(1) No distributions were paid on the subordinated units for the three and ninesix months ended SeptemberJune 30, 20162017 and 2015

See notes to unaudited condensed consolidated financial statements

2016.

RHINO RESOURCE PARTNERS LP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

See notes to unaudited condensed consolidated financial statements.

RHINO RESOURCE PARTNERS LP

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBERJUNE 30, 20162017 AND DECEMBER 31, 20152016 AND FOR THE THREE AND NINESIX MONTHS ENDED SEPTEMBER
JUNE 30, 20162017 AND 20152016

1. BASIS OF PRESENTATION AND ORGANIZATION

Basis of Presentation and Principles of Consolidation— The accompanying unaudited interim financial statements include the accounts of Rhino Resource Partners LP and its subsidiaries (the “Partnership”). Intercompany transactions and balances have been eliminated in consolidation.

Unaudited Interim Financial Information—The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. The condensed consolidated statement of financial position as of SeptemberJune 30, 2016,2017, condensed consolidated statements of operations and comprehensive income for the three and ninesix months ended SeptemberJune 30, 20162017 and 20152016 and the condensed consolidated statements of cash flows for the ninesix months ended SeptemberJune 30, 20162017 and 20152016 include all adjustments that the Partnership considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed consolidated statement of financial position as of December 31, 20152016 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S.”). The Partnership filed its Annual Report on Form 10-K for the year ended December 31, 20152016 with the Securities and Exchange Commission (“SEC”), which included all information and notes necessary for such presentation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year or any future period. These unaudited interim financial statements should be read in conjunction with the audited financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 20152016 filed with the SEC.

Reclassifications.Certain prior year amounts have been reclassified to discontinued operations on the unaudited condensed consolidated statements of operations and comprehensive income related to the disposal of the Elk Horn coal leasing business during 2016. See Note 3 for further information on the Elk Horn disposal.

Debt Classification— The Partnership evaluated its amended and restated senior secured credit facility at June 30, 2017 to determine whether this debt liability should be classified as a long-term or current liability on the Partnership’s unaudited condensed consolidated statements of financial position. On May 13, 2016, the Partnership entered into a fifth amendment (the “Fifth Amendment”) of its amended and restated agreement that initially extended the term of the senior secured credit facility to July 31, 2017. Per the Fifth Amendment, the term of the credit facility automatically extended to December 31, 2017 when the revolving credit commitments were reduced to $55 million or less as of December 31, 2016. As of December 31, 2016, the Partnership had met the requirements to extend the maturity date of the credit facility to December 31, 2017. Since the credit facility has an expiration date of December 2017, the Partnership determined that its credit facility debt liability at June 30, 2017 and December 31, 2016 of $12.3 million and $10.0 million, respectively, should be classified as a current liability on its unaudited condensed consolidated statements of financial position. The classification of the credit facility balance as a current liability raises substantial doubt of the Partnership’s ability to continue as a going concern for the next twelve months. The Partnership is considering alternative financing options that could result in a new long-term credit facility. Since the credit facility has an expiration date of December 31, 2017, the Partnership will have to secure alternative financing to replace its credit facility by the expiration date of December 31, 2017 in order to continue its normal business operations and meet its obligations as they come due. The financial statements do not include any adjustments relating to the recoverability and classification of assets carrying amounts or the amount of and classification of liabilities that may result should the Partnership be unable to continue as a going concern.

Organization—Rhino Resource Partners LP is a Delaware limited partnership formed on April 19, 2010 to acquire Rhino Energy LLC (the “Predecessor” or the “Operating Company”). The Operating Company and its wholly owned subsidiaries produce and market coal from surface and underground mines in Kentucky, Ohio, West Virginia, and Utah. The majority of sales are made to domesticelectric utilities and other coal-related organizations in the United States.

Reverse Unit Split

On April 18, 2016, the Partnership completed a 1-for-10 reverse split on its common units and subordinated units. Pursuant to the reverse split, common unitholders received one common unit for every 10 common units owned on April 18, 2016 and subordinated unitholders received one subordinated unit for every 10 subordinated units owned on April 18, 2016. All common and subordinated units, net income (loss) per unit and distribution per unit references included herein have been adjusted as if the change took place before the date of the earliest transaction reported. Any fractional units resulting from the reverse unit split were rounded to the nearest whole unit.

