LTIP participants. AIM Oxford and C&T Coal own 65.65% and 33.41%, respectively, of the ownership interests in our GP as of September 30, 2012, with the remaining ownership interests therein being a 0.47% ownership interest held by Jeffrey M. Gutman, our Senior Vice President, Chief Financial Officer and Treasurer through October 1, 2012, and a 0.47% ownership interest held by Daniel M. Maher, our Senior Vice President, Chief Legal Officer and Secretary.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts and operations of the Partnership and its consolidated subsidiaries and are prepared in conformity with US GAAP.

We own a 51% interest in Harrison Resources and are therefore deemed to have control for purposes of US GAAP. As a result, we consolidate all of Harrison Resources’ accounts with all material intercompany transactions and balances being eliminated in our consolidated financial statements. The 49% portion of Harrison Resources that we do not own is reflected as “Noncontrolling interest” in our condensed consolidated balance sheets and statements of operations.

NOTE 2:

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

There were no changes to our significant accounting policies from those disclosed in the audited consolidated financial statements and notes thereto contained in the Annual Report.

Reclassifications

Certain prior-year amounts have been reclassified in our condensed consolidated statements of operations to conform with current-year classifications. These reclassifications are:

•

Including the cost of purchased coal of $3.1 million and $13.1 million in “Cost of coal sales” rather than their being shown separately for the three and nine month periods ended September 30, 2011, respectively.

•

Reclassifying $0.2 million and $1.3 million to “Cost of other revenue” from “Cost of coal sales” for the three and nine month periods ended September 30, 2011, respectively.

•

Separately presenting $0.5 million and $1.2 million in “(Gain) loss on disposal of assets” rather than including them in “Cost of coal sales” for the three and nine months ended September 30, 2011, respectively.

Also, “Accretion of reclamation and mine closure costs” is now presented as a separate line item in our condensed consolidated statements of cash flows.

New Accounting Standards Adopted

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). This guidance amends certain accounting and disclosure requirements related to fair

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 2:

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

value measurements to ensure that fair value has the same meaning in US GAAP and in IFRS and that their respective fair value measurement and disclosure requirements are the same. This guidance is effective for public entities during interim and annual periods beginning after December 15, 2011. The adoption of this guidance in 2012 did not have a material effect on our consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income – Presentation of Comprehensive Income , which amends current comprehensive income guidance. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. Instead, comprehensive income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. This guidance is effective for public companies during interim and annual periods beginning after December, 15, 2011. The adoption of this guidance in 2012 did not affect our consolidated financial statements.

NOTE 3:

IMPAIRMENT AND RESTRUCTURING CHARGES

In March 2012, we received a termination notice from a customer related to an 0.8 million ton per year coal supply contract fulfilled from our Illinois Basin operations. In response, we idled one Illinois Basin mine and the related wash plant, closed our Illinois Basin lab, reduced operations at two other mines, terminated a significant number of employees, and substituted purchased coal for mined and washed coal on certain sales contracts.

In the second quarter of 2012, we further adjusted our Illinois Basin operations, varying the mines that were idled to best manage strip ratio impacts and other costs. We also resumed operations at the wash plant on a limited basis in June.

In the third quarter of 2012, we idled one additional mine and resumed production at a second mine for a limited period of time that allowed us to meet our coal supply commitments. As of September 30, 2012, both of these mines were being prepared for market deferment. The wash plant continued limited production through mid-September and has again been idled. We anticipate that the restructuring related to our Illinois Basin operations will be completed by the end of the first quarter of 2013.

In addition to these actions, we continue to redeploy certain Illinois Basin equipment to our Northern Appalachia operations. We are also seeking to sell certain excess mining equipment from these idled operations.

For the three and nine months ended September 30, 2012, we recognized impairment and restructuring charges of $0.2 million and $13.8 million, respectively, related to the restructuring of our Illinois Basin operations. We expect to incur $0.7 million of additional costs throughout the remainder of 2012 and the first quarter of 2013 as we complete the restructuring.

Impairment Charges

As a result of the restructuring described above, we recorded asset impairment charges of $11.6 million during the nine months ended September 30, 2012, none of which were recorded in the third quarter. These non-cash charges related to coal reserves, mine development assets and certain mining equipment (the “Impaired Assets”).

In determining our impairment charges, we utilized market prices for similar assets and discounted projected future cash flows to determine the fair value of the Impaired Assets. Our discounted projected future cash flows are based on financial forecasts developed internally for planning purposes. These projections incorporate certain assumptions, including future costs and sales trends, estimated costs to sell and our expected net realizable values for those Impaired Assets. In accordance with applicable accounting guidance under US GAAP, those Impaired Assets that we plan to sell, and that are currently ready for sale and are no longer in production, are presented separately as current assets held for sale in our condensed consolidated balance sheet as of September 30, 2012. These assets are no longer being depreciated or amortized. Impaired Assets that do not meet the criteria to be

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 3:

IMPAIRMENT AND RESTRUCTURING CHARGES (continued)

classified as held for sale remain in property, plant and equipment. These assets are recorded at carrying value, after taking into account the impairment.

Restructuring Charges

Restructuring charges represent expenses directly related to the restructuring that do not provide future economic benefit. Restructuring charges related to our Illinois Basin operations totaling $0.2 million and $2.2 million were recorded during the three and nine months ended September 30, 2012, respectively. These charges included employee termination costs for approximately 160 terminated employees, professional and legal fees, and transportation costs associated with moving idled equipment to our Northern Appalachian operations. The liabilities related to the restructuring are included in “Other current liabilities” on our condensed consolidated balance sheet as of September 30, 2012.

Restructuring accrual activity, combined with a reconciliation to “Impairment and restructuring charges” as set forth in our condensed consolidated statements of operations, is summarized below:


	Nine Months Ended September 30, 2012					September 30, 2012
	Expense		Payments			Liability
Severance and other termination costs	$	760	$	(681	)	$	79
Professional and legal fees		974		(880	)		94
Equipment relocation costs		464		(444	)		20

Total restructuring charges		2,198	$	(2,005	)	$	193

Asset impairment (non-cash)		11,645

Total impairment and restructuring charges	$	13,843

The following table summarizes the total expenses expected to be incurred for the impairment and restructuring charges over the course of the restructuring.


	Total Expected
	Expenses
Severance and other termination costs	$	799
Professional and legal fees		1,427
Equipment relocation costs		683
Asset impairment (non-cash)		11,645

Total impairment and restructuring charges	$	14,554

NOTE 4:

INVENTORY

Inventory consisted of the following:


	September 30,		December 31,
	2012		2011
Coal	$	5,312	$	4,346
Fuel		1,950		2,013
Supplies and spare parts		5,216		5,641

Total inventory	$	12,478	$	12,000

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 5:

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net of accumulated depreciation, depletion and amortization, consisted of the following:


	September 30,			December 31,
	2012			2011
Property, plant and equipment, gross
Land	$	3,357		$	3,188
Coal reserves		51,665			55,124
Mine development costs		35,896			30,223

Total property		90,918			88,535
Buildings and tipple		2,133			2,133
Machinery and equipment		199,933			218,715
Vehicles		4,572			4,781
Furniture and fixtures		1,669			1,619
Railroad sidings		160			160

Total property, plant and equipment, gross		299,385			315,943
Less: accumulated depreciation, depletion and amortization		(142,152	)		(120,336	)

Total property, plant and equipment, net	$	157,233		$	195,607

Assets held for sale totaling $6.7 million have been reclassified to current assets on our September 30, 2012 consolidated balance sheet and are not included in the amounts above. Assets held for sale are no longer being depreciated or amortized.

The amounts of depreciation expense related to owned and leased fixed assets, depletion expense related to owned and leased coal reserves, and amortization expense related to mine development costs for the respective periods are set forth below:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Expense type:
Depreciation	$	8,450	$	9,198	$	26,727	$	27,667
Depletion		1,301		1,398		4,010		4,425
Amortization		3,319		2,659		8,100		6,373

In April 2012, we sold oil and gas mineral rights on 1,250 acres of land for $6.3 million, which is recorded in “Gain/loss on disposal of assets.” As part of that transaction, we retained royalty rights equivalent to a 20% net revenue interest once the wells are producing. As of September 30, 2012, none of the wells were drilled and producing.

NOTE 6:

RECLAMATION AND MINE CLOSURE COSTS

Our reclamation and mine closure costs arise from the Surface Mining Control and Reclamation Act (“SMCRA”) and similar state statutes, which require that mine property be restored in accordance with specified standards and an approved reclamation plan. The required reclamation activities to be performed are outlined in our mining permits. These activities include reclaiming the pit and support acreage, as well as stream mitigation.

As of September 30, 2012, we had liabilities totaling $21.6 million recorded for reclamation and mine closure costs, including amounts reported as current liabilities. While the precise amount of these future costs cannot be determined with absolute certainty, we estimate that, as of September 30, 2012, the aggregate undiscounted cost of final mine closure was $25.0 million.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 6:

RECLAMATION AND MINE CLOSURE COSTS (continued)

The following table presents the activity affecting the liability for reclamation and mine closure costs for the respective periods:


	Nine Months Ended			Twelve Months Ended
	September 30, 2012			December 31, 2011
Beginning balance	$	21,789		$	12,987
Accretion expense		1,189			1,503
Payments		(6,399	)		(6,443	)
Revisions in estimated cash flows		5,021			13,742

Total reclamation and mine closure costs		21,600			21,789
Less current portion		5,075			4,553

Noncurrent liability	$	16,525		$	17,236

For the nine months ended September 30, 2012, revisions in discounted estimated cash flows increased the reclamation and mine closure costs liability by $5.0 million. Of this amount, $1.9 million was related to four newly-opened mines and $3.0 million was related to reclamation work in progress at recently closed mines. Adjustments to the liability for reclamation and mine closure costs due to such revisions generally result in a corresponding adjustment to the related mine development asset for new mines and to amortization expense for closed mines.

In 2011, revisions in discounted estimated cash flows resulted in a net increase in the reclamation and mine closure costs of $13.7 million and were primarily related to eight new mines, as well as revisions to estimates of the expected costs for stream and wetland mitigation as regulatory requirements continue to evolve. Adjustments to the liability for reclamation and mine closure costs due to such revisions generally result in a corresponding adjustment to the related mine development asset for new mines.

NOTE 7:

LONG-TERM DEBT

Credit Facility

In connection with our initial public offering in July 2010, we entered into an agreement (the “Credit Agreement”) for a $175 million credit facility with Citicorp USA, Inc., as Administrative Agent, Citibank, N.A., as Swing Line Bank, Barclays Bank PLC and The Huntington National Bank, as Co-Syndication Agents, Fifth Third Bank and Comerica Bank, as Co-Documentation Agents, and the lenders party thereto. The Credit Agreement became effective July 19, 2010 and provides for a $60 million term loan and a $115 million revolving credit line. We are required to make quarterly principal payments of $1.5 million on the term loan commencing on September 30, 2010 and continuing until maturity in July 2014, when the remaining balance is to be paid. The $115 million revolving credit line matures in July 2013. Accordingly, the $104 million outstanding on the revolver as of September 30, 2012 has been classified as a current liability. Borrowings under the Credit Agreement bear interest at a variable rate per annum equal to, at our option, the London Interbank Offered Rate (“LIBOR”) or the Base Rate plus the Applicable Margin (Base Rate and Applicable Margin are defined in the Credit Agreement).

The Credit Agreement contains customary covenants, including restrictions on our ability to incur additional indebtedness, make certain investments, make distributions to our unitholders, make ordinary course dispositions of assets over predetermined levels and enter into equipment leases, as well as enter into a merger or sale of all or substantially all of our property or assets, including the sale or transfer of interests in our subsidiaries. The Credit Agreement also requires compliance with certain financial covenants, including limiting our leverage and interest coverage ratios, as well as capping capital expenditures in any fiscal year to certain predetermined amounts. Borrowings under the Credit Agreement are secured by a first-priority lien on and security interest in substantially all of our assets.

In June 2012, we executed an amendment to the Credit Agreement which is applicable for the remaining term of the Credit Agreement and which (i) modified the leverage ratio, (ii) authorized the sale of certain Kentucky assets, and (iii) allows quarterly distributions at minimum levels and additionally at certain higher levels as long as

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 7:

LONG-TERM DEBT (continued)

specified liquidity thresholds are maintained after giving effect to the distribution. In connection with the amendment, we paid the consenting lenders a non-refundable amendment fee equal to 0.50% of their then outstanding loan commitments under the Credit Agreement. The amendment fee was capitalized and is being amortized over the remaining term of the Credit Agreement.

As of September 30, 2012, we were in compliance with all covenants under the terms of the Credit Agreement.

NOTE 8:

FAIR VALUE MEASUREMENTS

Financial instruments measured at fair value on a recurring basis are summarized below:


	Fair Value Measurements as of September 30, 2012
	Quoted Prices in Active Markets for Identical Liabilities		Significant Other Observable Inputs			Significant Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)
Interest rate swap agreement	$	—	$	(49	)	$	—
Fuel purchases accounted for as derivatives		—	$	87			—

	Fair Value Measurements as of December 31, 2011
	Quoted Prices in Active Markets for Identical Liabilities		Significant Other Observable Inputs			Significant Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)
Interest rate swap agreement	$	—	$	(156	)	$	—

The following methods and assumptions were used to estimate the fair values of financial instruments for which the fair value option was not elected:

Cash and cash equivalents, accounts receivable and accounts payable: The carrying amount reported in the balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates their fair values due to the short maturity of these instruments.

Derivatives: The fair value of derivatives is established using a discounted cash flow analysis using primarily inputs that can be observed within financial markets, such as LIBOR and ultra low-sulfur diesel rates.

Fixed rate debt: The fair value of fixed rate debt is estimated using discounted cash flow analyses, based on current market rates for instruments with similar cash flows. As such, the fair value of fixed rate debt is considered Level 2.

Variable rate debt: The fair value of variable rate debt is estimated using discounted cash flow analyses, based on our best estimates of market rate for instruments with similar cash flows. As such, the fair value of variable rate debt is considered Level 2.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 8:

FAIR VALUE MEASUREMENTS (continued)

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:


	September 30, 2012				December 31, 2011
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Fixed rate debt	$	7,531	$	7,646	$	12,755	$	13,650
Variable rate debt		150,500		150,500		131,000		131,000

The following table sets forth by level, within the fair value hierarchy, our fair value measurements with respect to nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis as of September 30, 2012. These assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.


	Fair Value Measurements as of September 30, 2012
	Active Markets for Identical Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets held for sale ⁽¹⁾	$	—	$	6,665	$	—

⁽¹⁾	Total assets held for sale as of September 30, 2012 are $6.7 million. Some of the assets held for sale were not impaired and therefore are not reflected in the table above. Assets which were not impaired are recorded at net book value rather than fair value.

Derivatives Activity

We are exposed to certain market risks, primarily fuel price risk and interest rate risk. These risks represent risk of loss that may impact our business due to changes in underlying market rates or prices. We manage these risks through various financial instruments, some of which require derivative accounting under ASC 815. Our strategy around our use of interest rate derivative instruments is to employ such instruments to fix a portion of our future interest cash outflows as discussed further in Note 10 of our Annual Report.

As a result of the reduced production levels associated with the Illinois Basin restructuring, we were unable to take physical delivery of some of the diesel fuel for which we were obligated under our previous fuel contracts. Therefore, we renegotiated fuel deliveries and restructured our fuel contracts into a single amended contract that decreased the fuel volume and net settled a portion of the previous contracts. As a result, the amended contract no longer qualifies for the normal purchase and sale exemption allowed by ASC 815 and is accounted for as a derivative. As of September 30, 2012, the amended contract is valued at $87 which is recorded in “Prepaid expenses and other current assets.”

NOTE 9:

LONG-TERM INCENTIVE PLAN

Under our LTIP, we recognize equity-based compensation expense over the vesting period of the granted units. Historically, these units have generally vested in equal annual increments over four years with accelerated vesting of the first increment in certain cases. Beginning in 2012, our grants of units included some units that vest based on performance criteria established at the time of and in connection with the grant. We are authorized to distribute up to 2,056,075 units under the LTIP. As of September 30, 2012, 1,458,956 units remain available for issuance in the future assuming that all grants issued and currently outstanding are settled with common units, without reduction for tax withholding, and no future forfeitures occur.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 9:

LONG-TERM INCENTIVE PLAN (continued)

For the three months ended September 30, 2012 and 2011, equity-based compensation expense was $490 and $245, respectively. For the nine months ended September 30, 2012 and 2011, our equity-based compensation expense was $966 and $854, respectively. These amounts are included in selling, general and administrative expenses. As of September 30, 2012 and December 31, 2011, $2,080 and $978, respectively, of cost remained unamortized which we expect to recognize using the straight-line method over a remaining weighted average period of 1.4 years.

The following table summarizes additional information concerning our unvested LTIP units:


				Weighted
				Average
				Grant Date
	Units			Fair Value
Unvested balance as of December 31, 2011		80,043		$	16.25
Granted		298,787			10.33
Issued		(54,594	)		10.97
Surrendered		(27,652	)		13.16

Unvested balance as of September 30, 2012		296,584			11.54

The values of LTIP units vested during the three months ended September 30, 2012 and 2011 were $284 and $54, respectively. The values of LTIP units vested during the nine months ended September 30, 2012 and 2011 were $841 and $507, respectively.

