Westmoreland Announces Agreement to Contribute Kemmerer Mine to Westmoreland Resource Partners, LP

Westmoreland Coal Company

"Westmoreland") and Westmoreland Resource Partners, LP

"WMLP") announced today that WMLP has agreed to acquire 100% of the outstanding equity interests in Westmoreland Kemmerer LLC ("Kemmerer"), which owns and operates the Kemmerer Mine in Wyoming. Upon closing of the transaction, Westmoreland will receive $135 million of cash, $20 million of WMLP common units, and $75 million of new WMLP Class A convertible units. Since Westmoreland's acquisition of the Kemmerer Mine from Chevron in January 2012, management has significantly enhanced financial and operating performance, exceeding guidance, and signed a new labor agreement driving operational and productivity improvements while reducing safety citations and reportable incidents. "We are excited to announce the first transaction of our MLP drop-down strategy," said Keith E. Alessi, CEO of Westmoreland and WMLP. "We expect the contribution of Kemmerer to significantly expand the size of the production base at WMLP, diversify the customers we serve, and improve the stability of its cash flows through Kemmerer's long-term contracts. This transaction demonstrates Westmoreland's continued support of WMLP and our commitment to properly capitalize the partnership and position the balance sheet to fund future transactions." The acquisition, which is expected to close in the third quarter, is expected to be immediately accretive to distributable cash flow on a per unit basis to WMLP. Kemmerer will operate as a wholly-owned subsidiary of WMLP. When issued, the Series A convertible units will receive Paid-in-Kind ("PIK") distributions at a rate that mirrors distributions to the common units, and are subject to mandatory conversion into common units on a one-for-one basis upon the earlier of (i) WMLP paying a quarterly distribution of $0.22/unit to its common unitholders, a 10% increase to the current distribution of $0.20/unit, or (ii) 12 months following the close of the transaction. The transaction was approved by the Board of Directors of the general partner of WMLP and by the Conflicts Committee of the Board of Directors, which consists entirely of independent directors. The Conflicts Committee engaged Robert W. Baird & Co. to act as its independent financial advisor and to render a fairness opinion, and Akin Gump Strauss Hauer & Feld LLP to act as its legal advisor. BMO Capital Markets and Holland & Hart LLP acted as financial advisors and legal advisors, respectively, to Westmoreland. Westmoreland retained Houlihan Lokey to render a fairness opinion. The transaction is subject to a financing condition and other customary closing conditions.