Royal Energy Resources, Inc. Acquisition

On January 21, 2016, a definitive agreement (“Definitive Agreement”) was completed between Royal Energy Resources, Inc. (“Royal”) and Wexford Capital LP (“Wexford Capital”) whereby Royal acquired 6,769,112676,911 issued and outstanding common units of the Partnership from Wexford Capital for $3.5 million. The Definitive Agreement also included the committed acquisition by Royal within sixty days from the date of the Definitive Agreement of all of the issued and outstanding membership interests of Rhino GP LLC, the general partner of the Partnership (the “General Partner”), as well as 9,455,252945,525 issued and outstanding subordinated units of the Partnership from Wexford Capital for $1.0 million.

On March 17, 2016, Royal completed the acquisition of all of the issued and outstanding membership interests of Rhino GP LLCthe General Partner as well as the 9,455,252945,525 issued and outstanding subordinated units from Wexford Capital. Royal obtained control of, and a majority limited partner interest, in the Partnership with the completion of this transaction.

On March 21, 2016, the Partnership and Royal entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which the Partnership issued 60,000,0006,000,000 common units in the Partnership to Royal in a private placement at $0.15$1.50 per common unit for an aggregate purchase price of $9.0 million. Royal paid the Partnership $2.0 million in cash and delivered a promissory note payable to the Partnership (“Rhino Promissory Note”) in the amount of $7.0 million. The promissory note iswas payable in three installments: (i) $3.0 million on July 31, 2016; (ii) $2.0 million on or before September 30, 2016 and (iii) $2.0 million on or before December 31, 2016. In the event the disinterested members of the board of directors of the General Partner determine that the Partnership does not need the capital that would be provided by either or both installments set forth in (ii) and (iii) above, in each case, the Partnership has the option to rescind Royal’s purchase of 13,333,3331,333,333 common units and the applicable installment will not be payable (each, a “Rescission Right”). If the Partnership fails to exercise a Rescission Right, in each case, the Partnership has the option to repurchase 13,333,3331,333,333 common units at $0.30$3.00 per common unit from Royal (each, a “Repurchase Option”). The Repurchase Options terminate on December 31, 2017. Royal’s obligation to pay any installment of the promissory note is subject to certain conditions, including that the Operating Company has entered into an agreement to extend the amended and restated credit agreement, as amended, to a date no sooner than December 31, 2017. In the event such conditions are not satisfied as of the date each installment is due, Royal has the right to cancel the remaining unpaid balance of the promissory note in exchange for the surrender of such number of common units equal to the principal balance of the promissory note divided by $0.15. On May 13, 2016 and September 30, 2016, Royal paid the Partnership $3.0 million and $2.0 million, respectively, for the promissory note installments that were due July 31, 2016 and September 30, 2016, respectively. The payments were made in relation to the fifth amendmentFifth Amendment of the amended and restated credit agreement completed on May 13, 2016. See Note 8 for more information on the fifth amendmentFifth Amendment to the amended and restated credit agreement. On December 30, 2016, the Partnership modified the Securities Purchase Agreement with Royal for the final $2.0 million payment due on or before December 31, 2016 to extend the due date to December 31, 2018 (see “Letter Agreement” discussion below).