NOTE 10:

EARNINGS PER UNIT

For purposes of our earnings per unit calculation, we have two classes: limited partner units and general partner units. All outstanding units share pro rata in income allocations and distributions and our general partner has sole voting rights.

Limited Partner Units: Basic earnings per unit are computed by dividing net income attributable to limited partners by the weighted average units outstanding during the reporting period. Diluted earnings per unit are computed similar to basic earnings per unit, except that the weighted average units outstanding and net income attributable to limited partners are increased to include phantom units that have not yet vested, but will in the future convert to LTIP units upon vesting. In years of a loss, the phantom units are anti-dilutive and therefore not included in the earnings per unit calculation.

General Partner Units: Basic earnings per unit are computed by dividing net income attributable to our GP by the weighted average units outstanding during the reporting period. Diluted earnings per unit for our GP are computed similar to basic earnings per unit, except that the net income attributable to the general partner units is adjusted for the dilutive impact of the phantom units. In years of a loss, the phantom units are anti-dilutive and therefore not included in the earnings per unit calculation.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 10:

EARNINGS PER UNIT (continued)

The computation of basic and diluted earnings per unit under the two class method for limited partner units and general partner units is presented below:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2012			2011		2012			2011
	(in thousands, except for unit and per unit amounts)
*Limited partner units*
Average units outstanding:
Basic		20,717,734			20,635,288		20,702,042			20,631,055
Effect of equity-based compensation		n/a			71,506		n/a			n/a

Diluted		20,717,734			20,706,794		20,702,042			20,631,055

Net (loss) income allocated to limited partners
Basic	$	(3,248	)	$	24	$	(20,135	)	$	(7,850	)
Diluted	$	(3,248	)	$	24	$	(20,135	)	$	(7,850	)

Net loss per limited partner unit
Basic	$	(0.16	)	$	—	$	(0.97	)	$	(0.38	)
Diluted	$	(0.16	)	$	—	$	(0.97	)	$	(0.38	)

*General partner units*
Average units outstanding:
Basic and diluted		422,677			421,120		422,461			420,983

Net loss allocated to general partner
Basic	$	(66	)	$	—	$	(410	)	$	(160	)
Diluted	$	(66	)	$	—	$	(410	)	$	(160	)

Net loss per general partner unit
Basic	$	(0.16	)	$	—	$	(0.97	)	$	(0.38	)
Diluted	$	(0.16	)	$	—	$	(0.97	)	$	(0.38	)

Anti-dilutive units ⁽¹⁾⁽²⁾		10,541			n/a		—			75,989

*Distributions paid per unit*
Limited partner unitholders:
Common	$	0.4375		$	0.4375	$	1.3125		$	1.3125
Subordinated	$	0.1000		$	0.4375	$	0.6375		$	1.3125
General partner unitholders	$	0.2688		$	0.4375	$	0.9750		$	1.3125

⁽¹⁾	Anti-dilutive units are not used in calculating dilutive average units.

⁽²⁾	Unvested LTIP units are not dilutive units for the nine months ended September 30, 2012.

NOTE 11:

COMMITMENTS AND CONTINGENCIES

Coal Sales Contracts

We are committed under long-term contracts to sell coal that meets certain quality requirements at specified prices. Most of these contracts contain cost pass through or cost adjustment provisions that mitigate some risk from rising costs. Quantities sold under some of these contracts may vary from year to year within certain limits at the option of the customer or us. As of September 30, 2012, the remaining terms of our long-term contracts range from less than one year to three and one-quarter years.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 11:

COMMITMENTS AND CONTINGENCIES (continued)

As previously disclosed in our public filings, we received a contract termination notice in March 2012 from a customer of our Illinois Basin operations. This contract required us to supply the customer with 0.8 million tons of coal per year. Absent any termination thereof, the term of the contract continued until December 31, 2015. We believe that this customer’s action was taken in bad faith, motivated by the combination of the price increase that had recently gone into effect under the customer’s sales contract and current coal market conditions. We are aggressively pursuing compensation for our damages through all appropriate legal measures.

Purchase Commitments

From time to time, we purchase coal from third parties in order to meet quality or delivery requirements under our customer contracts. As of September 30, 2012, we are committed to purchase 350,000 tons of coal in 2012 and 360,000 tons of coal in 2013.

We previously had a long-term coal purchase contract for 0.4 million tons per year with a separate supplier who now asserts that the contract is terminated by its terms. We have taken a contrary position and are actively pursuing resolution of this matter.

Transportation

We depend upon barge, rail and truck transportation systems to deliver our coal to our customers. Disruption of these transportation services due to weather-related problems, mechanical difficulties, strikes, lockouts, bottlenecks and other events could temporarily impair our ability to supply coal to our customers, resulting in decreased shipments. We have a long-term rail transportation contract that has been amended and extended through March 31, 2014.

Coal Royalties

Periodically, limited amounts of coal associated with a reserve cannot be or are not mined due to various factors including mining conditions or economics. Despite those factors, certain lessors have alleged that they are due royalties associated with the unmined portion of those reserves. We are willing to entertain an amicable resolution and recorded $220 in additional royalty expense in the second quarter of 2012 related to this issue.

401(k) Plan

During September 2012, we paid our GP $2.1 million to fund the commitment to our 401(k) plan related to plan year 2011. As of September 30, 2012, we had an obligation to pay our GP $1.4 million related to plan year 2012. This amount is expected to be paid by September 2013.

Surety and Performance Bonds

As of September 30, 2012, we had $39.0 million in surety bonds outstanding to secure certain reclamation obligations. Additionally, as of September 30, 2012, we had letters of credit totaling $7.9 million outstanding in support of these bonds. Further, as of September 30, 2012, we had road bonds totaling $0.6 million and performance bonds totaling $2.7 million outstanding to secure our contractual performance. We believe these bonds and letters of credit will expire without any claims or payments thereon, and therefore will not have a material adverse effect on our financial position, liquidity or operations. Subsequent to September 30, 2012, we posted an additional $2.2 million of letters of credit as collateral related to our surety bonds.

Legal

From time to time, we are involved in various legal proceedings arising in the ordinary course of business. While the ultimate resolution of these proceedings cannot be predicted with certainty, we believe that these claims will not have a material adverse effect on our financial position, liquidity or operations.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 11:

COMMITMENTS AND CONTINGENCIES (continued)

Guarantees

Our GP and the Partnership guarantee certain obligations of our subsidiaries. Also, Mr. C. Ungurean has guaranteed certain of our obligations relating to surety and performance bonds. We believe that these guarantees will expire without any liability to the guarantors, and therefore will not have a material adverse effect on our financial position, liquidity or operations.

NOTE 12:

RELATED PARTY TRANSACTIONS

The Partnership and Oxford Mining have an administrative and operational services agreement (the “Services Agreement”) with our GP. The Services Agreement is terminable by either party upon thirty days written notice. Under the terms of the Services Agreement, our GP provides services through its employees to us and is reimbursed for all related costs incurred on our behalf. Our GP provides us with services such as general administrative and management, human resources, legal, information technology, finance and accounting, corporate development, real property, marketing, engineering, operations (including mining operations), geological, risk management and insurance services. Pursuant to the Services Agreement, the primary reimbursements to our GP were for costs related to payroll. Reimbursable costs under the Services Agreement totaling $3.3 million and $2.7 million were included in accounts payable as of September 30, 2012 and December 31, 2011, respectively.

A services agreement with Tunnell Hill Reclamation, LLC (“Tunnell Hill”), a company that is indirectly owned by Mr. C. Ungurean, Mr. T. Ungurean, and affiliates of AIM Oxford, was scheduled to expire on December 31, 2011. During July 2011, we concluded negotiations with Tunnell Hill for an early termination of the services agreement effective August 1, 2011 (the “Termination Date”). In connection with the termination of the services agreement, we entered into a transaction agreement and related documents with Tunnell Hill, effective as of the Termination Date, under which Tunnell Hill temporarily leased from us for a period of six months certain of our equipment. Under the leasing arrangement, we received $24 per month for rental of the equipment. Following the lease term, Tunnell Hill exercised its option to purchase all of the leased equipment. For this transaction, we received net proceeds of $877, which reflects the purchase price of $948 less a credit of 50% of the rental payments received during the lease period, and recognized a gain of $97.

Contract services provided to Tunnell Hill totaled $153 and $254 for the three months ended September 30, 2012 and 2011, respectively, and $187 and $1,453 for the nine months ended September 30, 2012 and 2011, respectively. Accounts receivable were $152 and $48 from Tunnell Hill as of September 30, 2012 and December 31, 2011, respectively. Separate from the terminated services agreement described above, we continue to sell clay and small quantities of coal to Tunnell Hill.

From time to time for business purposes, we charter the use of an airplane from Zanesville Aviation located in Zanesville, Ohio. T&C Holdco LLC, a company that is owned by Mr. C. Ungurean and Mr. T. Ungurean, owns an airplane that it leases to Zanesville Aviation and that Zanesville Aviation uses in providing chartering services to its customers, including us. Under its lease with Zanesville Aviation, T&C Holdco LLC receives compensation from Zanesville Aviation for the use of T&C Holdco LLC’s airplane. We incurred a de minimus amount of expense for charter services in the three months ended September 30, 2012 and $43 during the three months ended September 30, 2011. During the nine months ended September 30, 2012 and 2011, we paid Zanesville Aviation an aggregate of $126 and $116, respectively.

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except for unit and per unit data)

(CONTINUED)

NOTE 13:

SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information:


	Nine Months Ended
	September 30,
	2012		2011
Cash paid for:
Interest	$	8,482	$	5,106

Non-cash activities:
Purchase of coal reserves with debt		307		—
Reclamation and mine closure costs capitalized in mine development		6,411		9,158
Market value of common units vested in LTIP		764		1,057
Purchase of property and equipment included in accounts payable		1,569		4,633
Mine development expenditures included in accounts payable		269		186

NOTE 14:

SEGMENT INFORMATION

We operate in a single business segment. We operate surface coal mines in Northern Appalachia and the Illinois Basin and sell high-value steam coal to utilities, industrial customers, municipalities and other coal-related entities, primarily in the eastern United States. Our operating and executive management reviews and bases its decisions upon consolidated reports. All three of our operating subsidiaries extract coal utilizing surface mining techniques and prepare it for sale to their customers. The operating companies share customers and a particular customer may receive coal from any one of the operating companies.

NOTE 15:

SUBSEQUENT EVENTS

On October 25, 2012, the GP’s Board of Directors declared a cash distribution by the Partnership of $0.20 per unit to its common unitholders, and $0.10 per unit to its holders of general partner units, with respect to the third quarter ended September 30, 2012. No distribution was declared related to the subordinated units for the period. This distribution, totaling $2.1 million (consisting of over $2.0 million to the common unitholders and $42.3 to the general partner unitholders), will be paid on November 14, 2012 to unitholders of record as of the close of business on November 8, 2012. Under the Partnership’s partnership agreement, arrearage amounts resulting from the reduction in the common units distribution accumulate, while those from the subordinated units do not. Accumulated arrearage amounts for the common unitholders will be paid as a priority over and before any future quarterly distributions are paid on the subordinated units. The total arrearage amount related to the November 2012 distribution is $2.5 million.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2011 included in our Annual Report on Form 10-K (our “Annual Report”) and filed with the U.S. Securities and Exchange Commission (the “SEC”). This discussion contains forward-looking statements that reflect management’s current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements or as a result of certain factors such as those set forth below under “Cautionary Statement Regarding Forward-Looking Statements.”

Cautionary Statement Regarding Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements within the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995 and may involve a number of risks and uncertainties. We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” and similar terms and phrases, including references to assumptions, in this report to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to various risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

•

market demand for coal and energy;

•

availability of qualified workers;

•

future economic or capital market conditions;

•

weather conditions or catastrophic weather-related damage;

•

our production capabilities;

•

consummation of financing, acquisition or disposition transactions and the effect thereof on our business;

•

our plans and objectives for future operations and expansion or consolidation;

•

our relationships with, and other conditions affecting, our customers;

•

availability and costs of key supplies or commodities such as diesel fuel, steel, explosives and tires;

•

availability and costs of capital equipment;

•

prices of fuels which compete with or impact coal usage, such as oil and natural gas;

•

timing of reductions or increases in customer coal inventories;

•

long-term coal supply arrangements;

•

reductions and/or deferrals of purchases by major customers;

•

risks in or related to coal mining operations, including risks relating to third-party suppliers and carriers operating at our mines or complexes;

•

unexpected maintenance and equipment failure;

•

environmental, safety and other laws and regulations, including those directly affecting our coal mining and production, and those affecting our customers’ coal usage;

•

ability to obtain and maintain all necessary governmental permits and authorizations;

•

competition among coal and other energy producers in the United States and internationally;

•

railroad, barge, trucking and other transportation availability, performance and costs;

•

employee benefits costs and labor relations issues;

•

replacement of our reserves;

•

our assumptions concerning economically recoverable coal reserve estimates;

•

availability and costs of credit, surety bonds and letters of credit;

•

title defects or loss of leasehold interests in our properties which could result in unanticipated costs or inability to mine these properties;

•

future legislation and changes in regulations or governmental policies or changes in interpretations or enforcement thereof, including with respect to safety enhancements and environmental initiatives relating to global warming and climate change;

•

our liquidity, including our ability to adhere to financial covenants related to our borrowing arrangements;

•

limitations in the cash distributions we receive from our majority-owned subsidiary, Harrison Resources, LLC (“Harrison Resources”), and the ability of Harrison Resources to acquire additional reserves on economical terms from CONSOL Energy in the future;

•

adequacy and sufficiency of our internal controls;

•

legal and administrative proceedings, settlements, investigations and claims, including those related to citations and orders issued by regulatory authorities, and the availability of related insurance coverage;

•

our ability to pay our quarterly distributions which substantially depends upon our future operating performance (which may be affected by prevailing economic conditions in the coal industry), debt covenants, and financial, business and other factors, some of which are beyond our control; and

•

the need to recognize impairment and/or restructuring charges associated with our operations, including impairment and restructuring charges associated with our Illinois Basin operations, as well as any changes to previously identified impairment or restructuring charge estimates.

You should keep in mind that any forward-looking statements made by us in this Quarterly Report on Form 10-Q or elsewhere speak only as of the date on which the statements were made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us or anticipated results. We have no duty to, and do not intend to, update or revise the forward-looking statements in this Quarterly Report on Form 10-Q after the date of this Quarterly Report on Form 10-Q, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this Quarterly Report on Form 10-Q might not occur. When considering these forward-looking statements, you should keep in mind the cautionary statements in this Quarterly Report on Form 10-Q and in our other SEC filings, including the more detailed discussion of these factors, as well as other factors that could affect our results, contained in the “Risks Relating to Our Business” section of Item 1A of our Annual Report.

Ov e rview

We are a low-cost producer of high value steam coal, and we are the largest producer of surface mined coal in Ohio. We focus on acquiring steam coal reserves that we can efficiently mine with our modern, large scale equipment. Our reserves and operations are strategically located to serve our primary market area of Illinois, Indiana, Kentucky, Ohio, Pennsylvania and West Virginia.

We operate in a single business segment and have three operating subsidiaries, Oxford Mining Company, LLC (“Oxford Mining”), Oxford Mining Company-Kentucky, LLC and Harrison Resources. All of our operating subsidiaries participate primarily in the business of utilizing surface mining techniques to mine domestic coal and prepare it for sale to our customers. All three subsidiaries share common customers, assets and employees.

We currently have 17 active surface mines and we manage these mines as eight mining complexes. Our operations also include two river terminals, strategically located in eastern Ohio and western Kentucky. During the three months and nine months ended September 30, 2012, we produced 1.8 and 5.3 million tons of coal, respectively, and sold 1.9 and 5.7 million tons of coal, respectively, including 0.1 and 0.4 million tons of purchased coal, respectively.

As previously disclosed in our public filings, we received a termination notice in March 2012 from a customer related to an 0.8 million ton per year coal supply contract fulfilled from our Illinois Basin operations. In response, we idled one Illinois Basin mine and the related wash plant, closed our Illinois Basin lab, reduced operations at two other mines, terminated a significant number of employees and substituted purchased coal for mined and washed coal on certain sales contracts.

For the three and nine months ended September 30, 2012, we recognized impairment and restructuring charges of $0.2 million and $13.8 million, respectively, related to the restructuring of our Illinois Basin operations. We expect to incur $0.7 million of additional costs throughout the balance of 2012 and the first quarter of 2013 as we complete the restructuring.

Evaluating Our Results of Operations

We evaluate our results of operations based on several key measures:

•

our coal production, sales volume and sales prices, which drive our coal sales revenue;

•

our cost of coal sales including cost of purchased coal;

•

our Adjusted EBITDA, a non-GAAP financial measure; and

•

our Distributable Cash Flow, a non-GAAP financial measure.

