Other Non-Mining
Other Non-Mining Operations:
In addition to our mining operations, we operate several subsidiaries which provide auxiliary services for our coal mining operations. Rhino Trucking provides our Kentucky coal operations with dependable, safe coal hauling to our preparation plants and loadout facilities and our southeastern Ohio coal operations with reliable transportation to our customers where rail is not available. Rhino Services is responsible for mine-related construction, site and roadway maintenance and post-mining reclamation. We have been able to efficiently supply internally the majority of these services, which were previously outsourced. Through Rhino Services, we plan and monitor each phase of our mining projects as well as the post-mining reclamation efforts. We also perform the majority of our drilling and blasting activities at our company-operated surface mines in-house rather than contracting to a third party. Triad Roof Support Systems manufactures roof control products used in underground coal mining.
Other Natural Resource Assets:
Oil and Gas
In addition to our coal operations, we have invested in oil and gas mineral rights that have begun to generate royalty revenues, which helps to diversify our income stream. We and an affiliate of Wexford Capital have participated with Gulfport Energy, a publicly traded company, to acquire an interest in a portfolio of oil and gas leases in the Utica Shale. During 2011, we completed the acquisitions of interests in a portfolio of leases in the Utica Shale region of eastern Ohio for a total purchase price of approximately $19.9 million. Also during 2011, we completed the acquisition of certain oil and gas mineral rights in the Cana Woodford region of western Oklahoma for a total purchase price of approximately $8.1 million. We began to receive royalty revenues from the Cana Woodford mineral rights in early 2012 and drilling began on initial wells on our acreage in the Utica Shale region in early 2012.
Limestone
Incidental to our coal mining process, we mine limestone from reserves located at our Sands Hill mining complex and sell it as aggregate to various construction companies and road builders that are located in close proximity to the mining complex when market conditions are favorable. We believe that our production of limestone provides us with an additional source of revenues at low incremental capital cost.