Option Agreement-Armstrong Energy

On SeptemberDecember 30, 2016, the Partnership entered into an equity exchangeoption agreement (the “Agreement”“Option Agreement”) with Royal, Rhino ResourceResources Partners Holdings, LLC (“Rhino Holdings”), an entity wholly owned by certain investment partnerships managed by Yorktown Partners LLC (“Yorktown”), and the General Partner. Investment partnerships managed by Yorktown ownUpon execution of the Option Agreement, the Partnership received an option (the “Call Option”) from Rhino Holdings to acquire substantially all of the outstanding common stock of Armstrong Energy, Inc. (“Armstrong Energy”), a coal producing company with mines located that is currently owned by investment partnerships managed by Yorktown, representing approximately 97% of the outstanding common stock of Armstrong Energy. The Option Agreement stipulates that the Partnership can exercise the Call Option no earlier than January 1, 2018 and no later than December 31, 2019. In exchange for Rhino Holdings granting the Partnership the Call Option, the Partnership issued 5.0 million common units, representing limited partner interests in the Illinois Basin in western Kentucky.Partnership (the “Call Option Premium Units”) to Rhino Holdings upon the execution of the Option Agreement. The Option Agreement contemplates that prior to closing, Yorktown will contribute its shares ofstipulates the Partnership can exercise the Call Option and purchase the common stock of Armstrong Energy to Rhino Holdings. At the closing, Rhino Holdings will contribute those shares to the Partnership in exchange for 10 million newlya number of common units to be issued to Rhino Holdings, which when added with the Call Option Premium Units, will result in Rhino Holdings owning 51% of the fully diluted common units of the Partnership. The Agreementpurchase of Armstrong Energy through the exercise of the Call Option would also contemplates that the General Partner, currently owned and controlled byrequire Royal will issueto transfer a 50%51% ownership ofinterest in the General Partner to Rhino Holdings in connectionHoldings. The Partnership’s ability to exercise the Call Option is conditioned upon (i) sixty (60) days having passed since the entry by Armstrong Energy into an agreement with its bondholders to restructure its bonds and (ii) the issuanceamendment of the common unitsPartnership’s revolving credit facility to permit the acquisition of Armstrong Energy.

The Option Agreement also contains an option (the “Put Option”) granted by the Partnership to Rhino Holdings whereby Rhino Holdings has the right, but not the obligation, to cause the Partnership to purchase substantially all of the Partnership for theoutstanding common stock of Armstrong Energy. ClosingEnergy from Rhino Holdings under the same terms and conditions discussed above for the Call Option. The exercise of the AgreementPut Option is conditioneddependent upon (i) the current bondholders ofentry by Armstrong Energy agreeinginto an agreement with its bondholders to restructure theirits bonds and (ii) the Partnership refinancing its amendedtermination and restatedrepayment of any outstanding balance under the Partnership’s revolving credit agreement with funds from an equity investment into the Partnership to be arranged by Rhino Holdings. facility.

The Agreement is also subject to other standard closing conditions and required approvals. TheOption Agreement contains customary covenants, representations and warranties and indemnification obligations for breaches of, orlosses arising from the inaccuracy of representations or warranties or breaches of covenants contained in the Option Agreement, the Seventh Amendment (defined below) and associated agreements. Thethe GP Amendment (defined below). Upon the request by Rhino Holdings, the Partnership haswill also agreed to enter into a registration rights agreement with Rhino Holdings that provides Rhino Holdings with the right to demand two shelf registration statements and registration statements on Form S-1, as well as piggyback registration rights. The Agreement may be terminated by the mutual written consentrights for as long as Rhino Holdings owns at least 10% of the Partnership and Rhino Holdings or by either the Partnership or Rhino Holdings if: (i) the closing has not occurred on or before December 31, 2016 (unless the closing is as a result of such terminating party’s inability or failure to satisfy the conditionsoutstanding common units.

Pursuant to the closing or ifOption Agreement, the non-terminating party has filed an action seeking specific performance); (ii) a law or order issued by a governmental authority preventsSecond Amended and Restated Limited Liability Company Agreement of our general partner was amended (“GP Amendment”). Pursuant to the closing from occurring (unless such law or order resulted from such party’s failureGP Amendment, Mr. Bryan H. Lawrence was appointed to perform its obligations under the Agreement); (iii) the board of directors of our general partner as a designee of Rhino Holdings and Rhino Holdings has the General Partner failsright to approveappoint an additional independent director. Rhino Holdings has the transactionsright to appoint two members to the board of directors of our general partner for as long as it continues to own 20% of the common units on an undiluted basis. The GP Amendment also provided Rhino Holdings with the authority to consent to any delegation of authority to any committee of the board of our general partner. Upon the exercise of the Call Option or transaction documents contemplatedthe Put Option, the Second Amended and Restated Limited Liability Company Agreement of our general partner, as amended, will be further amended to provide that Royal and Rhino Holdings will each have the ability to appoint three directors and that the remaining director will be the chief executive officer of our general partner unless agreed otherwise.