Coal Production, Sales Volume and Sales Prices

We evaluate our operations based on the volume of coal we produce, the volume of coal we sell and the prices we receive for our coal. These coal volumes are measured in clean tons. Because we sell substantially all of our coal under long-term coal sales contracts, our coal production, sales volume and sales prices are largely

dependent upon the terms of those contracts. The volume of coal we sell is also a function of the productive capacity of our mining complexes, the amount of coal we purchase and changes in inventory levels. Please read “—Cost of Coal Sales” for more information regarding our purchased coal.

Our long-term coal sales contracts typically provide for a fixed price, or a schedule of prices that are either fixed or contain market-based adjustments, over the contract term. In addition, many of our long-term coal sales contracts have full or partial cost pass through or cost adjustment provisions. Cost pass through provisions increase or decrease our coal sales price for all or a specified percentage of changes in the costs for items such as fuel and inflation. Cost adjustment provisions adjust the initial contract price over the term of the contract either by a specific percentage or a percentage determined by reference to various cost-related indices, including cost-related indices for fuel and cost-of-living generally.

Our transportation revenue reflects the portion of our total coal revenues attributable to the actual transportation costs incurred to transport our coal from our mines to our river terminals, our rail loading facilities and our customers. Our transportation revenue fluctuates based on a number of factors, including the volume of coal we transport, the method by which we transport our coal and the rates charged by the third-party transportation companies. Our transportation expenses are equal to and offset our transportation revenues.

We evaluate the price we receive for our coal on a coal sales revenue per ton basis, net of transportation costs. Our coal sales revenue per ton represents our coal sales revenue divided by total tons of coal sold. The following table provides operational data including data with respect to our coal production and purchases, coal sold and coal sales revenue per ton for the periods indicated:


													% Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months 2012 vs.			Nine Months 2012 vs.
	2012			2011			2012			2011			2011			2011
	(tons in thousands)
Produced tons		1,776			2,187			5,285			6,071			(18.8	%)		(12.9	%)
Purchased tons		146			88			366			365			65.9	%		0.3	%

Tons of coal sold		1,922			2,275			5,651			6,436			(15.5	%)		(12.2	%)

Tons sold under long-term contracts ⁽¹⁾		94.0	%		93.2	%		93.0	%		93.5	%		n/a			n/a

Coal sales revenue per ton	$	43.67		$	41.72		$	43.70		$	40.73			4.7	%		7.3	%
Below-market sales contract amortization per ton		0.06			0.11			0.10			0.12			(45.5	%)		(16.7	%)

Cash coal sales revenue per ton		43.61			41.61			43.60			40.61			4.8	%		7.4	%
Cash cost of coal sales per ton		35.54			33.54			36.28			33.36			6.0	%		8.8	%

Cash margin per ton	$	8.07		$	8.07		$	7.32		$	7.25			0.0	%		1.0	%

Transportation revenue and cost per ton	$	5.77		$	5.66		$	5.81		$	5.43			1.9	%		7.0	%

Number of operating days		67			68			203			204			(1.5	%)		(0.5	%)

⁽¹⁾	Represents the percentage of the tons sold under long-term coal sales contracts.

Cost of Coal Sales

We evaluate, on a cost per ton sold basis, our cost of coal sales, which excludes the cost of transportation, non-cash costs such as depreciation, depletion and amortization (“DD&A”), gain/loss on asset disposals, impairment and restructuring charges, and indirect costs such as selling, general and administrative expenses. Our cost of coal sales per ton represents our cost of coal sales divided by the tons of coal sold. Our cost of coal sales includes costs for labor, fuel, oil, explosives, royalties, equipment lease expense, repairs and maintenance, and other costs directly related to our mining operations. Our cost of coal sales does not take into account the effects of the cost pass through or cost adjustment provisions in our long-term coal sales contracts, as those provisions result in an adjustment to our coal sales price.

We purchase coal from third parties to fulfill a portion of our obligations under our long-term coal sales contracts and, in certain cases, to meet customer coal quality specifications. These costs are included in the cost of purchased coal amount within cost of coal sales.

In connection with our Illinois Basin operations, we had a long-term coal purchase contract with a third-party supplier that had favorable pricing terms relative to our production costs. Under this contract the third-party supplier was obligated to deliver and we were obligated to purchase 0.4 million tons of coal each year until the coal reserves covered by this contract were depleted. We have experienced supplier performance issues under this contract which have continued into 2012. The supplier has asserted that this contract is terminated by its terms, while we have taken a contrary position. We are actively pursuing resolution of this matter. We have not received any tons from this supplier during 2012.

In March 2012, we entered into another long-term coal purchase contract with a separate supplier for our Illinois Basin operations for delivery of 350,000 tons of coal in 2012 and 360,000 tons of coal in 2013. A majority of the tons purchased in both the third quarter and the nine months ended September 30, 2012 were under this new contract as compared to the previously described lower priced contract in the third quarter and the nine months ended September 30, 2011.

The following table provides summary information for the periods indicated relating to our cost of coal sales per ton and tons of coal sold:


									% Change
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months 2012 vs.			Nine Months 2012 vs.
	2012		2011		2012		2011		2011			2011
	(tons in thousands)
Cost of coal sales per ton	$	35.54	$	33.54	$	36.28	$	33.36		6.0	%		8.8	%

Produced tons		1,776		2,187		5,285		6,071		(18.8	%)		(12.9	%)
Purchased tons		146		88		366		365		65.9	%		0.3	%

Tons of coal sold		1,922		2,275		5,651		6,436		(15.5	%)		(12.2	%)

Adjusted EBITDA

Adjusted EBITDA represents net income (loss) attributable to our unitholders before interest, income taxes, DD&A, non-cash equity-based compensation expense, gain or loss on the disposal of assets, amortization of below-market coal sales contracts, impairment and restructuring charges, certain non-recurring costs, non-cash change in future reclamation obligations, and noncontrolling interest. Although Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, we believe it is useful in evaluating our financial performance and compliance with certain credit facility financial covenants. Because not all companies calculate Adjusted EBITDA in the same way, our calculation may not be comparable to similarly titled measure of other companies.

Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and lenders, to assess:

•

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 and to make cash distributions to our limited partners and general partners;

•

our compliance with certain credit facility financial covenants; and

•

our ability to fund capital expenditure projects from operating cash flow.

Distributable Cash Flow

Distributable Cash Flow represents Adjusted EBITDA less cash interest expense (net of interest income), estimated reserve replacement expenditures, maintenance capital expenditures, cash reclamation expenditures, and noncontrolling interest. Cash interest expense represents the portion of our interest expense accrued and paid in cash during the reporting periods presented or that we will pay in cash in future periods as the obligations become due. Estimated reserve replacement expenditures represent an estimate of the average periodic (quarterly or annual, as applicable) reserve replacement expenditures that we will incur over the long term and then applied to the applicable period. We use estimated reserve replacement expenditures to calculate Distributable Cash Flow instead of actual reserve replacement expenditures, consistent with our partnership agreement which requires that we deduct estimated reserve replacement expenditures when calculating operating surplus. Maintenance capital expenditures include, among other things, actual expenditures for plant, equipment, and mine development. Cash reclamation expenditures represent the reduction to our reclamation and mine closure costs resulting from cash payments. Earnings attributable to the noncontrolling interest are not available for distribution to our unitholders and accordingly are deducted.

Distributable Cash Flow should not be considered as an alternative to net income (loss) attributable to our unitholders, income from operations, cash flows from operating activities or any other measure of performance presented in accordance with GAAP. Although Distributable Cash Flow is not a measure of performance calculated in accordance with GAAP, we believe Distributable Cash Flow is useful to investors because this measurement is used by many analysts and others in the industry as a performance measurement tool to evaluate our operating and financial performance, facilitating comparison with the performance of other publicly traded limited partnerships.

Sales Contracts

For the past three years, over 90% of our annual coal sales were made under long-term coal sales contracts and we intend to continue to enter into long-term coal sales contracts for substantially all of our annual coal production. We define coal sales contracts as long-term if their initial term is one year or more. We believe our long-term coal sales contracts reduce our exposure to fluctuations in the spot price for coal and provide us with a reliable and stable revenue base. Our long-term coal sales contracts also allow us to partially mitigate our exposure to rising costs to the extent those contracts have full or partial cost pass through and/or cost adjustment provisions.

As of September 30, 2012, all of our projected sales for the balance of 2012 are committed and priced. For 2013, 2014 and 2015, we have committed and priced long-term contracts for sales of 6.3 million tons, 4.8 million tons and 1.9 million tons, respectively. In addition, we have contracts which are committed and unpriced for 0.4 million tons for 2014, 2.5 million tons for 2015 and 4.2 million tons for 2016.

The terms of our coal sales contracts result from competitive bidding and negotiation with customers. As a result, the terms of these contracts vary by customer. However, many of our long-term coal sales contracts have full or partial cost pass through and/or cost adjustment provisions. For fiscal 2012, 2013, 2014 and 2015, 63%, 70%, 68% and 61%, respectively, of the tons of coal that we have committed to deliver under our current long-term coal sales contracts are subject to full or partial cost pass through and/or cost adjustment provisions. Cost pass through provisions increase or decrease the coal sales price for all or a specified percentage of changes in the costs for items such as fuel, explosives and/or labor. Cost adjustment provisions adjust the initial contract price over the term of the contract either by a specific percentage or a percentage determined by reference to various cost-related indices.

Some long-term coal sales contracts contain option provisions that give the customer the right to purchase certain tons of coal during the contract term at the same price as the fixed tons provided for in the contract. As of September 30, 2012, customers hold options to purchase 0.4 million tons per year for the period from 2013 through 2015.

Factors That Impact Our Business

Factors that influence our business include, but are not limited to: (i) demand for electricity, (ii) economic conditions, (iii) the quantity and quality of coal available from competitors, (iv) competition for production of electricity from non-coal sources such as natural gas, (v) domestic air emission standards and the ability of coal-fired power plants to meet these standards, (vi) legislative, regulatory and judicial developments, including delays,

challenges to, and difficulties in acquiring, maintaining or renewing necessary permits or mineral or surface rights, (vii) market price fluctuations for sulfur dioxide emission allowances and (viii) our ability to meet governmental financial security requirements associated with mining and reclamation activities.

Results of Operations

Factors Affecting the Comparability of Our Results of Operations

The comparability of our results of operations was impacted by impairment and restructuring charges resulting from the actions taken with respect to our Illinois Basin operations as described above under “Overview.” For additional information regarding these impairment and restructuring charges, refer to “Part I. – Financial Information – Item 1. – Condensed Consolidated Financial Statements (Unaudited) – Notes to Condensed Consolidated Financial Statements - Note 3 – Impairment and Restructuring Charges.”

Summary

The following table presents certain of our historical consolidated financial data for the periods indicated and contains both GAAP and non-GAAP measures:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands, unaudited)
Statement of Operations Data:
Revenue:
Coal sales	$	83,931		$	94,919		$	246,964		$	262,093
Transportation revenue		11,096			12,867			32,842			34,976
Other revenue		2,187			2,202			7,223			7,015

Total revenue		97,214			109,988			287,029			304,084

Costs and expenses:
Cost of coal sales:
Produced coal		62,025			73,193			188,895			201,593
Purchased coal		6,274			3,143			16,121			13,058

Total cost of coal sales (excluding depreciation, depletion and amortization)		68,299			76,336			205,016			214,651
Cost of transporation		11,096			12,867			32,842			34,976
Cost of other revenue		274			248			649			1,309
Depreciation, depletion and amortization		13,110			13,323			39,019			38,669
Selling, general and administrative expenses		3,901			3,114			11,475			10,458
Impairment and restructuring expenses		206			—			13,843			—
(Gain) loss on disposal of assets		357			516			(4,156	)		1,239

Total costs and expenses		97,243			106,404			298,688			301,302


(Loss) income from operations		(29	)		3,584			(11,659	)		2,782

Interest income		1			5			7			10
Interest expense		(3,012	)		(2,431	)		(8,522	)		(6,787	)

Net (loss) income		(3,040	)		1,158			(20,174	)		(3,995	)
Net income attributable to noncontrolling interest		(274	)		(1,134	)		(371	)		(4,015	)

Net (loss) income attributable to Oxford Resource Partners, LP unitholders	$	(3,314	)	$	24		$	(20,545	)	$	(8,010	)

Other Financial Data:
Adjusted EBITDA	$	14,170		$	17,795		$	39,897		$	46,314

Distributable Cash Flow	$	3,076		$	3,880		$	6,347		$	8,591

Reconciliation to GAAP Measures

The following table presents a reconciliation of net (loss) income attributable to our unitholders to Adjusted EBITDA and Distributable Cash Flow for each of the periods indicated:

Reconciliation of net (loss) income attributable to Oxford Resource Partners, LP unitholders

to Adjusted EBITDA and Distributable Cash Flow:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands, unaudited)
Net (loss) income attributable to Oxford Resource Partners, LP unitholders	$	(3,314	)	$	24		$	(20,545	)	$	(8,010	)

Adjustments:
Interest expense, net of interest income		3,011			2,426			8,515			6,777
Depreciation, depletion and amortization		13,110			13,323			39,019			38,669
Impairment and restructuring expenses		206			—			13,843			—
(Gain) loss on disposal of assets		357			516			(4,156	)		1,239
Below-market coal sales contract amortization		(121	)		(244	)		(543	)		(741	)
Non-cash equity-based compensation expense		490			245			966			854
Non-cash change in future reclamation obligations		384			356			1,189			3,004
Non-recurring costs		(227	)		15			1,238			507
Noncontrolling interest		274			1,134			371			4,015

Adjusted EBITDA		14,170			17,795			39,897			46,314

Adjustments:
Cash interest expense, net of interest income		(2,399	)		(2,009	)		(7,095	)		(5,528	)
Estimated reserve replacement expenditures		(1,264	)		(1,529	)		(2,988	)		(4,357	)
Maintenance capital expenditures		(4,874	)		(7,323	)		(17,252	)		(20,097	)
Cash reclamation expenditures		(2,283	)		(1,920	)		(5,844	)		(3,726	)
Noncontrolling interest		(274	)		(1,134	)		(371	)		(4,015	)

Distributable Cash Flow	$	3,076		$	3,880		$	6,347		$	8,591

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Overview. Net loss for the three months ended September 30, 2012 was $3.3 million, or $0.16 per diluted limited partner unit, compared to essentially a breakeven performance for the three months ended September 30, 2011. Total revenue was $97.2 million for the three months ended September 30, 2012, a decrease of $12.8 million, or 11.6%, from $110.0 million for the three months ended September 30, 2011. Adjusted EBITDA was $14.2 million for the three months ended September 30, 2012, a decrease of $3.6 million from $17.8 million for the three months ended September 30, 2011. Cash margin per ton remained constant at $8.07 for the three months ended September 30, 2012 and 2011. Distributable Cash Flow was $3.1 million for the three months ended September 30, 2012, a decrease of $0.8 million from $3.9 million for the three months ended September 30, 2011.

Coal Sales Revenue. Coal sales revenue was $83.9 million for the three months ended September 30, 2012, a decrease of $11.0 million, or 11.6%, from $94.9 million for the three months ended September 30, 2011. The decrease was primarily attributable to a 15.5% reduction in sales tons with a value of $14.7 million that resulted from the unplanned Illinois Basin coal sales contract termination. The decrease was partially offset by a $2.00 increase in cash coal sales revenue per ton (excluding transportation cost) that increased coal sales revenue by $3.7 million.

Transportation Revenue and Expenses . Transportation revenue and expenses were $11.1 million, respectively, for the three months ended September 30, 2012, a decrease of $1.8 million from $12.9 million, respectively, for the three months ended September 30, 2011. The reduction in tons shipped accounted for $2.0 million of the decrease which was partially offset by a slight increase in transportation costs.

Other Revenue . Royalty income and other revenue, primarily limestone sales, was consistent at $2.2 million for the three months ended September 30, 2012 and 2011. Limestone sales were $1.3 million for the three months ended September 30, 2012, an increase of $0.5 million, compared to $0.8 million for the three months ended September 30, 2011. This increase was offset by a decrease in royalty income and service contract income of $0.3 million and $0.2 million, respectively.

Cost of Coal Sales (Excluding DD&A). Cost of coal sales (excluding DD&A) was $68.3 million for the three months ended September 30, 2012, a decrease of $8.0 million, or 10.5%, from $76.3 million for the three months ended September 30, 2011. The decrease was primarily attributable to a reduction of 0.4 million in tons sold, which corresponds to an $11.8 million decrease in cost of coal sales. The reduction in tons sold was attributable to the ongoing impact of the unplanned Illinois Basin coal sales contract termination that occurred in the first quarter of 2012. Cost of coal sales per ton was $35.54 for the three months ended September 30, 2012, an increase of $2.00, or 6.0%, per ton from $33.54 per ton for the three months ended September 30, 2011. The $2.00 per ton increase corresponds to a $3.8 million increase in cost of coal sales, primarily attributable to a rise in cost of $3.6 million, $1.7 million and $1.3 million for purchased coal, diesel fuel and lease expense, respectively, and was partially offset by decreases in repairs and other costs of $1.0 million and $1.8 million, respectively. The diesel fuel increase was due to higher spot prices. For the three months ended September 30, 2012, 146,000 tons of coal were purchased at an average price of $42.98 per ton, which represents increases of 57,800 tons and $7.26 per ton, respectively, for the three months ended September 30, 2011.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization expense was $13.1 million for the three months ended September 30, 2012, a decrease of $0.2 million, or 1.6%, from $13.3 million for the three months ended September 30, 2011. In 2012, certain equipment associated with our Illinois Basin operations was reclassified to assets held for sale and is no longer being depreciated. The decrease in depreciation was partially offset by a $0.7 increase in amortization of reclamation and mine closure costs for closed mines where such costs exceeded the original estimate.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $3.9 million for the three months ended September 30, 2012, an increase of $0.8 million, or 25.3%, from $3.1 million for the three months ended September 30, 2011. The increase was primarily attributable to higher compensation and insurance expenses.

