Thoroughbred Royalties

Thoroughbred receives royalties from minerals, coal, and oil and gas related properties. Thoroughbred owns mineral rights located in the Illinois Basin of western Kentucky containing more than 400 million tons of coal reserves as of December 31, 2016. Thoroughbred collects royalties and overriding royalties from these mineral rights. The basin is one of the most productive coal regions in the world and remains a growth market for coal given low-cost access to domestic and international transportation infrastructure, low delivery costs to power markets in the Eastern U.S. and an improving regulatory environment. According to Wood Mackenzie, production in the Illinois Basin is expected to grow from 98 Mtpa in 2017 to 125 Mtpa by 2030, representing 28% growth. Thoroughbred has a royalty interest in 1,100 acres of sand reserves in central Colorado. The sand reserve contains approximately 100 million tons of sand, 60 million tons of which is frac sand quality. This operation provdes sand at one of the lowest costs to the wellhead in the DJ Basin given the low production costs and significant transportation advantage compared with current frac sand arriving to the basin via rail.

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