Series A Preferred Unit Purchase Agreement

On December 30, 2016, the Partnership entered into a Series A Preferred Unit Purchase Agreement (the “Preferred Unit Agreement”) with Weston Energy LLC (“Weston”), an entity wholly owned by certain investment partnerships managed by Yorktown, and Royal. Under the Agreement; or (iv)Preferred Unit Agreement, Weston and Royal purchased 1,300,000 and 200,000, respectively, of Series A preferred units representing limited partner interests in the Partnership at a price of $10.00 per Series A preferred unit. The Series A preferred units have the preferences, rights and obligations set forth in the Amended and Restated Partnership Agreement. Weston and Royal paid cash of $11.0 million and $2.0 million, respectively, to the Partnership and Weston assigned to the Partnership a $2.0 million note receivable from Royal originally dated September 30, 2016 (the “Weston Promissory Note”).

The Preferred Unit Agreement contains customary representations, warrants and covenants, which include among other things, that, for as long as the Series A preferred units are outstanding, the Partnership will cause CAM Mining, LLC (“CAM Mining”), which comprises the Partnership’s Central Appalachia segment, to conduct its business in the ordinary course consistent with past practice and use reasonable best efforts to maintain and preserve intact its current organization, business and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with CAM Mining.

The Preferred Unit Agreement stipulates that upon the request of the holder of the majority of the Partnership’s credit facility failcommon units following their conversion from Series A preferred units, as outlined in the Amended and Restated Partnership Agreement (defined below), the Partnership will enter into a registration rights agreement with such holder. Such majority holder has the right to approvedemand two shelf registration statements and registration statements on Form S-1, as well as piggyback registration rights.

Letter Agreement Regarding Rhino Promissory Note and Weston Promissory Note

On December 30, 2016, the transactionsPartnership and transaction documents contemplatedRoyal entered into a letter agreement whereby they extended the maturity dates of the Weston Promissory Note and the final installment payment of the Rhino Promissory Note to December 31, 2018. The letter agreement further provides that the aggregate $4.0 million balance of the Weston Promissory Note and Rhino Promissory Note may be converted at Royal’s option into a number of shares of Royal’s common stock equal to the outstanding balance multiplied by seventy-five percent (75%) of the volume-weighted average closing price of Royal’s common stock for the 90 days preceding the date of conversion (“Royal VWAP”), subject to a minimum Royal VWAP of $3.50 and a maximum Royal VWAP of $7.50.

Fourth Amended and Restated Agreement of Limited Partnership of Rhino Resource Partners LP

On December 30, 2016, the general partner entered into the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (“Amended and Restated Partnership Agreement”) to create, authorize and issue the Series A preferred units.

The Series A preferred units are a new class of equity security that rank senior to all classes or series of equity securities of the Partnership with respect to distribution rights and rights upon liquidation. The holders of the Series A preferred units shall be entitled to receive annual distributions equal to the greater of (i) 50% of the CAM Mining free cash flow (as defined below) and (ii) an amount equal to the number of outstanding Series A preferred units multiplied by $0.80. “CAM Mining free cash flow” is defined in the Amended and Restated Partnership Agreement as (i) the total revenue of the Partnership’s Central Appalachia business segment, minus (ii) the cost of operations (exclusive of depreciation, depletion and amortization) for the Partnership’s Central Appalachia business segment, minus (iii) an amount equal to $6.50, multiplied by the Agreement.aggregate number of coal tons sold by the Partnership from its Central Appalachia business segment. If the Partnership fails to pay any or all of the distributions in respect of the Series A preferred units, such deficiency will accrue until paid in full and the Partnership will not be permitted to pay any distributions on its partnership interests that rank junior to the Series A preferred units, including its common units. The parties anticipate the AgreementSeries A preferred units will be consummatedliquidated in accordance with their capital accounts and upon liquidation will be entitled to distributions of property and cash in accordance with the balances of their capital accounts prior to such distributions to equity securities that rank junior to the Series A preferred units.