Impairment and Restructuring Charges . Impairment and restructuring charges were $0.2 million for the three months ended September 30, 2012. No such charges were incurred for the three months ended September 30, 2011. These charges for the three months ended September 30, 2012 consisted of professional fees and equipment transportation costs associated with our continuing restructuring of our Illinois Basin operations.

(Gain) Loss on Disposal of Assets . The loss on disposal of assets of $0.4 million for the three months ended September 30, 2012 represented a decrease of $0.1 million from a loss of $0.5 million for the three months ended September 30, 2011. The loss, substantially unchanged quarter over quarter, was the result of the sale/disposal of primarily equipment in the normal course of business.

Net Income Attributable to Noncontrolling Interest . Net income attributable to noncontrolling interest represents the net income attributable to the 49% interest in Harrison Resources owned by a subsidiary of CONSOL Energy. Net income attributable to noncontrolling interest was $0.3 million for the three months ended September 30, 2012, a decrease of $0.8 million from $1.1 million for the three months ended September 30, 2011. This decrease in net income attributable to noncontrolling interest was primarily due to increased mining costs resulting from a higher strip ratio incurred at the Harrison mine.

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Overview. Net loss for the nine months ended September 30, 2012 was $20.5 million, a difference of $12.5 million compared to a net loss of $8.0 million for the nine months ended September 30, 2011. The increase in the loss was primarily attributable to the impairment and restructuring charges of $13.8 million, partially offset by a net gain of $4.2 million related to the disposal of assets. Adjusted EBITDA was $39.9 million for the nine months ended September 30, 2012, down $6.4 million, or 13.9%, from $46.3 million for the nine months ended September 30, 2011. Cash margin per ton was $7.32 for the nine months ended September 30, 2012, an increase of $0.07 per ton, or 1.0%, from $7.25 per ton for the nine months ended September 30, 2011. Distributable Cash Flow was $6.3 million for the nine months ended September 30, 2012, a decrease of $2.3 million, or 26.1%, from $8.6 million for the nine months ended September 30, 2011.

Coal Sales Revenue. Coal sales revenue was $247.0 million for the nine months ended September 30, 2012, a decrease of $15.1 million, or 5.8%, from $262.1 million for the nine months ended September 30, 2011. The decrease was primarily attributable to a reduction in tons sold that accounted for $31.9 million, offset by a $2.97 per ton increase in pricing that accounted for $16.8 million. This volume decrease was primarily due to the Illinois Basin coal sales contract termination that occurred in the first quarter of 2012 that continues to adversely impact our sales.

Transportation Revenue and Expenses . Transportation revenue and expenses were $32.8 million, respectively, for the nine months ended September 30, 2012, a decrease of $2.2 million, or 6.1%, from $35.0 million, respectively, for the nine months ended September 30, 2011. The reduction in tons shipped accounted for $4.3 million of the decrease which was partially offset by a $2.1 million increase in transportation costs.

Other Revenue . Royalty income and other revenue, primarily limestone sales, was $7.2 million for the nine months ended September 30, 2012, an increase of $0.2 million from $7.0 million for the nine months ended September 30, 2012. The increase was driven by a $2.4 million increase in limestone sales, partially offset by a decrease in royalty income and service contract income of $1.0 million and $1.2 million, respectively.

Cost of Coal Sales (Excluding DD&A). Cost of coal sales (excluding DD&A) was $205.0 million for the nine months ended September 30, 2012, a decrease of $9.7 million, or 4.5%, from $214.7 million for the nine months ended September 30, 2011. The decrease was primarily attributable to an 0.8 million reduction in tons sold relating to the Illinois Basin coal sales contract termination that accounted for $26.2 million of cost. Cost of coal sales per ton was $36.28 for the nine months ended September 30, 2012, an increase of $2.92 per ton, or 8.8%, from $33.36 per ton for the nine months ended September 30, 2011. The $16.5 million in increased costs was primarily attributable to $9.5 million, $3.5 million and $4.7 million of cost increases in diesel fuel, equipment lease expense and purchased coal cost, respectively, and was partially offset by decreases in other costs. The diesel fuel cost increase was due to higher spot prices. The purchased coal increase of $4.7 million was due to an average cost of $43.99 per ton paid for the nine months ended September 30, 2012, an increase of $8.21 per ton from $35.78 per ton paid for the nine months ended September 30, 2011.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization expense was $39.0 million for the nine months ended September 30, 2012, an increase of $0.3 million from $38.7 million for the nine months ended September 30, 2011. The increase was primarily attributable to amortization of reclamation and mine closure costs associated with closed mines, partially offset by lower depreciation expense associated with assets held for sale that are no longer being depreciated.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $11.5 million for the nine months ended September 30, 2012, an increase of $1.0 million, or 9.7%, from $10.5 million for the nine months ended September 30, 2011. The increase was primarily attributable to professional fees.

Impairment and Restructuring Charges . Impairment and restructuring charges were $13.8 million for the nine months ended September 30, 2012, with no similar amounts in the prior year. These charges resulted from the restructuring of our Illinois Basin operations and included non-cash asset impairment charges related to coal reserves, mine development assets and equipment. Restructuring charges included employee termination costs, professional fees, and transportation costs associated with moving idled equipment to our Northern Appalachian operations.

(Gain) Loss on Disposal of Assets . The net gain on disposal of assets totaled $4.2 million for the nine months ended September 30, 2012. We sold oil and gas rights on 1,250 acres of land for $6.3 million that was partially offset by a $2.1 million loss on the sale of equipment.

Net Income Attributable to Noncontrolling Interest . Net income attributable to noncontrolling interest represents net income attributable to the 49% interest in Harrison Resources owned by a subsidiary of CONSOL Energy. Net income attributable to noncontrolling interest was $0.4 million for the nine months ended September 30, 2012, a decrease of $3.6 million from $4.0 million for the nine months ended September 30, 2011. This decrease in net income attributable to noncontrolling interest was primarily due to increased mining costs associated with a higher strip ratio at the Harrison mine.

Liquidity and Capital Resources

Our business is capital intensive and requires substantial capital expenditures for, among other things, purchasing, maintaining and upgrading equipment used in developing and mining our coal, and acquiring reserves. Our principal liquidity needs are to finance current operations, fund capital expenditures, including acquisitions from time to time, service our debt and pay cash distributions to our unitholders. Our primary sources of liquidity to meet these needs are cash generated by our operations and borrowings under the Credit Agreement. Also, if we are able to effect any asset sales associated with our Illinois Basin restructuring at acceptable values, our liquidity will be enhanced by those amounts.

Our ability to satisfy our working capital requirements and debt service obligations, fund planned capital expenditures, and pay quarterly distributions to the unitholders substantially depends upon our future operating performance, which may be affected by prevailing economic conditions in the coal industry. To the extent our future operating cash flow or access to financing sources and the costs thereof are materially different than expected, our future liquidity may be adversely affected.

In June 2012, we amended the Credit Agreement to maintain the leverage ratio required as of June 30, 2012 through maturity of the facility.

In April 2012, we sold oil and gas mineral rights on 1,250 acres of land for $6.3 million. In the transaction, we retained royalty rights equivalent to a 20% net revenue interest once the wells produce. At September 30, 2012, none of the wells were drilled and producing.

As of September 30, 2012, our available liquidity was $9.2 million, which consisted of $6.3 million in cash on hand and $2.9 million of borrowing capacity under the Credit Agreement. Our available liquidity as of September 30, 2011 was $19.1 million, which consisted of $0.7 million in cash on hand and $18.4 million of borrowing capacity under the Credit Agreement.

Distributions

For the nine months ended September 30, 2012, we generated $6.3 million in Distributable Cash Flow toward our total distributions of $13.5 million. The remaining $7.2 million in distributions were funded from the $6.3 million sale of oil and gas rights and advances under the Credit Agreement. We declared a cash distribution of $0.4375 per common unit for each of the first and second quarters of 2012, which was reduced to $0.20 per common unit for the third quarter of 2012, as compared with $0.4375 per common unit for all quarters in previous years. We also declared a reduced cash distribution of $0.10 per subordinated unit for each of the first and second quarters of 2012, which was further reduced to zero in the third quarter of 2012 with suspension of any subordinated units distribution, as compared with $0.4375 per subordinated unit for all quarters in previous years. Under our partnership agreement, arrearage amounts resulting from the reduction in the common units distribution accumulate, while those from the subordinated units do not. Accumulated arrearage amounts for the common unitholders will be paid as a priority over and before any future quarterly distributions are paid on the subordinated units. The arrearage amount related to this distribution for the third quarter of 2012 is $2.5 million.

Cash Flows

The following table reflects cash flows for the applicable periods:


	Nine Months Ended September 30,
	2012			2011
	(in thousands, unaudited)
Net cash from:
Operating activities	$	20,292		$	34,182
Investing activities		(9,933	)		(34,148	)
Financing activities		(7,140	)		(265	)

	$	3,219		$	(231	)

Net cash provided by operating activities was $20.3 million for the nine months ended September 30, 2012, down from $34.2 million for the nine months ended September 30, 2011. This decrease of $13.9 million was primarily the result of a larger net loss and a net unfavorable change in working capital.

Net cash used in investing activities was $9.9 million for the nine months ended September 30, 2012, down from $34.1 million for the nine months ended September 30, 2011. This decrease of $24.2 million was primarily attributable to leasing as opposed to purchasing major mining equipment and proceeds from the sale of assets.

Net cash used in financing activities was $7.1 million for the nine months ended September 30, 2012, up from $0.3 million for the nine months ended September 30, 2011. The increase of $6.8 million was primarily attributable to an increase in payments on borrowings, offset in part by lower advances on the line of credit under the Credit Agreement and lower distributions to partners for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011.

Credit Facility

The credit agreement related to our $175 million credit facility (the “Credit Agreement”) provides for a credit facility consisting of a $60 million term loan and a $115 million revolving line of credit. As of September 30, 2012, we had borrowings of $150.5 million outstanding consisting of $46.5 million on our term loan and $104.0 million on our revolving line of credit. We also had $7.9 million of letters of credit outstanding in support of surety bonds, which bonds are primarily issued for reclamation obligations.

The Credit Agreement became effective July 19, 2010. We are required to make quarterly principal payments of $1.5 million on the $60 million term loan commencing on September 30, 2010 and continuing until the maturity in July 2014, when the remaining balance is to be paid. The $115 million revolving credit line matures in

July 2013. Borrowings under the Credit Agreement bear interest at a variable rate per annum equal to, at our option, the London Interbank Offered Rate (“LIBOR”) or the Base Rate plus the Applicable Margin (Base Rate and Applicable Margin are defined in the Credit Agreement). The Credit Agreement contains customary covenants, including restrictions on our ability to incur additional indebtedness, make certain investments, make distributions to our unitholders, make ordinary course dispositions of assets over predetermined levels, and enter into equipment leases, as well as enter into a merger or sale of all or substantially all of our property or assets, including the sale or transfer of interests in our subsidiaries. The Credit Agreement also requires compliance with certain financial covenants; including limiting our leverage and interest coverage ratios as well as capping capital expenditures in any fiscal year to certain predetermined amounts. Borrowings under the Credit Agreement are secured by a first-priority lien on and security interest in substantially all of our assets.

In June 2012, an amendment to the Credit Agreement was executed that modified certain provisions. The amendment, applicable for the remaining term of the Credit Agreement, (i) modified the leverage ratio, (ii) authorized the sale of certain Kentucky assets, and (iii) allows quarterly distributions at minimum levels and additionally at certain higher levels as long as specified liquidity thresholds are maintained after giving effect to the distribution.

The Credit Agreement matures in July 2013. We intend to achieve the extension and/or replacement of our credit facility prior to the maturity date.

Capital Expenditures

Our mining operations require investments to expand, upgrade and enhance existing operations and to comply with environmental and mining laws and regulations. For 2012, we expect to incur between $22.0 million and $27.0 million in maintenance and expansion capital expenditures, excluding mine reclamation and closing costs.

The following table reflects our maintenance and expansion capital expenditures by type for the nine months ended September 30, 2012 and 2011:


	Nine Months Ended September 30,
	2012		2011
	(in thousands)
Coal reserves and land expenditures	$	51	$	1,075
Major mining equipment		2,637		10,156
Components and tires		12,739		16,735
Mine development		2,723		3,243

Total capital expenditures	$	18,150	$	31,209

We have funded and expect to continue funding maintenance and expansion capital expenditures primarily from cash generated by our operations, borrowings under the Credit Agreement, and proceeds from asset sales.

Off-Balance Sheet Arrangements

In the normal course of business, we are a party to certain off-balance sheet arrangements. These arrangements include guarantees and financial instruments with off-balance sheet risk, such as letters of credit and surety, performance, and road bonds. No liabilities related to these arrangements are reflected in our condensed consolidated balance sheet, and we do not expect any material adverse effects on our financial condition, results of operations or cash flows to result from these arrangements.

Federal and state laws require us to secure certain long-term obligations, such as reclamation and mine closure costs, and contractual performance. Typically, we secure these obligations with surety bonds supported by letters of credit. If surety bonds became unavailable, we would seek to secure our reclamation obligations with letters of credit, cash deposits or other suitable forms of collateral.

As of September 30, 2012, we had $39.0 million of surety bonds outstanding and de minimus cash bonds to secure certain reclamation obligations. Additionally, as of September 30, 2012, we had $7.9 million of letters of credit outstanding in support of these bonds. Further, as of September 30, 2012, we had $0.6 million of road bonds and $2.7 million of performance bonds outstanding that required no security. We believe these bonds and letters of credit will expire without any claims or payments thereon and accordingly we do not expect any material adverse effect on our financial position, liquidity or operations therefrom.

New Accounting Standards Adopted

See Note 2 – Summary of Significant Accounting Policies to the condensed consolidated financial statements included in Part I. – Financial Information – Item 1. – Condensed Consolidated Financial Statements (Unaudited) – Notes to Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q related to recently issued accounting pronouncements, which information is incorporated herein by reference.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts. These estimates and assumptions are based on information available as of the date of the financial statements. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the nine months ended September 30, 2012 are not necessarily indicative of results that can be expected for the full year. Please refer to the section entitled “Critical Accounting Policies and Estimates” of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report for a discussion of our critical accounting policies and estimates.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market price risk in the normal course of mining and selling coal. We manage this risk through the use of long-term coal supply agreements, rather than through the use of derivative instruments. Committed, but unpriced, sales are subject to future market price volatility. As of September 30, 2012, 100% of our projected sales for the balance of 2012 are committed and priced.

Item 4.

Controls and Procedures

We maintain controls and procedures designed to ensure that information required to be disclosed in the reports we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was performed as of September 30, 2012. This evaluation was performed by our management, with the participation of our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these controls and procedures are effective to ensure that the Partnership is able to collect, process and disclose the information it is required to disclose in the reports it files with the SEC within the required time periods. During the quarterly period ended September 30, 2012, there have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with this evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The certifications of our Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) are filed with this Quarterly Report on Form 10-Q as Exhibits 31.1 and 31.2. The certifications of our Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350 are furnished with this Quarterly Report on Form 10-Q as Exhibits 32.1 and 32.2.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

We are involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, our management believes these claims will not have a material adverse effect on our financial position, liquidity or operations.

Item 1A.

Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, careful consideration should be given to the risk factors discussed in the “Risk Factors” section of our Annual Report. There have been no material changes to the risk factors previously disclosed in our Annual Report.

Item 4.

Mine Safety Disclosures

Our mining operations are subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Item 6.