The Series A preferred units will vote on an as-converted basis with the common units, and the Partnership will be restricted from taking certain actions without the consent of the holders of a majority of the Series A preferred units, including: (i) the issuance of additional Series A preferred units, or securities that rank senior or equal to the Series A preferred units; (ii) the sale or transfer of CAM Mining or a material portion of its assets; (iii) the repurchase of common units, or the issuance of rights or warrants to holders of common units entitling them to purchase common units at less than fair market value; (iv) consummation of a spin off; (v) the incurrence, assumption or guaranty of indebtedness for borrowed money in excess of $50.0 million except indebtedness relating to entities or assets that are acquired by the Partnership or its affiliates that is in existence at the time of such acquisition or (vi) the modification of CAM Mining’s accounting principles or the financial or operational reporting principles of the Partnership’s Central Appalachia business segment, subject to certain exceptions.

The Partnership will have the option to convert the outstanding Series A preferred units at any time on or beforeafter the time at which the amount of aggregate distributions paid in respect of each Series A preferred unit exceeds $10.00 per unit. Each Series A preferred unit will convert into a number of common units equal to the quotient (the “Series A Conversion Ratio”) of (i) the sum of $10.00 and any unpaid distributions in respect of such Series A Preferred Unit divided by (ii) 75% of the volume-weighted average closing price of the common units for the preceding 90 trading days (the “VWAP”); provided however, that the VWAP will be capped at a minimum of $2.00 and a maximum of $10.00. On December 31, 2016.2021, all outstanding Series A preferred units will convert into common units at the then applicable Series A Conversion Ratio.

Delisting of Common Units from NYSE

On April 18, 2016, the Partnership completed a 1-for-10 reverse split on its common units and subordinated units. Pursuant to the reverse split, common unitholders received one common unit for every 10 common units owned on April 18, 2016 and subordinated unitholders received one subordinated unit for every 10 subordinated units owned on April 18, 2016. Any fractional units resulting from the reverse unit split were rounded to the nearest whole unit. The reverse unit split was intended to increase the market price per unit of Rhino’s common units in order to comply withDecember 17, 2015, the New York Stock Exchange’sExchange (“NYSE”) continued listing standards.

As previously reported, on December 17, 2015,notified the Partnership was notified by the NYSE that the NYSE had determined to commence proceedings to delist its common units from the NYSE as a result of the Partnership’s failure to comply with the continued listing standard set forth in Section 802.01B of the NYSE Listed Company Manual to maintain an average global market capitalization over a consecutive 30 trading-day period of at least $15 million.million for our common units. The NYSE also suspended the trading of the Partnership’s common units at the close of trading on December 17, 2015.

On January 4, 2016, the Partnership filed an appeal with the NYSE to review the suspension and delisting determination of itsthe Partnership’s common units. The NYSE held a hearing regarding the Partnership’sour appeal on April 20, 2016 and affirmed its prior decision to delist the Partnership’s common units.

On April 27, 2016, the NYSE filed with the SEC a notification of removal from listing and registration on Form 25 to delist the Partnership’s common units and terminate the registration of the Partnership’sits common units under Section 12(b) of the Securities Exchange Act of 1934. The delisting became effective on May 9, 2016. The Partnership’s common units trade on the OTCQB Marketplace under the ticker symbol “RHNO.”

The Partnership is exploring the possibility of listing its common units on the NASDAQ Stock Market (“NASDAQ”), pending its capability to meet the NASDAQ initial listing standards.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL

Investments in Unconsolidated Affiliates. Investments in other entities are accounted for using the consolidation, equity method or cost basis depending upon the level of ownership, the Partnership’s ability to exercise significant influence over the operating and financial policies of the investee and whether the Partnership is determined to be the primary beneficiary of a variable interest entity. Equity investments are recorded at original cost and adjusted periodically to recognize the Partnership’s proportionate share of the investees’ net income or losses after the date of investment. Any losses from the Partnership’s equity method investments are absorbed by the Partnership based upon its proportionate ownership percentage. If losses are incurred that exceed the Partnership’s investment in the equity method entity, then the Partnership must continue to record its proportionate share of losses in excess of its investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