Exhibits

The exhibits listed in the Exhibit Index are incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 7, 2012


OXFORD RESOURCE PARTNERS, LP

By:	OXFORD RESOURCES GP, LLC, its general partner

	By:	/s/ CHARLES C. UNGUREAN
		Charles C. Ungurean
		President and Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ BRADLEY W. HARRIS
		Bradley W. Harris
		Senior Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)

EXHIBIT INDEX


Exhibit Number		Exhibit Description

3.1		Certificate of Limited Partnership of Oxford Resource Partners, LP (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (Commission File No. 333-165662) filed on March 24, 2010)

3.2		Third Amended and Restated Agreement of Limited Partnership of Oxford Resource Partners, LP dated July 19, 2010 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (Commission File No. 001-34815) filed on July 19, 2010)

3.3		Certificate of Formation of Oxford Resources GP, LLC (incorporated by reference to Exhibit 3.3 to Amendment No. 1 to the Registration Statement on Form S-1 (Commission File No. 333-165662) filed on April 21, 2010)

3.4		Third Amended and Restated Limited Liability Company Agreement of Oxford Resources GP, LLC dated January 1, 2011 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (Commission File No. 001-34815) filed on January 4, 2011)

10.4C*#		Amendment to Employment Agreement between Oxford Resources GP, LLC and Gregory J. Honish, which Amendment was effective on August 15, 2012

10.16M*†		Amendment No. 2012-2 to Coal Purchase and Sale Agreement, dated July 30, 2012

10.19#		Employment Agreement between Oxford Resources GP, LLC and Bradley W. Harris, which Employment Agreement was effective on August 15, 2012

31.1*		Certification of Charles C. Ungurean, President and Chief Executive Officer of Oxford Resources GP, LLC, the general partner of Oxford Resource Partners, LP, for the September 30, 2012 Quarterly Report on Form 10-Q, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Bradley W. Harris, Senior Vice President, Chief Financial Officer and Treasurer of Oxford Resources GP, LLC, the general partner of Oxford Resource Partners, LP, for the September 30, 2012 Quarterly Report on Form 10-Q, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Charles C. Ungurean, President and Chief Executive Officer of Oxford Resources GP, LLC, the general partner of Oxford Resource Partners, LP, for the September 30, 2012 Quarterly Report on Form 10-Q, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Bradley W. Harris, Senior Vice President, Chief Financial Officer and Treasurer of Oxford Resources GP, LLC, the general partner of Oxford Resource Partners, LP, for the September 30, 2012 Quarterly Report on Form 10-Q, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95*		Mine Safety Disclosures

101*		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) our Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011; (ii) our Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2012 and 2011; (iii) our Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011; (iv) our Condensed Consolidated Statements of Partners’ Capital for the nine months ended September 30, 2012 and 2011; and (v) the notes to our Condensed Consolidated Financial Statements. This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934

*	Filed herewith (or furnished, in the case of Exhibits 32.1 and 32.2).

†	Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the Securities and Exchange Commission.

#	Compensatory plan or amendment.

Exhibit 10.4C

FIRST AMENDMENT

EMPLOYMENT AGREEMENT

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), effective as of August 15, 2012, is by and between Oxford Resources GP, LLC, a Delaware limited liability company (“Company”), and Gregory J. Honish (“Executive”).

RECITALS :

A. According to the terms of that certain Employment Agreement (the “Employment Agreement”), dated March 14, 2012, by and between Company and Executive, Executive is employed in the position of Senior Vice President, Operations of Company or in such other positions as Company and Executive mutually may agree.

B. Both Company and Executive desire to amend the Employment Agreement to provide for an increased termination or severance payment equal to two times Executive’s annual base salary in the circumstances where applicable;

C. Accordingly, Company and Executive are entering into this Amendment for such purpose.

AGREEMENT :

In consideration of the premises and the mutual covenants and agreements set forth below, and for other good and valuable consideration not specified herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree that the Employment Agreement shall be and hereby is amended as follows:

1. Amendment of Paragraph 4.1 (Termination by Expiration) . Paragraph 4.1 of the Employment Agreement is amended by changing the words “one times” where they appear therein to the words “two times.”

2. Amendment of Paragraph 4.2 (Termination by Company) . Paragraph 4.2 of the Employment Agreement is amended by changing the words “one times” where they appear therein to the words “two times.”

3. Amendment of Paragraph 4.3 (Termination by Executive) . Paragraph 4.3 of the Employment Agreement is amended by changing the words “one times” where they appear therein to the words “two times.”

IN WITNESS WHEREOF , the parties have set their hands hereto as of the date first above written.

Oxford Resources GP, LLC


By:	/s/ Charles C. Ungurean	/s/ Gregory J. Honish
Name:	Charles C. Ungurean	Name: Gregory J. Honish
Title:	President and Chief Executive Officer

Exhibit 10.16M

[*] Certain information in this document has been omitted and filed separately with the Securities and

Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

July 30, 2012

Oxford Mining Company, LLC

Attn: Ms. Angela Ashcraft

544 Chestnut Street

P.O. Box 427

Coshocton, OH 43812

Re:	Coal Purchase and Sale Agreement No. 10-62-04-900, dated as of

May 21, 2004, as amended, between Ohio Power Company

(f/k/a Columbus Southern Power Company) (“Buyer”) and Oxford

Mining Company, LLC (formerly Oxford Mining Company, Inc.) (“Seller”)

SUBJECT: AMENDMENT 2012-2

Reference is made to the above-referenced Coal Purchase and Sale Agreement, as amended (the “Agreement”), under which Seller is supplying coal to Buyer.

Buyer and Seller hereby agree to the following:

1. The table and related footnotes in Section 2.1 Contract Quantity shall be deleted in their entirety and replaced with the following in lieu thereof:

Table 2.1.1


Contract Year(s)	Annual Contract Quantity	Specification A Coal Tons	Specification B Coal Tons	Option No. 1 Tons	Option No. 2 Tons
2009	1,750,000	500,000	⁽³⁾	—	—
2010 – 2011	1,700,000	500,000	⁽³⁾	—	—
2012 – Q 1 and Q2 ⁽¹⁾	501,049	0	501,049	0 to 50,000/qtr ⁽⁴⁾	50,001 – 100,000/qtr ⁽⁵⁾
2012 – Q 3 and Q4 ⁽¹⁾	900,000 ⁽⁶⁾	0	900,000 ⁽⁶⁾	0 to 50,000/qtr ⁽⁴⁾	50,001 – 100,000/qtr ⁽⁵⁾
2013-2015	1,700,000	0	1,700,000	0 to 50,000/qtr ⁽⁴⁾	50,001 – 100,000/qtr ⁽⁵⁾
2016 – 2018 ⁽²⁾	1,700,000	0	1,700,000	0 to 50,000/qtr ⁽⁴⁾	50,001 – 100,000/qtr ⁽⁵⁾

⁽¹⁾

For purposes of the provisions related to Section 2.1 Contract Quantity , the first quarter of calendar year 2012 (“Q1”) and the second quarter of calendar year 2012 (“Q2”) shall be treated collectively as a Contract Year and the third quarter of calendar year 2012 (“Q3”) and the fourth quarter of calendar year 2012 (“Q4”) shall be treated collectively as a Contract Year.

⁽²⁾

If the Option Term Extension is elected by Buyer.

⁽³⁾

For the Delivery Period from [*] through [*] , Seller shall deliver, and Buyer shall accept, no less than [*] Tons per Contract Year of Specification A Coal. For each such Contract Year, Buyer shall nominate a minimum of at least [*] Tons of Specification A Coal for delivery hereunder, and the remaining Coal to be delivered to Buyer which is not nominated as Specification A Coal shall consist of Specification B Coal; provided that the total Tons of Specification A Coal and Specification B Coal shall equal the Annual Contract Quantity, as such Annual Contract Quantity may be increased at Buyer’s option as provided herein. For the avoidance of doubt, Buyer’s nomination rights in the preceding sentence mean that Buyer may so elect to receive more than [*] Tons of Specification A Coal during any such Contract Year.

Oxford Mining Company, LLC

Amendment 2012-2

July 30, 2012

Page 2 of 3

⁽⁴⁾

Option No. 1 Tons (up to 50,000 Tons) may be elected for delivery in any quarter at least sixty (60) days prior to the start of the quarter at the Contract Price in effect when delivered.

⁽ ⁵⁾

Option No. 2 Tons (50,001 – 100,000 Tons) may be elected for delivery in any quarter at least sixty (60) days prior to the start of the quarter at the Contract Price in effect when delivered plus an additional $ [*] per Ton.

⁽⁶⁾

Upon the completion of Q3 and Q4 of 2012 period, the Annual Contract Quantity and Specification B Coal Tons therefor shall be modified to the actual Tons received in the Q3 and Q4 of 2012 period.

2. In ARTICLE V Contract Price , subpart a) shall be deleted in its entirety and replaced with the following subpart a) in lieu thereof:

a) The Contract Price for Coal received [*] through [*] was on an escalated price basis as specified in the Agreement as in effect immediately prior to [*] . The Contract Price for Coal beginning [*] was and will be on a fixed price basis, with no escalation, as follows:

Table 5.1


Contract Year		Price Per Ton - Specification B Coal
FOB Plant:
*[]** ⁽¹⁾		$ *[]**
*[]** ⁽¹⁾⁽²⁾		$ *[]**
*[]**		*[]**
*[]** ⁽³⁾		*[]**

⁽¹⁾	For purposes of the provisions related to ARTICLE V Contract Price , the Q1 and Q2 of 2012 period is treated collectively as a Contract Year and the Q3 and Q4 of 2012 period is treated collectively as a Contract Year

⁽²⁾	Upon the completion of the Q3 and Q4 2012 period, a reconciliation of the Contract Price for Q4 2012 only shall promptly occur. This reconciliation shall be based on the formula calculation set forth below in this Article V a).

⁽³⁾	If the Option Term Extension is elected by Buyer.

During the Q4 2012 period, for the Tons purchased by Buyer during such period, Buyer shall pay Seller the Contract Price specified in Table 5.1 above. With reference to Footnote (2) to Table 5.1 above, Buyer and Seller mutually agree that, notwithstanding such payments at the Contract Price specified in Table 5.1 above, the actual Contract Price for Q4 2012 shall be based upon the following formula calculation which may result in an actual Contract Price that is less than or more than the Contract Price previously paid by Buyer for Q4 2012:

•

[*]

•

[*]

•

[*]

•

[*]

In the event that, by reason of such formula calculation, Buyer has paid to Seller less or more than such calculated actual Contract Price for the Tons received in Q4 2012, (i) Buyer shall promptly pay to Seller the difference if Buyer has paid less and (ii) Seller shall promptly pay to Buyer the difference if Buyer has paid more.

[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Oxford Mining Company, LLC

Amendment 2012-2

July 30, 2012

Page 3 of 3

3. For the Q1 and Q2 period of 2012 and also the Q3 and Q4 period of 2012, with respect to Quality Adjustments determined as provided in Schedule 7.2 of the Agreement, the amount used for the Contract Price in calculating all such Quality Adjustments shall be $ [*] .

Except as amended herein, all other provisions of the Agreement shall remain in full force and effect. If you are in agreement with the foregoing, kindly indicate your acceptance thereof by signing the enclosed duplicate of this letter in the space provided and then returning it to us.

Very truly yours,

/s/ James D. Henry

James D. Henry

Vice President

Fuel, Emissions & Logistics

On behalf of AMERICAN ELECTRIC POWER

SERVICE CORPORATION, as agent for

Ohio Power Company

Accepted :

Oxford Mining Company, LLC

/s/ Charles C. Ungurean

Signature

Charles C. Ungurean

Name

President and Chief Executive Officer

Title

Exhibit 10.19

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made by and between Oxford Resources GP, LLC, a Delaware limited liability company (“Company”), and Bradley W. Harris (“Executive”).

W I T N E S S E T H:

WHEREAS , Company, which is the general partner of Oxford Resource Partners, LP (“Oxford LP”), desires to employ Executive, and Executive desires to be employed by Company, on the terms and conditions set forth herein;

NOW, THEREFORE , for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows, effective as of August 15, 2012 (the “Effective Date”):

ARTICLE 1: EMPLOYMENT AND DUTIES

1.1 Employment; Effective Date . Effective as of the Effective Date, and continuing for the period of time set forth in Article 2 and thereafter for the continuing period of time provided for in paragraph 4.1, Executive’s employment with Company shall be subject to the terms and conditions of this Agreement.

1.2 Positions . Company shall employ Executive from the Effective Date through September 30, 2012 without position, and thereafter from October 1, 2012 on in the positions of Senior Vice President, Chief Financial Officer and Treasurer of Company or in such other positions as the parties mutually may agree. Executive shall work principally out of Company’s executive offices in Columbus, Ohio and shall report to the Chief Executive Officer of Company. From the Effective Date through September 30, 2012 Executive’s duties shall include preparing to lead, and from and after October 1, 2012 Executive’s duties shall include leading, the finance and accounting functions of Company and Company’s mergers and acquisitions program (including successful integration work post-acquisition).

1.3 Duties and Services . Executive agrees to serve in the positions referred to in paragraph 1.2 and to perform diligently the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s senior executive employees (as of the Effective Date consisting of the Chief Executive Officer and the Senior Vice Presidents of Company) (the “Senior Executives”), as such policies may be amended from time to time, provided that in the event of any inconsistency between such policies and any terms of this Agreement, the terms of this Agreement shall control. Notwithstanding such duties and services, Executive and Company understand and agree that, for up to 9 business days during the period beginning on the Effective Date and ending on August 31, 2012, it will be necessary for Executive to be and Executive may be absent from Company’s executive offices and devoting his full time to personal, non-Company matters in connection with winding up his prior commitments and moving his residence to Columbus, Ohio. During such period, Executive shall be considered and treated as an employee of Company for all purposes, and such absence shall not be counted against Executive’s vacation allowance.

1.4 Other Interests . Subject to Section 1.3, Executive agrees, during the period of his employment with Company, to devote substantially all of his primary business time and energy to the business and affairs of Company and its affiliates and not to engage, directly or indirectly (other than as a passive investor in publicly traded securities), in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors of Company (the “Board”). The foregoing notwithstanding, the parties recognize and agree that Executive may engage in charitable and civic pursuits without the consent of the Board, as long as such pursuits do not conflict with the business and affairs of Company or its affiliates or interfere with Executive’s performance of his duties hereunder.

1.5 Duty of Loyalty . Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

2.1 Term . Unless sooner terminated pursuant to other provisions hereof, Executive’s employment shall run for the period beginning on the Effective Date and ending on December 31, 2014 (the “Initial Expiration Date”); provided, however, that, beginning on the Initial Expiration Date and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or paragraph 2.3, then this Agreement shall automatically be extended for an additional one-year period, unless on or before the date that is 90 days prior to the first day of any such extension period either party shall give written notice (an “Expiration Notice”) to the other party that no such automatic extension shall occur.

2.2 Company’s Right to Terminate . Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment for any of the following reasons:

(i) upon Executive’s death;

(ii) upon Executive’s disability, which shall mean Executive’s becoming incapacitated by accident, sickness, or other circumstances which renders him mentally or physically incapable of performing the duties and services required of him hereunder for 90 or more days (whether or not consecutive) out of any consecutive 180-day period;

(iii) for “Cause,” which shall mean Executive has (a) engaged in gross negligence, gross incompetence or willful misconduct in the performance of the duties required of him hereunder; (b) failed without proper reason to perform the duties and responsibilities required of him hereunder, and such failure has continued without cure for a period of 30 days or more after Company has given Executive written notice of such failure; (c) willfully engaged in conduct that is materially injurious to Company or its

-2-

affiliates (monetarily or otherwise); (d) committed an act of fraud, embezzlement or willful breach of fiduciary duty to Company or an affiliate (including the unauthorized disclosure of information that is, and is known or reasonably should have been known to Executive to be, confidential or proprietary material information of Company or an affiliate); or (e) been convicted of (or pleaded no contest to) a crime involving fraud, dishonesty or moral turpitude or any felony; or

(iv) at any time for any other reason, or for no reason whatsoever, in the sole discretion of the Board.

2.3 Executive’s Right to Terminate . Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment for any of the following reasons:

(i) for “Good Reason,” which shall mean, in connection with or based upon (a) a material diminution in Executive’s responsibilities, duties or authority; (b) a material diminution in Executive’s base compensation or the amount of the target annual bonus that may be earned by Executive as described in paragraph 3.2(ii); (c) a material breach by Company of any material provision of this Agreement; or (d) relocation of Executive’s principal place of employment from Company’s executive offices or to a location more than 30 miles from the city limits of Columbus, Ohio; or

(ii) at any time for any other reason, or for no reason whatsoever, in the sole discretion of Executive.

2.4 Notice of Termination . If Company desires to terminate Executive’s employment at any time, it shall do so by giving a 30-day written notice to Executive that it has elected to terminate Executive’s employment and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder. If Executive desires to terminate his employment at any time, he shall do so by giving a 30-day written notice to Company that he has elected to terminate his employment and stating the effective date and reason (if any) for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder. In the case of any notice by Executive of his intent to terminate his employment for Good Reason, Executive shall provide Company with notice of the existence of the condition(s) constituting the Good Reason within 90 days after the Executive has actual knowledge of the initial existence of such condition(s) and Company shall have 30 days following Executive’s provision of such notice to remedy such condition(s). If Company remedies the condition(s) constituting the Good Reason within such 30-day period, then Executive’s employment shall continue and his notice of termination shall become void and of no further effect. If Company does not remedy the condition(s) constituting the Good Reason within such 30-day period, Executive’s employment with Company shall terminate on the date that is 31 days following the date of Executive’s notice of termination and Executive shall be entitled to receive the payment described in paragraph 4.3 and, if applicable, paragraph 4.4. The notice, remedy rights and termination timing provisions applicable under this paragraph 2.4 in the case of Executive’s election to terminate his employment for Good Reason are referred to collectively as the “Good Reason Termination Procedure.”