In May 2008, the Operating Company entered into a joint venture, Rhino Eastern LLC (“Rhino Eastern”), with an affiliate of Patriot Coal Corporation (“Patriot”) to acquire the Eagle mining complex located in Central Appalachia. The Partnership accounted for the investment in the joint venture and its results of operations under the equity method. In January 2015, the Partnership completed a Membership Transfer Agreement (the “Transfer Agreement”) with an affiliate of Patriot that terminated the Rhino Eastern joint venture. Pursuant to the Transfer Agreement, Patriot sold and assigned its 49% membership interest in the Rhino Eastern joint venture to the Partnership and, in consideration of this transfer, Patriot received certain fixed assets, leased equipment and coal reserves associated with the mining area previously operated by the Rhino Eastern joint venture. Patriot also assumed substantially all of the active workforce related to the Eagle mining area that was previously employed by the Rhino Eastern joint venture. The Partnership retained approximately 34 million tons of coal reserves that are not related to the Eagle mining area as well as a prepaid advanced royalty balance. As part of the closing of the Transfer Agreement, the Partnership and Patriot agreed to a dissolution payment based upon a final working capital adjustment calculation as defined in the Transfer Agreement. Refer to Note 16 for information on the financial statement impact of the Rhino Eastern dissolution completed in January 2015.

In December 2012, the Partnership made an initial investment of approximately $2.0 million in a new joint venture, Muskie Proppant LLC (“Muskie”), with affiliates of Wexford Capital. Muskie was formed to provide sand for fracking operations to drillers in the Utica Shale region and other oil and natural gas basins in the United States. The Partnership accounted for the investment in the joint venture and results of operations under the equity method. In November 2014, the Partnership contributed its interest in Muskie to Mammoth Energy Partners LP (“Mammoth”), which is discussed below.

In November 2014, the Partnership contributed its investment interest in Muskie to Mammoth Energy Partners LP (“Mammoth”) in return for a limited partner interest in Mammoth. Mammoth was formed to own various companies that provide services to companies, which engage in the exploration and development of North American onshore unconventional oil and natural gas reserves. Mammoth’s companies provide services that include completion and production services, contract land and directional drilling services and remote accommodation services. The non-cash transaction was a contribution of the Partnership’s investment interest in the Muskie entity for an investment interest in Mammoth. Thus, the Partnership determined that the non-cash exchange of the Partnership’s ownership interest in Muskie did not result in any gain or loss. As of September 30, 2016 and 2015, the Partnership has recorded its investment in Mammoth of $1.9 million as a long-term asset, which the Partnership records as a cost method investment based upon its ownership percentage. In October 2016, the Partnership contributed its limited partner interests in Mammoth to Mammoth Energy Services, Inc. (NASDAQ: TUSK) (“Mammoth Inc.”) in exchange for 234,300 shares of common stock of Mammoth, Energy Services, Inc. See Subsequent Events Note 18 for further details. The Partnership has included its investment in Mammoth and its prior investment in Muskie in its Other category for segment reporting purposes.

In September 2014, the Partnership made an initial investment of $5.0 million in a new joint venture, Sturgeon Acquisitions LLC (“Sturgeon”), with affiliates of Wexford Capital and Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport”), a publicly traded company. Sturgeon subsequently acquired 100% of the outstanding equity interests of certain limited liability companies located in Wisconsin that provide frac sand for oil and natural gas drillers in the United States.. The Partnership accounts for the investment in thethis joint venture and results of operations under the equity method.method based upon its ownership percentage. The Partnership recorded its proportionate share of the operating income for this investment for the three and six months ended June 30, 2017 of approximately $40,000 and $36,000, respectively. The Partnership recorded its proportionate share of the operating (loss) for Sturgeon for the three and ninesix months ended SeptemberJune 30, 2016 of approximately ($27,000)26,000) and ($0.1) million, respectively. TheIn June 2017, the Partnership contributed its limited partner interests in Sturgeon to Mammoth Inc. in exchange for 336,447 shares of common stock of Mammoth Inc. As of June 30, 2017, the Partnership owned 568,794 shares of Mammoth Inc.