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2.5 Deemed Resignations . Any termination of Executive’s employment shall constitute an automatic resignation of Executive as an officer of Company and each affiliate of Company, an automatic resignation of Executive from the Board and from the board of directors or similar governing body of any affiliate of Company, and an automatic resignation from the board of directors or similar governing body of any corporation, limited liability company or other entity in which Company or any affiliate holds an equity interest and with respect to which board or similar governing body Executive serves as Company’s or such affiliate’s designee or other representative.

ARTICLE 3: COMPENSATION AND BENEFITS

3.1 Base Salary . During the period of his employment, Executive shall receive a minimum annual base salary of $300,000. Executive’s annual base salary shall be reviewed by the Compensation Committee of the Board (the “Compensation Committee”) on an annual basis, and, in the sole discretion of the Board based upon the recommendation of the Compensation Committee, such annual base salary may be increased, but not decreased, effective as of any date determined by the Board based upon the recommendation of the Compensation Committee. Executive’s annual base salary shall be paid in equal installments in accordance with Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

3.2 Bonuses and Incentive Compensation . During the period of his employment, Executive shall be provided the following bonuses and incentive compensation:

(i) Employment Inducement Bonus – As a one-time inducement to Executive to accept employment with Company, Company shall pay to Executive, on or before August 31, 2012, an employment inducement bonus in the amount of $50,000.

(ii) Annual Bonus – Executive shall be entitled to receive an annual bonus each calendar year, as follows:

(a) For the first partial calendar year hereunder running from the Effective Date through December 31, 2012, Executive shall be paid a guaranteed bonus in the amount of $25,000 per calendar month for each calendar month of his employment hereunder between the Effective Date and December 31, 2012, pro-rated for any partial calendar month of employment during such period. Such bonus shall accrue throughout such period, and shall be payable in March of 2013 promptly following the filing with the SEC of the Form 10-K for 2012 and in no event later than March 15, 2013.

(b) For the calendar year beginning January 1, 2013 and each calendar year thereafter during the period of his employment, Executive shall be eligible to receive an annual incentive performance bonus in an amount equal to up to 100% of his annual base salary (or such greater percentage, if any, as shall be approved by the Board based upon the recommendation of the Compensation Committee). Such bonus shall be payable promptly following the filing with the SEC of the Form 10-K for the year to which the bonus applies and in no event later than March 15 of the year following the year to which the bonus applies.

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(c) The amount of Executive’s annual incentive performance bonus for calendar year 2013 and each calendar year thereafter shall be approved from time to time by the Board based upon the recommendation of the Compensation Committee, and shall be pro-rated for any period of employment with Company during such calendar year of less than 12 months. The Compensation Committee’s recommendations may take into account such criteria as it establishes in its discretion, including, without limitation, recommendations from the Chief Executive Officer of Company. The bonus plan criteria applicable to any such annual bonus determination for Executive for any particular calendar year shall be (1) substantially similar (except for necessary differences based upon job responsibilities) for all Senior Executives and (2) established by the Compensation Committee and communicated to Executive in detail within the first 90 days of such calendar year. In the event of any termination of Executive’s employment with Company where Executive is entitled to receive a termination or severance payment under paragraph 4.1, 4.2 or 4.3, Executive shall also be paid the portion of his annual incentive performance bonus which has accrued for the calendar year to the date of his termination of employment based upon such applicable bonus plan criteria, with such accrued bonus amount to be payable by Company to Executive on or before the date such termination or severance payment is payable to Executive.

(iii) Qualifying Transaction Bonus – In the event a Qualifying Transaction (as defined below) occurs at any time on or before December 31, 2013, Executive shall be entitled to receive a bonus in an amount equal to one times his annual base salary (as in effect on the date of the Qualifying Transaction), which bonus shall be payable to Executive at the time of the occurrence of the Qualifying Transaction. For purposes hereof, a “Qualifying Transaction” is any transaction (other than a voluntary or involuntary reorganization or recapitalization) resulting in a Change of Control (as defined in paragraph 3.2(v)).

(iv) LTIP Awards – Executive shall receive the following awards of phantom units under the LTIP (as defined below):

(a) On August 31, 2012, Executive shall receive an award of 100,000 phantom units under the LTIP, on the terms provided in an LTIP phantom unit award agreement entered into between Company and Executive. Such initial phantom unit award shall vest 25% on August 31, 2012 and a further 25% on each of March 31, 2013, March 31, 2014 and March 31, 2015.

(b) On January 1, 2013, Executive shall receive an award of phantom units under the LTIP having a value equal to 50% of his target compensation for 2013 (his annual base salary plus target annual bonus for 2013), but not less than $300,000, based on the closing price for the common units of Oxford LP on December 31, 2012, with 50% of such phantom units to vest 25% per year

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commencing on March 31, 2014 and on March 31 of each year thereafter through March 31, 2017 and the other 50% of such phantom units to vest based on the same specified performance criteria (e.g., attaining specified DCF levels) as 50% of the phantom units awarded to each of the other Senior Executives on January 1, 2013 vest.

(c) Executive shall further be eligible to receive additional annual awards under the LTIP, as determined by the Board based upon the recommendation of the Compensation Committee, which additional annual awards will have a value of up to 50% of target compensation (annual base salary plus target annual bonus), with vesting at 25% per year over four years and/or based on achievement of specified performance criteria (e.g., attaining specified DCF levels).

For purposes hereof, “LTIP” means Company’s Amended and Restated Long-Term Incentive Plan, effective on June 18, 2010, and if hereafter further amended by Company then as hereafter so further amended.

(v) Change of Control Acceleration – In the event of a Change of Control (as defined in the LTIP in its form as in effect on the Effective Date), and notwithstanding any applicable vesting schedule, all awards granted to Executive under the LTIP shall immediately vest.

3.3 Other Perquisites . During his employment with Company, Executive shall be afforded the following benefits as incidences of his employment (all of such benefits hereinafter collectively referred to as the “Other Benefits”):

(i) Business and Entertainment Expenses – Subject to Company’s standard policies and procedures with respect to expense reimbursement as applied to its executive employees generally, Company shall reimburse Executive for, or pay on behalf of Executive, reasonable and appropriate expenses incurred by Executive for business-related purposes, including dues and fees to industry and professional organizations, professional licensing, and costs of entertainment and business development.

(ii) Vacation and Holidays – For the remainder of calendar year 2012 Executive shall be entitled to two weeks of paid vacation, and for calendar year 2013 and each calendar year thereafter during the period of his employment Executive shall be entitled to four weeks of paid vacation. Such paid vacation shall be considered earned in accordance with Company’s vacation policy as in effect from time to time for Senior Executives. Executive shall also be provided paid time off for the observance of all holidays provided to Senior Executives of Company generally.

(iii) Other Company Benefits – Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans and programs, including improvements or modifications of the same, which are now, or may hereafter be, available to other executive employees of Company. Such benefits, plans and programs shall include, without limitation, any profit sharing

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plan, thrift plan, health insurance or health care plan, life insurance, disability insurance, pension plan, supplemental retirement plan, vacation and sick leave plan, and the like which may be maintained by Company. Executive shall also be provided a Company-paid membership at the Capital Club, currently located in the same building as Company’s executive offices. In the event of the closure or relocation of the Capital Club, Executive shall be entitled to a Company-paid membership in a similar club located near Company’s executive offices.

(iv) Automobile-Related Expenses – For each month during the period of his employment, Executive shall be entitled to an automobile allowance in the amount of $600. Also, Executive shall have the use without charge of parking for one automobile in the garage facility connected to the building in which Company’s executive offices are located, or if there is no such connected facility then the use without charge of parking for one automobile at a parking facility located near to Company’s executive offices.

(v) Relocation Costs –In connection with Executive’s relocation from Lower Gwynedd, Pennsylvania to the Columbus, Ohio area, Company shall reimburse Executive for all reasonable costs of such relocation, not to exceed $15,000, including without limitation reasonable costs for house/apartment hunting, transportation, and the packing, moving and unpacking of household goods.

ARTICLE 4: EFFECT OF TERMINATION ON COMPENSATION

4.1 Termination by Expiration . If Executive’s employment hereunder shall be terminated by expiration of the term as provided in paragraph 2.1 (including any extensions of the term of this Agreement thereunder) because either party has provided an Expiration Notice, Executive’s employment with Company shall nonetheless continue until such employment is actually terminated by either Company or Executive upon such expiration or at any time thereafter, with such actual termination and the effective date thereof to be stated in a written notice to the other party which is provided in accordance with paragraph 8.1, and, in the case of a termination following such expiration by Executive for Good Reason (as described below), such notice shall be provided in accordance with paragraph 2.4 and the Good Reason Termination Procedure shall apply to any such termination. In the event an Expiration Notice is provided by either party, all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, and thereafter Executive shall receive such compensation and benefits as are determined by Company (it being understood that determinations by Company in this regard could provide Executive with Good Reason for purposes of the immediately following sentence) until his employment with Company is actually so terminated. Upon such actual termination of Executive’s employment with Company, Executive shall be paid all accrued but unpaid base salary on the next payroll date and any accrued bonus due under and as provided in paragraph 3.2(iii)(c), and otherwise all compensation and benefits for Executive shall terminate contemporaneously with termination of his employment with Company, except as otherwise provided in the following sentence or under any other agreement or plan of Company that provides post-termination benefits. Upon any such actual termination of Executive’s employment with Company which is upon or following the expiration of the term as described in paragraph 2.1 where the Expiration Notice was given by Company, and subject to paragraph 4.5, if Executive’s employment with Company has been

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terminated (a) by Company and such termination is for any reason other than a reason encompassed by paragraph 2.2(i), 2.2(ii), or 2.2(iii) or (b) by Executive for Good Reason (assuming for purposes of these clauses (a) and (b) only that this Agreement were still in effect continually until and also at the time of any such termination), then Company shall provide Executive with a lump sum cash termination payment in an amount equal to two times Executive’s annual base salary at the highest rate in effect at any time upon or following expiration of the term as provided in paragraph 2.1. Subject to paragraph 4.4, any lump sum cash termination payment due to Executive pursuant to the preceding sentence shall be paid to Executive on the 60th day after the date of Executive’s actual termination of employment with Company. For purposes of clarity, Executive’s termination of employment hereunder by expiration of the term as provided in paragraph 2.1 is the only circumstance where Executive’s employment with Company may continue following a termination of employment hereunder, so that a termination of Executive’s employment hereunder under any other provisions of this Agreement automatically also results in an actual termination of Executive’s employment with Company.

4.2 Termination by Company . If Executive’s employment shall be terminated by Company, then, upon such termination, except as hereinafter provided, Executive shall be paid all accrued but unpaid base salary on the next payroll date and any accrued bonus due under and as provided in paragraph 3.2(iii)(c), and otherwise all compensation and benefits for Executive hereunder shall terminate contemporaneously with the termination of such employment, except for all Other Benefits that are accrued but unused, incurred but unreimbursed or otherwise owing, as applicable, to Executive as of the date of termination; provided, however, that, subject to paragraph 4.5, if such termination shall not be due to any event or circumstance described in paragraph 2.2(i), 2.2(ii) or 2.2(iii), then Company shall provide Executive with a lump sum cash payment equal to two times Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of such termination, plus all Other Benefits that are accrued but unused, incurred but unreimbursed or otherwise owing, as applicable, to Executive as of such date. Subject to paragraph 4.5, any severance payment due to Executive pursuant to this paragraph shall be paid to Executive on the 60 ^th day after the date of Executive’s termination of employment with Company.

4.3 Termination by Executive . If Executive’s employment shall be terminated by Executive at any time, then, upon such termination, except as hereinafter provided, Executive shall be paid all accrued but unpaid base salary on the next payroll date and any accrued bonus due under and as provided in paragraph 3.2(iii)(c), and otherwise all compensation and benefits for Executive shall terminate contemporaneously with the termination of such employment, except for all Other Benefits that are accrued but unused, incurred but unreimbursed or otherwise owing, as applicable, to Executive as of the date of termination; provided, however, that, subject to paragraph 4.5, if such termination occurs for Good Reason then Company shall provide Executive with the severance payment provided for in paragraph 4.2 plus all Other Benefits that are accrued but unused, incurred but unreimbursed or otherwise owing, as applicable, to Executive as of such date. Subject to paragraph 4.5, any severance payment due to Executive pursuant to this paragraph shall be paid to Executive on the 60 ^th day after the date of Executive’s termination of employment with Company.

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4.4 Additional Severance Benefits . In the event of any termination of Executive’s employment where Executive is entitled to receive a termination or severance payment under any of paragraph 4.1, paragraph 4.2 or paragraph 4.3 (a “Basic Termination/Severance Payment”), Executive shall be entitled to receive as additional severance benefits (i) to the extent that Executive elects to continue coverage under any ERISA welfare benefit plan subject to the requirements of section 601 of ERISA, payment (as they become due) of any premiums due from Executive as the result of such election, (ii) the aggregate amount of lease payments to which Executive is obligated at the time of his termination of employment under a lease for rental housing in Columbus, Ohio (provided that there shall not be included in such additional severance benefit any lease payment amounts in excess of $2,500 per month or due under a lease for any remaining term after December 31, 2013 except to the extent such remaining term is the remainder of the shortest term (e.g., 6 months) for which such lease could have been entered into or renewed at normal market rates at the time it was entered into or renewed) and (iii) if there has been a Change of Control after December 31, 2013 in connection with the termination of employment giving rise to Executive’s right to receive a Basic Termination/Severance Payment, an additional amount equal to one times Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date Executive became entitled to receive a Basic Termination/Severance Payment. Subject to paragraph 4.5, any additional severance benefit due to Executive pursuant to clause (ii) and/or (iii) above of this paragraph shall be paid to Executive on the 60 ^th day after the date of Executive’s termination of employment with Company.

4.5 Release and Full Settlement . Anything to the contrary herein notwithstanding, as a condition to the receipt of any termination or severance payment under any of paragraph 4.1, paragraph 4.2, paragraph 4.3 and/or paragraph 4.4, Executive shall first execute a release, in the form of the Agreement and Release attached hereto, releasing the Board, Company, and Company’s parent, subsidiaries, affiliates, and their respective equityholders, partners, officers, directors, employees, attorneys and agents from any and all claims and from any and all causes of action of any kind or character including, without limitation, all claims or causes of action arising out of Executive’s employment with Company or its affiliates or the termination of such employment, but excluding all claims to vested benefits and payments Executive may have under any compensation or benefit plan, program or arrangement, including this Agreement. Executive shall provide such release no later than 50 days after the date of his termination of employment with Company and, as a condition to Company’s obligation to pay and provide any termination or severance payment in accordance with paragraph 4.1, paragraph 4.2, paragraph 4.3 and/or paragraph 4.4, Executive shall not revoke such release. The performance of Company’s obligations hereunder and the receipt of any termination or severance payment provided under paragraph 4.1, paragraph 4.2, paragraph 4.3 and/or paragraph 4.4 shall constitute full settlement of all such claims and causes of action.

4.6 No Duty to Mitigate Losses . Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 4. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 4 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 4.

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4.7 Liquidated Damages . In light of the difficulties in estimating the damages for an early termination of Executive’s employment under this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 4 shall be received by Executive as liquidated damages.

4.8 Section 409A Matters . Notwithstanding any provision in this Agreement to the contrary, if Executive is a specified employee (within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable administrative guidance thereunder and determined in accordance with any method selected by Company that is permitted under the regulations issued under Section 409A of the Code), and the payment of any amount or benefit under this Agreement to or on behalf of Executive would be subject to additional taxes and interest under Section 409A of the Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder, then any such payment or benefit that Executive would otherwise be entitled to during the first six months following the date of Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance thereunder) shall be accumulated and paid or provided, as applicable, on the date that is six months after Executive’s separation from service (or if such date does not fall on a business day of Company, the next following business day of Company), or such earlier date upon which such amount can be paid or provided under Section 409A of the Code without being subject to such additional taxes and interest; provided, however, that Executive shall be entitled to receive the maximum amount permissible under Section 409A of the Code and the applicable administrative guidance thereunder during the six-month period following his separation from service that will not result in the imposition of any additional tax or penalties on such amount. For all purposes of this Agreement, Executive shall be considered to have terminated employment with Company when Executive incurs a “separation from service” with Company within the meaning of Section 409A(a)(2)(A)(i) of the Code and the applicable administrative guidance issued thereunder. To the extent that Section 409A of the Code is applicable to this Agreement, the provisions of this Agreement shall be interpreted as necessary to comply with such section and the applicable administrative guidance issued thereunder.

4.9 Golden Parachute Provisions . If either Company or Executive believes that any payment or benefit received or to be received by Executive in connection with a Change of Control or the termination of Executive’s employment, whether pursuant to the terms of this Agreement, the LTIP, or any other plan, arrangement or agreement with Company, any person whose actions result in a Change of Control or any person affiliated with Company or such person (all such payments and benefits, including the payments and benefits provided for hereunder, hereinafter the “Total Payments”), will be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then an initial determination as to whether the Excise Tax will be imposed and the amount of the Excise Tax shall be required pursuant to this Agreement. Such determination shall be made at Company’s expense by an accounting or consulting firm (the “Consultant”) selected by Company and reasonably acceptable to Executive. The Consultant shall provide its determination, together with detailed supporting calculations and documentation, to Company and Executive within 20 days after the date of such Change of Control or termination of Executive’s employment, or such other time as reasonably requested by Company or by Executive, and, if the Consultant determines that no Excise Tax is payable by Executive with respect to a payment or payments, it shall furnish Executive with an opinion

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reasonably acceptable to Executive that no Excise Tax will be imposed with respect to any such payment or payments. Within 10 days after the Consultant delivers its determination to Executive, Executive shall have the right to dispute the determination. The existence of a dispute shall not in any way affect Executive’s right to receive any portion of the Total Payments. If there is no dispute, the determination shall be final and conclusive with regard to Company’s treatment and reporting of the Total Payments (but such determination shall not prevent Executive from disputing liability for the Excise Tax in any controversy with the Internal Revenue Service or other taxing authority). If there is a dispute, then Company and Executive shall together select a second Consultant, who will review the determination and Executive’s basis for the dispute and then render its own determination, which determination shall be binding, final and conclusive on Company. Company shall bear all costs associated with that determination.

4.10 Separate Agreements, Plans and Other Documents Describing Benefits . This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to his ownership rights in Company and Oxford LP and Other Benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters. Notwithstanding anything to the contrary herein, in connection with any termination of employment of Executive, in the case of any Other Benefit to which Executive may be entitled that is governed by the terms of any written plan, policy or agreement of Company, Executive’s entitlement to such benefit and the timing of any payment thereof shall be determined under the applicable provisions of such plan, policy or agreement.

ARTICLE 5: PROTECTION OF CONFIDENTIAL INFORMATION

5.1 Disclosure to and Property of Company . All information, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by Executive, individually or in conjunction with others, during the period of Executive’s employment with Company (whether during business hours or otherwise and whether on Company’s premises or otherwise) that relate to Company’s (or any of its affiliates’) business, trade secrets, products or services (including, without limitation, all such information relating to corporate opportunities, product specification, compositions, manufacturing and distribution methods and processes, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisitions prospects, the identity of customers or their requirements, the identity of key contacts within the customers’ organizations or within the organization of acquisition prospects, marketing and merchandising techniques, business plans, computer software or programs, computer software and database technologies, prospective names and marks) (collectively, “Confidential Information”) shall be disclosed to Company and are and shall be the sole and exclusive property of Company (or its affiliates). Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression

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(collectively, “Work Product”) are and shall be the sole and exclusive property of Company (or its affiliates). Upon Executive’s termination of employment with Company, for any reason, Executive promptly shall deliver such Confidential Information and Work Product, and all copies thereof, to Company.

5.2 Disclosure to Executive . Company has disclosed and will disclose to Executive, or place Executive in a position to have access to or develop, Confidential Information and Work Product of Company (or its affiliates), and/or has entrusted and will entrust Executive with business opportunities of Company (or its affiliates), and/or has placed and will place Executive in a position to develop business good will on behalf of Company (or its affiliates). Executive agrees to preserve and protect the confidentiality of all Confidential Information and Work Product of Company (or its affiliates).

5.3 No Unauthorized Use or Disclosure . Executive agrees that he shall not, at any time during or after Executive’s employment with Company, make any unauthorized disclosure of, and shall prevent the removal from Company premises of, Confidential Information or Work Product of Company (or its affiliates), or make any use thereof, except in the carrying out of Executive’s responsibilities during the course of Executive’s employment with Company. Executive shall use commercially reasonable efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by him hereunder to observe the terms and conditions set forth herein as though each such person or entity was bound hereby. Executive shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by law; provided, however, that, in the event disclosure is required by applicable law, Executive shall provide Company with prompt notice of such requirement prior to making any such disclosure, so that Company may seek an appropriate protective order or otherwise contest such disclosure. At the request of Company at any time, Executive agrees to deliver to Company all Confidential Information that he may possess or control. Executive agrees that all Confidential Information of Company (whether now or hereafter existing) conceived, discovered or made by him during the period of Executive’s employment with Company exclusively belongs to Company (and not to Executive), and Executive shall promptly disclose such Confidential Information to Company and perform all actions reasonably requested by Company to establish and confirm such exclusive ownership. Affiliates of Company shall be third party beneficiaries of Executive’s obligations under this Article 5. As a result of Executive’s employment with Company, Executive may also from time to time have access to, or knowledge of, Confidential Information or Work Product of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party Confidential Information and Work Product to the same extent, and on the same basis, as Company’s Confidential Information and Work Product.

5.4 Ownership by Company . If, during Executive’s employment with Company, Executive creates any work of authorship fixed in any tangible medium of expression that is the subject matter of copyright (such as videotapes, written presentations, or acquisitions, computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural renditions, models, manuals, brochures, or the like) relating to Company’s business, products, or services, whether such work is created solely by Executive or jointly with others (whether during business hours or otherwise and whether on Company’s premises or otherwise), including any Work

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Product, Company shall be deemed the author of such work if the work is prepared by Executive in the scope of Executive’s employment; or, if the work is not prepared by Executive within the scope of Executive’s employment but is specially ordered by Company as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, or as an instructional text, then the work shall be considered to be work made for hire and Company shall be the author of the work. If such work is neither prepared by Executive within the scope of Executive’s employment nor a work specially ordered that is deemed to be a work made for hire, then Executive hereby agrees to assign, and by these presents does assign, to Company all of Executive’s worldwide right, title, and interest in and to such work and all rights of copyright therein.

5.5 Assistance by Executive . During the period of Executive’s employment with Company and thereafter, Executive shall assist Company and its nominee, at any time, in the protection of Company’s (or its affiliates’) worldwide right, title and interest in and to Work Product and the execution of all formal assignment documents requested by Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries.

5.6 Remedies . Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article 5 by Executive, and Company or its affiliates shall be entitled to enforce the provisions of this Article 5 by terminating payments then owing to Executive under this Agreement (except for any termination or severance payment under Article 4) or otherwise and to specific performance and injunctive relief as remedies for such breach or any threatened breach. Notwithstanding the preceding sentence, during any period in which Executive is alleged to be in breach of this Article 5 but during which he continues to be an employee of Company, Company shall not be entitled to terminate payments of base salary or annual bonus owing to Executive under paragraph 3.2. Such remedies shall not be deemed the exclusive remedies for a breach of this Article 5 but shall be in addition to all remedies available at law or in equity, including the recovery of damages from Executive and his agents.

ARTICLE 6: NON-COMPETITION OBLIGATIONS

6.1 Non-Competition Obligations . As part of the consideration for the compensation and benefits to be paid to Executive hereunder, to protect the trade secrets and confidential information of Company and its affiliates that have been or will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates, and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the provisions of this Article 6. Executive agrees that, during the period of Executive’s non-competition obligations hereunder, Executive shall not, directly or indirectly for Executive or for others:

(i)

during the term of his employment with Company, engage in any Business that is competitive with the Business conducted by Company, and following the date of termination of his employment with Company, engage in any coal or coal-related business within any state in which Company is at the time of such termination conducting any coal or coal-related business;

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(ii)

during the term of his employment with Company, render any advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, with any Business that is competitive with the Business conducted by Company, and following the date of termination of his employment with Company, render any advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any coal or coal-related business within any state in which Company is at the time of such termination conducting any coal or coal-related business;

(iii)

induce any employee of Company or its affiliates to terminate his or her employment with Company or its affiliates, or hire or assist in the hiring of any such employee by any person, association, or entity not affiliated with Company; or

(iv)

request or cause any customer of Company or its affiliates to terminate any business relationship with Company or its affiliates.

For purposes of this Article 6, “Business” shall mean any coal or coal-related business, aggregates business, or other type of business as to which the revenues of such business comprise seven and one-half percent or more of the lesser of the revenues of Oxford LP or the earnings of Oxford LP before interest, taxes, depreciation and amortization. The non-competition obligations under this Agreement shall apply during the period that Executive is employed with Company (but, during such employment, with the Business scope and geographic scope of such obligations measured as of the relevant date during Executive’s employment with Company). The non-competition obligations under this Agreement shall also continue for 12 months after the date of the termination of Executive’s employment in the event Executive is entitled to receive and receives any termination or severance payment under paragraph 4.1, paragraph 4.2, paragraph 4.3 and/or paragraph 4.4. Executive understands that the foregoing restrictions may limit Executive’s ability to engage in certain businesses during the period provided for above, but acknowledges that Executive will receive sufficiently high remuneration and other benefits under this Agreement to justify such restrictions.

6.2 Enforcement and Remedies . Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article 6 by Executive, and Company shall be entitled to enforce the provisions of this Article 6 by terminating any payments then owing to Executive under this Agreement (except for any termination or severance payment under Article 4) and/or to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article 6, but shall be in addition to all remedies available at law or in equity to Company, including, without limitation, the recovery of damages from Executive and Executive’s agents involved in such breach and remedies available to Company pursuant to other agreements with Executive.

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6.3 Reformation . It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article 6 to be reasonable and necessary to protect the proprietary information of Company and its affiliates. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such courts so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.

ARTICLE 7: NONDISPARAGEMENT

Executive shall refrain, both during the employment relationship and after the employment relationship terminates, from publishing any oral or written statements about Company, its affiliates, or any of such entities’ officers, employees, agents or representatives that (i) are slanderous, libelous, or defamatory; (ii) disclose private or confidential information about Company, its affiliates, or any of such entities’ business affairs, officers, employees, agents, or representatives; (iii) constitute an intrusion into the seclusion or private lives of the officers, employees, agents, or representatives of Company or its affiliates; (iv) give rise to unreasonable publicity about the private lives of the officers, employees, agents, or representatives of Company or its affiliates; (v) place Company, its affiliates, or any of such entities’ officers, employees, agents, or representatives in a false light before the public; or (vi) constitute a misappropriation of the name or likeness of Company, its affiliates, or any of such entities’ officers, employees, agents, or representatives. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded Company and its affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law.

Company agrees that, both during Executive’s employment relationship and after the employment relationship terminates, Company, its affiliates, and such entities’ officers, employees, agents or representatives shall refrain from publishing any oral or written statements about Executive that (i) are slanderous, libelous, or defamatory; (ii) disclose private or confidential information about Executive; (iii) constitute an intrusion into the seclusion or private life of Executive; (iv) give rise to unreasonable publicity about the private life of Executive; (v) place Executive in a false light before the public; or (vi) constitute a misappropriation of the name or likeness of Executive. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded Executive under this provision are in addition to any and all rights and remedies otherwise afforded by law.

The nondisparagement obligations of this Article 7 shall not apply to communications with law enforcement or required testimony under law or court process.

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ARTICLE 8: MISCELLANEOUS

8.1 Notices . For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:


If to Company to:		Oxford Resources GP, LLC
		41 South High Street
		Suite 3450
		Columbus, Ohio 43215
		Attention: Chairman of the Board

with a copy to:		AIM Infrastructure MLP Fund, L.P.
		950 Tower Lane
		Suite 800
		Foster City, California 94404
		Attention: Brian D. Barlow and Matthew P. Carbone

If to Executive to:		Bradley W. Harris
		1448 Evans Road
		Lower Gwynedd, Pennsylvania 19002

with a copy to:		Dinsmore & Shohl, LLP
		900 Lee Street
		Suite 600
		Charleston, West Virginia 25301
		Attention: Ashley C. Pack

or to such other address as either party may furnish to the other party in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

8.2 Applicable Law . This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Ohio.

8.3 No Waiver . No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

8.4 Severability . If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

8.5 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

8.6 Withholding of Taxes and Other Employee Deductions . Company may withhold from any benefits and payments made pursuant to this Agreement or otherwise all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

-16-

8.7 Headings . The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

8.8 Gender and Plurals . Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

8.9 Affiliate . As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with Company.

8.10 Assignment and Assumption . This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. This Agreement shall also be binding upon and inure to the benefit of Executive and his heirs. Except as provided in the preceding provisions of this paragraph, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

8.11 Term . This Agreement has a term co-extensive with the term of employment provided for in Article 2. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination. The provisions of paragraphs 2.4 and 2.5 and Articles 4, 5, 6, 7 and 8 shall survive any termination of this Agreement.

8.12 Entire Agreement . Except as provided in the Excepted Plans/Agreements (as defined below), as of the Effective Date, this Agreement shall constitute the entire agreement of the parties with regard to the subject matter hereof, and shall contain all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive with Company. Any modification of this Agreement shall be effective only if it is in writing and signed by the party to be charged. For purposes hereof, the “Excepted Plans/Agreements” are (i) the written benefit plans and programs referenced in paragraph 3.3(iii) and 3.3(iv) (and any agreements between Company and Executive that have been executed under such plans and programs) and paragraph 4.9, (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive and (iii) any exceptions provided for in the terms of this Agreement.

8.13 Legal Expenses; Indemnification . Company shall reimburse Executive for his reasonable attorneys’ fees, not to exceed $5,000, in connection with the review and negotiation of this Agreement. In addition, if Executive incurs legal costs and expenses (including reasonable attorneys’ fees) in any contest relating to rights under this Agreement and prevails in such contest, Company shall reimburse Executive (and his heirs, executors, and administrators) for his reasonable legal costs and expenses (including reasonable attorneys’ fees) incurred with respect to such contest. Executive shall be indemnified and held harmless by Company during the term of this Agreement and following any termination of this Agreement for any reason whatsoever in the same manner as would any other executive employee of Company with respect to acts or omissions occurring prior to the termination of employment of Executive.

-17-

8.14 Liability Insurance . Company shall maintain a directors’ and officers’ insurance liability policy throughout the term of this Agreement and shall provide Executive with coverage under such policy on terms and for amounts not less favorable to Executive than provided to other Senior Executives.

8.15 Arbitration .

(i) Company and Executive agree to submit to final and binding arbitration any and all disputes or disagreements concerning the interpretation or application of this Agreement, the termination of this Agreement, or any other aspect of the Executive’s employment relationship with Company or the termination thereof. Any such dispute or disagreement shall be resolved by arbitration in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association before a single arbitrator. Arbitration shall take place in Columbus, Ohio, unless the parties mutually agree to a different location. Company and Executive agree that the decision of the arbitrator shall be final and binding on both parties. Any court having jurisdiction may enter a judgment upon the award rendered by the arbitrator. The costs of the proceedings shall be borne equally by the parties unless the arbitrator orders otherwise.

(ii) Notwithstanding the provisions of paragraph 8.15(i), (a) Company may, if it so chooses, bring an action in any court of competent jurisdiction for temporary or preliminary injunctive relief to enforce Executive’s obligations under Article 5, 6 or 7, pending a decision by the arbitrator in accordance with paragraph 8.15(i), and (b) Executive may, if he so chooses, bring an action in any court of competent jurisdiction for temporary or preliminary injunctive relief to enforce Company’s obligations under Article 7, pending a decision by the arbitrator in accordance with paragraph 8.15(i).

[ Signature page follows. ]

-18-

IN WITNESS WHEREOF , Company and Executive have executed this Agreement effective as of the Effective Date.


Oxford Resources GP, LLC

By:		/s/ Charles C. Ungurean
Name:		Charles C. Ungurean
Title:		President and Chief Executive Officer

		“COMPANY”

/s/ Bradley W. Harris

Bradley W. Harris

“EXECUTIVE”

[Signature Page to Employment Agreement]

AGREEMENT AND RELEASE

This Agreement and Release (this “Agreement and Release”) is entered into, effective as of [Date] (the “Effective Date”), by and between Bradley W. Harris (together with his heirs, administrators, executors and other personal representatives, collectively “Employee”) and Oxford Resources GP, LLC (together with each of its past and present parents, subsidiaries, affiliates, and their respective equityholders, partners, officer, directors, employees, attorneys and agents, collectively the “Company”).

This Agreement and Release serves as an agreement and release between Employee and the Company in connection with Employee’s termination of employment with the Company, as follows:

1. Background . Employee was employed as an executive of the Company in accordance with the terms of any Employment Agreement dated August 15, 2012 (the “Employment Agreement”), and his employment with the Company has now terminated. By reason of such termination, Employee is entitled to various benefits under the Employment Agreement including without limitation termination or severance benefits (“Termination/Severance Benefits”), some of which Termination/Severance Benefits are conditioned upon Employee executing this Agreement and Release. While this Agreement and Release is a prerequisite to Employee’s receipt of some of such Termination/Severance Benefits, this Agreement and Release shall not otherwise in any way affect such Termination/Severance Benefits.

2. Release . In consideration of his receipt of the Termination/Severance Benefits, Employee hereby waives, releases, acquits, and discharges the Company from any and all claims, causes of action, demands, judgments, damages, expenses, and liabilities that Employee ever had, now has, or may have against the Company, whether known or unknown or suspected by Employee to exist, through the date of this Agreement and Release, including, without limitation, any such claims, causes of action, demands, judgments, damages, expenses, or liabilities arising out of Employee’s employment with the Company or the termination of such employment with the Company, or pursuant to any contract, implied contract, or other common law theory of recovery, or under any federal, state, or local laws, ordinances, or regulations, including, without limitation, those arising under the Age Discrimination in Employment Act of 1967 (ADEA), the Older Workers Benefits Protection Act (OWBPA), or the Uniformed Services Employment and Reemployment Rights Act (USERRA), but excluding all claims to vested benefits and payments Employee may have under any compensation or benefit plan, program or arrangement, including the Employment Agreement. Additionally, Employee waives and releases any right Employee may have to recover any damages resulting from any action or suit instituted on Employee’s behalf by the Equal Employment Opportunity Commission, Ohio Civil Rights Commission, or other fair employment practices agency. Employee represents and agrees that Employee has not assigned or transferred any of the released claims, or any portion thereof, to a third person.