As of June 30, 2017 and December 31, 2016, the Partnership recorded a fair market value adjustment of $2.0 million and $1.6 million, respectively, for its proportionate shareavailable-for-sale investment in Mammoth Inc. based on the market value of the operating income for Sturgeon forshares at June 30, 2017 and December 31, 2016, respectively, which was recorded in Other Comprehensive Income. As of June 30, 2017 and December 31, 2016, the three and nine months ended September 30, 2015 of approximately $0.1 million and $0.3 million, respectively.Partnership has recorded its investment in Mammoth Inc. as a short-term asset, which the Partnership has classified as available-for-sale. The Partnership has included the operating activities ofits investment in Mammoth Inc. and its prior investment in Muskie and Sturgeon in its Other category for segment reporting purposes.

Recently Issued Accounting Standards.In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 clarifies the principles for recognizing revenue and establishes a common revenue standard for U.S. financial reporting purposes. The guidance in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605,Revenue Recognition, and most industry-specific accounting guidance. Additionally, ASU 2014-09 supersedes some guidance included in ASC 605-35,Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (for example, assets within the scope of ASC 360,Property, Plant, and Equipment, and intangible assets within the scope of ASC 350,Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in ASU 2014-09. In July 2015, the FASB approved to defer the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 will be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. The Partnership is evaluating the requirements of this new accounting guidance.

In January 2015,February 2016, the FASB issued ASU 2015-01, “Income Statement-Extraordinary2016-02,Leases (Topic 842). ASU 2016-02 requires that lessees recognize all leases (other than leases with a term of twelve months or less) on the balance sheet as lease liabilities, based upon the present value of the lease payments, with corresponding right of use assets. ASU 2016-02 also makes targeted changes to other aspects of current guidance, including identifying a lease and Unusual Items”. ASC 225-20, Income Statement—Extraordinarylease classification criteria as well as the lessor accounting model, including guidance on separating components of a contract and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. ASU 2015-01 eliminatesconsideration in the concept of extraordinary items.contract. The amendments in ASU 2015-01 are2016-02 will be effective for fiscal years,the Partnership on January 1, 2019 and interim periods within those fiscal years,will require modified retrospective application as of the beginning after December 15, 2015. A reporting entity may applyof the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periodsearliest period presented in the financial statements. Early adoptionapplication is permitted provided that the guidancepermitted. The Partnership is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities. The adoption of ASU 2015-01 on January 1, 2016 did not have a material impact on the Partnership’s financial statements.currently evaluating this guidance.

In February 2015,August 2016, the FASB issued ASU 2015-02, “Consolidation”2016-15,Statement of Cash Flows (Topic 230):Classification of Certain Cash Receipts and Cash Payments. ASU 2015-02 affects reporting entities2016-15 provides guidance on eight cash flow issues, including debt prepayment or debt extinguishment costs. ASU 2016-15 requires that are requiredcash payments related to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation underdebt prepayments or debt extinguishments, excluding accrued interest, be classified as a financing activity rather than an operating activity even when the revised consolidation model. Specifically,effects enter into the amendmentsdetermination of ASU 2015-02: a) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, b) eliminate the presumption that a general partner should consolidate a limited partnership, c) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and d) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU 2015-02 is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If an entity early adopts thenet income. The amendments in an interim period, any adjustments shouldASU 2016-15 will be reflected as of the beginning of the fiscal year that includes that interim period. A reporting entity may apply the amendments in this Update using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A reporting entity also may apply the amendments retrospectively. The adoption of ASU 2015-02effective on January 1, 2016 did not have a material impact on the Partnership’s financial statements.2018 and must be applied retrospectively. Early application is permitted. The Partnership is currently evaluating this guidance.