3. Nonadmission . Nothing in this Agreement and Release is to be construed as an admission of liability by the Company of any discriminatory conduct or practice or any other unlawful conduct.

4. Confidentiality . The circumstances leading up to this Agreement and Release and the terms of this Agreement and Release shall remain confidential and shall not be disclosed in any manner by the Company to any third person other than its advisors or by Employee to any third person other than his advisors, or as required by law.

5. Period of Consideration . Employee agrees that he has read and fully understands the terms of this Agreement and Release. Employee agrees that he is signing this Agreement and Release voluntarily. Employee further acknowledges that he has been given a period of twenty-one (21) days to consider this Agreement and Release. Thereafter, unless Employee accepts this Agreement and Release within this twenty-one (21) day period, this Agreement and Release will be withdrawn in its entirety. Employee is encouraged to seek legal counsel prior to executing this Agreement and Release.

6. Revocation . Employee has the right to revoke this Agreement and Release within seven (7) days of signing it. This Agreement and Release will not be effective or enforceable until the seven (7) day revocation period has expired. To revoke this Agreement and Release, Employee must send a registered letter to: Oxford Resources GP, LLC, 41 South High Street, Suite 3450, Columbus, Ohio 43215-6150, Attention: Chief Legal Officer. To be effective, this notice of revocation must be received at such address before the close of business on the seventh (7 ^th ) day after Employee signs this Agreement and Release.

7. Governing Law . This Agreement and Release shall be governed by Ohio law, and Ohio courts shall have jurisdiction over any disputes arising under this Agreement and Release.

EMPLOYEE REPRESENTS THAT EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT AND RELEASE CONSISTING OF THREE (3) PAGES, INCLUDING THE SIGNATURE PAGE, AND FULLY UNDERSTANDS ALL OF THE TERMS. EMPLOYEE ACKNOWLEDGES THAT HE WAS GIVEN UP TO TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT AND RELEASE, THAT HE WAS ADVISED TO CONSULT WITH LEGAL COUNSEL PRIOR TO SIGNING THIS AGREEMENT AND RELEASE, AND THAT HE HAS THE RIGHT TO REVOKE THIS AGREEMENT AND RELEASE, IN WRITING, FOR A PERIOD NOT TO EXCEED SEVEN (7) DAYS AFTER THE DATE ON WHICH IT IS SIGNED BY EMPLOYEE. TO REVOKE THIS AGREEMENT AND RELEASE, EMPLOYEE MUST SEND A REGISTERED LETTER TO: OXFORD RESOURCES GP, LLC, 41 SOUTH HIGH STREET, SUITE 3450, COLUMBUS, OHIO 43215-6150, ATTENTION: CHIEF LEGAL OFFICER, WHICH IN ORDER TO BE AN EFFECTIVE REVOCATION MUST BE RECEIVED AT SUCH ADDRESS BEFORE THE CLOSE OF BUSINESS ON THE SEVENTH (7 ^TH ) DAY AFTER EMPLOYEE SIGNS THIS AGREEMENT AND RELEASE. THE PARTIES HEREBY

ACKNOWLEDGE THAT, IF EMPLOYEE DOES NOT EXERCISE THIS RIGHT TO REVOKE, THIS AGREEMENT AND RELEASE WILL BE A BINDING CONTRACT IN ACCORDANCE WITH ITS TERMS. EMPLOYEE ALSO REPRESENTS THAT EMPLOYEE HAS HAD A FULL OPPORTUNITY TO HAVE THIS AGREEMENT AND RELEASE REVIEWED BY LEGAL COUNSEL SELECTED BY EMPLOYEE. EMPLOYEE ADDITIONALLY REPRESENTS THAT EMPLOYEE UNDERSTANDS THE CONTENT AND CONSEQUENCES OF SIGNING THIS AGREEMENT AND RELEASE AND THAT EMPLOYEE EXECUTES IT AS HIS OWN FREE ACT AND DEED INTENDING TO BE LEGALLY BOUND BY IT. EMPLOYEE FURTHER REPRESENTS THAT EMPLOYEE UNDERSTANDS THAT EMPLOYEE IS WAIVING, AMONG OTHER THINGS, ANY RIGHTS OR CLAIMS ARISING UNDER FEDERAL OR STATE LAW.



Bradley W. Harris

Date:

Oxford Resources GP, LLC

By:

Name:

Title:

Date:

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Charles C. Ungurean, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Oxford Resource Partners, LP;

Based on my knowledge, this Quarterly Report on Form 10-Q does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report on Form 10-Q;

Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report on Form 10-Q, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report on Form 10-Q;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report on Form 10-Q is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Quarterly Report on Form 10-Q our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q based on such evaluation; and

Disclosed in this Quarterly Report on Form 10-Q any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2012


By:		/s/ CHARLES C. UNGUREAN
		Charles C. Ungurean
		President and Chief Executive Officer of Oxford Resources GP, LLC (the general partner of Oxford Resource Partners, LP)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Bradley W. Harris, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Oxford Resource Partners, LP;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2012


By:		/s/ BRADLEY W. HARRIS
		Bradley W. Harris
		Senior Vice President, Chief Financial Officer and Treasurer of Oxford Resources GP, LLC (the general partner of Oxford Resource Partners, LP)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Oxford Resource Partners, LP (the “Partnership”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles C. Ungurean, President and Chief Executive Officer of Oxford Resources GP, LLC, the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: November 7, 2012


By:		/s/ CHARLES C. UNGUREAN
		Charles C. Ungurean
		President and Chief Executive Officer of Oxford Resources GP, LLC (the general partner of Oxford Resource Partners, LP)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate document. A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Oxford Resource Partners, LP (the “Partnership”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bradley W. Harris, Senior Vice President, Chief Financial Officer and Treasurer of Oxford Resources GP, LLC, the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2)

information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: November 7, 2012


By:		/s/ BRADLEY W. HARRIS
		Bradley W. Harris
		Senior Vice President, Chief Financial Officer and Treasurer of Oxford Resources GP, LLC (the general partner of Oxford Resource Partners, LP)

Exhibit 95

Mine Safety Disclosure

The following disclosures are provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 104 of Regulation S-K, which require certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977.

During the third quarter of 2012, for each coal mine we operated: the total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under Section 104 of the Mine Act for which we received a citation from the Mine Safety and Health Administration (“MSHA”) was nine (9) as shown in the following Table OXF-MSHA-1; the total number of orders issued under Section 104(b) of the Mine Act was zero (0); the total number of citations and orders for unwarrantable failure to comply with mandatory health or safety standards under Section 104(d) of the Mine Act was zero (0); the total number of flagrant violations under Section 110(b)(2) of the Mine Act was zero (0); the total number of imminent danger orders issued under Section 107(a) of the Mine Act was zero (0); the total dollar value of the proposed assessments from MSHA under the Mine Act was $11,941; and the total number of mining-related fatalities was zero (0). In addition, no coal mine of which we were the operator received written notice from MSHA of a pattern of violations, or the potential to have such a pattern, of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards under Section 104(e) of the Mine Act. The legal actions pending before the Federal Mine Safety and Health Review Commission (the “Commission”) are shown in the following Table OXF-MSHA-2.

T ABLE : OXF-MSHA-1

Quarter Ended September 30, 2012


Mining Complex	(A) Section 104		(B) Section 104(b)		(C) Section 104(d)		(D) Section 110(b)(2)		(E) Section 107(a)		(F) Proposed Assessments		(G) Fatalities		(H) Pending Legal Action
Cadiz		3		—		—		—		—	$	400		—		1
Tuscarawas County		2		—		—		—		—	$	424		—		—
Belmont County		—		—		—		—		—	$	262		—		4
Plainfield		1		—		—		—		—	$	100		—		—
New Lexington		—		—		—		—		—	$	8,658		—		—
Harrison		—		—		—		—		—	$	1,330		—		3
Noble County		1		—		—		—		—		—		—		—
Muhlenberg County		2		—		—		—		—	$	767		—		7
Totals		9		—		—		—		—	$	11,941		—		15

(A)

The total number of violations of mandatory health or safety standards that could significantly and substantially (“S&S”) contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the Mine Act (30 U.S.C. 814) for which the operator received a citation from MSHA.

(B)	The total number of orders issued under section 104(b) of the Mine Act (30 U.S.C. 814(b)).

(C)	The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the Mine Act (30 U.S.C. 814(d)).

(D)	The total number of flagrant violations under section 110(b)(2) of the Mine Act (30 U.S.C. 820(b)(2)).

(E)	The total number of imminent danger orders issued under section 107(a) of the Mine Act (30 U.S.C. 817(a)).

(F)	The total dollar value of proposed assessments from MSHA under the Mine Act (30 U.S.C. 801 et seq.). Includes proposed assessments for non-S&S citations.

(G)	The total number of mining-related fatalities.

(H)	The number of legal actions pending before the Commission involving such coal or other mine. See Table OXF-MSHA-2 below for information regarding pending legal actions.

T ABLE : OXF-MSHA-2

Legal Actions Pending as of September 30, 2012

D OCKET N UMBER

MSHA M INE N AME

O XFORD M INE

C OMPLEX /N AME

MSHA ID N UMBER

C ITATION
N O .

D ATE
I SSUED

P ROPOSED
C IVIL
P ENALTY
A SSESSMENT

S TATUS

LAKE 2012-131

Sexton 2 Pit

Harrison

33-04577

8040748

9/9/2011

425

Citation for lack of handrail on both sides of steps leading to grease and oil storage trailer. An Answer to Petition was timely filed January 10, 2012. The parties reached a settlement modifying the citation to non-S&S/unlikely and reduced the penalty to $340. The Secretary filed a Motion for Order Approving Settlement on June 6, 2012, which is pending approval of Administrative Law Judge Robert J. Lesnick.

LAKE 2012-319

Oxford Loading Dock

Belmont

33-02937

8035306

8035307

8035308

8035309

8035310

6/22/2011

2,984

Five citations issued in connection with a contractor’s employee who fell from an elevated platform. A Petition for Assessment was filed by the Secretary on April 26, 2012, and the Answer was timely filed May 25, 2012.

LAKE 2012-482-R;

LAKE 2012 483-R;

LAKE 2012-484-R

Rice #1 Strip

Belmont

33-00965

7115094

7115095

7115096

2/28/2012

n/a

Two citations and one order issued February 28, 2012, in connection with a truck operator working under the bed of a truck while the bed was in the raised position. Oxford contested Order No. 7115094 and Citations No. 7115095 and 7115096 as Contestant in these matters.

LAKE 2012-571

Rice #1 Strip

Belmont

33-00965

7114872

7114877

7114873

7114874

7114875

6603798

6603799

7114887

7114878

7106175

7106176

7106177

2/23/2012

5,323

Thirteen citations issued in connection with four mobile loading and hauling vehicles, one auger, one drill and two areas where combustible materials had accumulated. A Petition for Assessment was filed by the Secretary on May 11, 2012, and the Answer was timely filed May 30, 2012.

7115103

3/9/2012

LAKE 2012-646

Sexton 2 Pit

Harrison

33-04577

7115108

7115109

7115119

7115121

7115122

7115123

3/15/2012

3/17/2012

1,140

Six citations issued in connection with two drills (one with a damaged hose and one with a damaged cable); one cable truck (work tie rod); an area where combustible materials had accumulated around an end loader and two incidents where life jackets were not provided at water holes in the pit surface. A Petition for Assessment was filed by the Secretary on July 9, 2012 and the Answer was timely filed July 24, 2012.

T ABLE : OXF-MSHA-2

Legal Actions Pending as of September 30, 2012


D OCKET N UMBER MSHA M INE N AME O XFORD M INE C OMPLEX /N AME MSHA ID N UMBER	C ITATION N O .	D ATE I SSUED		P ROPOSED C IVIL P ENALTY A SSESSMENT		S TATUS
LAKE 2012-647 Rice #1 Strip Belmont 33-00965	7115095 7115096 7115281		2/28/2012 3/27/2012	$	7,411	See description of LAKE 2012-483-R and LAKE 2012-484-R above regarding Citations 7115095 and 7115096. Citation 7115281 was issued in connection with dust control measures on the main haul road. A Petition for Assessment was filed by the Secretary on July 9, 2012, and the Answer was timely filed on July 20, 2012.

LAKE 2012-648 Snyder Mine Cadiz 33-04414	7114893 7115120 7115241 7115243 7115244 7115247		3/17/2012 3/21/2012 3/22/2012	$	2,708	Citations issued regarding a rock truck with a worn tire; a rock truck with a broken step; two front end loaders and a dozer with accumulations of combustible materials; and an accumulation of aerosol cans in fuel and storage area. A Petition for Assessment was filed by the Secretary on July 9, 2012, and the Answer was timely filed on July 20, 2012.

LAKE 2012-843 Sexton 2 Pit Harrison 33-04577	7103229 7103230 7103233 7103232		1/11/2012	$	1,230	Citations were issued in connection with 2 service trucks that had accumulations of combustible materials and holes in the guarding of a coal crusher drive sprocket and a tail roller. A Petition for Assessment was filed by the Secretary on September 24, 2012, and the Answer was filed October 1, 2012.

KENT 2012-1 Halls Creek Muhlenberg County 15-18134	7657071		7/18/2011	$	2,901	Citation issued regarding the dust collection system on a highwall drill with excessive visible dust. The citation was timely contested. Administrative Law Judge Robert J. Lesnick was assigned to the case. A Petition for Assessment was filed by the Secretary on February 9, 2012, and the Answer was timely filed February 27, 2012. On May 21, 2012 the parties reached a proposed settlement reducing the assessment to $2,500, which settlement is subject to approval by Administrative Law Judge Robert J. Lesnick.

KENT 2012-2 Rose France Muhlenberg County 15-19466	8503506 7657069		6/1/2011 7/5/2011	$ $	1,657 499	Citations issued regarding a haul truck with inside steel cords protruding through the sidewall, and a highwall drill with safety violations not recorded in pre-operation exam book. The citations were timely contested. Administrative Law Judge Robert J. Lesnick was assigned to the case. A Petition for Assessment was filed by the Secretary on February 8, 2012, and the Answer was timely filed February 27, 2012. On May 21, 2012 the parties reached a proposed settlement reducing the assessment on citation 8503506 from $1,657 to $500, which settlement is subject to approval by Administrative Law Judge Robert J. Lesnick.

T ABLE : OXF-MSHA-2

Legal Actions Pending as of September 30, 2012

D OCKET N UMBER

MSHA M INE N AME

O XFORD M INE

C OMPLEX /N AME

MSHA ID N UMBER

C ITATION
N O .

D ATE
I SSUED

P ROPOSED
C IVIL
P ENALTY
A SSESSMENT

S TATUS

KENT 2012-233

Rose France

Muhlenberg County

15-19466

7657085

8/30/2011

392

Citation issued regarding Mack Water Truck with rusted exhaust pipe. A Petition for Assessment was filed by the Secretary on April 2, 2012, and the Answer was timely filed May 3, 2012. On May 21, 2012 the parties reached a proposed settlement reducing the assessment to $275, which settlement is subject to approval by the Administrative Law Judge.

KENT 2012-750

Schoate Prep Plant

Muhlenberg County

15-19365

7657266

1/19/2012

392

Citation issued regarding accumulation of coal, coal dust and float coal dust on and around raw coal crusher hopper. A Petition for Assessment was filed by the Secretary on June 27, 2012, and the Answer was timely filed July 24, 2012. On July 20 the parties proposed to settle the matter for a reduced penalty of $100 and a modification of the citation from reasonably likely to unlikely.

KENT 2012-763

Halls Creek Mine

Muhlenberg County

15-18134

7657165

1/11/2012

540

Citation issued regarding a leaking fuel injector on a bulldozer. A Petition for Assessment was filed by the Secretary on June 27, 2012, and the Answer was timely filed July 24, 2012. On July 20 the parties proposed to settle the matter for a reduced penalty of $432.

KENT 2012-1171

Rose France Mine

Muhlenberg County

15-19466

7657277

7657280

3/6/2012

3/7/2012

Citation issued for inadequate guarding on alternator and air conditioner belts and pulleys on highwall drill. Citation issued for haul truck with oil leaking from brake housing area. On July 17, 2012, the Secretary requested a 90-day extension in which to file the Petition for Assessment of Civil Penalty.

KENT 2012-1508

Halls Creek Mine

Muhlenberg County

15-18134

8507007

8509238

8509239

6/19/2012

Three citations issued: one in connection with brakes on a Mack lube truck; and two in connection with Mack service truck with front brake push rods that showed excessive travel and air leaks when service brake applied. On September 11, 2012, the Secretary requested a 90-day extension in which to file the Petition for Assessment of Civil Penalty.