In April 2015,January 2017, the FASB issued ASU 2015-03, “Interest—Imputation of Interest (Subtopic 835-30)-Simplifying the Presentation of Debt Issuance Costs”2017-01,Business Combinations (Topic 805). ASU 2015-03 requires that debt issuance costs related2017—01 clarifies the definition of a business with the objective of adding guidance to a recognized debt liabilityassist entities with evaluating whether transactions should be presented in the balance sheetaccounted for as a direct deduction from the carrying amountacquisitions (or disposals) of that debt liability, consistent with debt discounts. Prior toassets or businesses. ASU 2015-03, debt issuance costs have been presented in the balance sheet as a deferred charge, or asset. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. For public business entities, ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and2017, including interim periods within those fiscal years. Early adoption of ASU 2015-03The Partnership is permitted for financial statements that have not been previously issued. In addition, ASU 2015-03 requires entities to apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the newcurrently evaluating this guidance. The adoption of ASU 2015-03 on January 1, 2016 did not have a material impact on the Partnership’s financial statements.

3. DISCONTINUED OPERATIONS

Elk Horn Coal Leasing

In August 2016, the Partnership entered into an agreement to sell its Elk Horn coal leasing company (“Elk Horn”) to a third party for total cash consideration of $12.0 million. The Partnership received $10.5 million in cash consideration upon the closing of the Elk Horn transaction and the remaining $1.5 million of consideration will be paid in ten equal monthly installments of $150,000 on the 20^th20th of each calendar month beginning on September 20, 2016. Elk Horn is a coal leasing company located in eastern Kentucky that has provided the Partnership with coal royalty revenues from coal properties owned by Elk Horn and leased to third-party operators. As of December 31, 2015, Elk Horn controlled approximately 100 million tons of proven and probable steam coal reserves. During the second quarter of 2016, the Partnership evaluated the Elk Horn assets for potential impairment based upon the initial purchase price offered by the buyer and the continued deterioration of the Central Appalachia steam coal markets that had adversely affected Elk Horn’s financial results. The Partnership’s impairment analysis determined that a potential impairment existed since the carrying amount of the Elk Horn long-lived asset group exceeded the cash flows that would be generated from the purchase price offered from the buyer. Based on a market approach used to estimate the fair value of the Elk Horn long-lived asset group, the Partnership recorded total asset impairment charges of approximately $118.7 million related to Coal properties as of June 30, 2016. The disposal of the Elk Horn assets and liabilities in August 2016 resulted in an additionala loss of $0.5 million. The total loss of $119.2$119.9 million from the Elk Horn disposal is recorded onduring the Loss on business disposal line in the Partnership’s unaudited condensed consolidated statements of cash flows for the nine monthsyear ended September 30,December 31, 2016. The total loss on the Elk Horn disposal as well as the previous operating results of Elk Horn have been reclassified and reported on the (Loss)(Gain)/gainloss from discontinued operations line on the Partnership’s unaudited condensed consolidated statements of operations and comprehensive income for the three and ninesix months ended SeptemberJune 30, 2016 and 2015. The current and non-current assets and liabilities previously related to Elk Horn have been reclassified to the appropriate held for sale categories on the Partnership’s unaudited condensed consolidated statements of financial position for the year ended December 31, 2015.2016.

Utica Shale Oil and Natural Gas Assets

Beginning in 2011, the Partnership and an affiliate of Wexford Capital participated with Gulfport to acquire interests in a portfolio of oil and natural gas leases in the Utica Shale, which consisted of a 5% interest in a total of approximately 152,300 gross acres, or approximately 7,615 net acres. In March 2014, the Partnership completed a purchase and sale agreement with Gulfport to sell the Partnership’s oil and natural gas properties in the Utica Shale region. In addition, in January 2014, the Partnership received approximately $8.4 millionMajor components of net proceeds from the sale by Blackhawk Midstream LLC (“Blackhawk”) of its equity interest in two entities, Ohio Gathering Company, LLC and Ohio Condensate Company, LLC, to Summit Midstream Partners, LLC. As part of the joint operating agreement for the Utica Shale investment discussed above, the Partnership had the right to approximately 5% of the proceeds of the sale by Blackhawk. In February 2015, the Partnership received approximately $0.7 million in additional proceeds from the sale by Blackhawk that had been held in escrow. For the nine months ended September 30, 2015, the Partnership recorded the $0.7 million in Income(loss)/income from discontinued operations for the three and six months ended June 30, 2017 and 2016 are summarized as follows: