Alliance Holdings GP (AHGP) 8-K Reports Increased Third Quarter 2007 Financial Results; and Declares Quarterly Distribution of $0.265 per Unit

Exhibit 99.1

PRESS RELEASE

	CONTACT:
	Brian L. Cantrell
	Alliance Holdings GP, L.P.
	1717 South Boulder Avenue, Suite 400
	Tulsa, Oklahoma 74119
	(918) 295-7673

FOR IMMEDIATE RELEASE

ALLIANCE HOLDINGS GP, L.P.

Reports Increased Third Quarter 2007 Financial Results; and Declares Quarterly Distribution of $0.265 per Unit

TULSA, OKLAHOMA, October 29, 2007 – Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported net income for the quarter ended September 30, 2007 (the “2007 Quarter”) of $20.5 million, or $0.34 per basic and diluted limited partner unit, an increase of 6.0% compared to net income of $19.4 million, or $0.32 per basic and diluted limited partner unit, for the quarter ended September 30, 2006 (the “2006 Quarter”).

AHGP’s net income increased to $67.4 million for the nine months ended September 30, 2007 (the “2007 Period”), compared to $62.6 million for the nine months ended September 30, 2006 (the “2006 Period”). Basic and diluted net income per limited partner unit for the 2007 Period decreased to $1.13 per unit, compared to $1.16 per basic and diluted limited partner unit for the 2006 Period. This decrease in basic and diluted net income per limited partner unit for the 2007 Period is the result of an increase in the number of common units outstanding due to the issuance of 12,500,000 common units on May 9, 2006 in conjunction with AHGP’s initial public offering.

The Board of Directors of AHGP’s general partner (the “Board”) also declared a quarterly cash distribution for the 2007 Quarter of $0.265 per unit (an annualized rate of $1.06 per unit), payable on November 19, 2007, to AHGP’s unitholders of record as of November 12, 2007. Increases to AHGP’s quarterly cash distribution to unitholders are expected to be considered by the Board at its January and July meetings.

The declared distribution is based on the distribution AHGP will receive from its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP). On October 29, 2007, ARLP announced a quarterly distribution for the 2007 Quarter of $0.56 per unit, or $2.24 per unit on an annualized basis, which will be paid on November 14, 2007 to all ARLP unitholders of record as of the close of trading on November 7, 2007. (See ARLP Press Release dated October 29, 2007.)

AHGP currently has no other operating activities apart from those conducted by the operating subsidiaries of ARLP and reports its financial results on a consolidated basis with the financial results of ARLP. AHGP’s principal sources of cash flow are its ownership of general partner interests, limited partner interests and incentive distribution rights in ARLP. Based on ARLP’s current declared distribution, AHGP expects to receive quarterly cash distributions from ARLP of $16.7 million, or $66.7 million, on an annualized basis. AHGP’s primary cash requirements are for general and administrative expenses, including for 2007 an estimated $2.4 million in incremental general and administrative expenses associated with being a publicly traded limited partnership, working capital requirements and distributions to its unitholders. At September 30, 2007, AHGP had no borrowings outstanding under its revolving credit facility.

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A conference call regarding AHGP’s 2007 Quarter financial results is scheduled for today at 10:00 a.m. Eastern. To participate, dial (866) 825-3308 and provide pass code 11584750. International callers should dial (617) 213-8062. Investors may also listen to the call via the “investor information” section of AHGP’s website at http://www.ahgp.com.”

About Alliance Holdings GP, L.P.

AHGP is a limited partnership formed to own and control Alliance Resource Management GP, LLC, the managing general partner of ARLP, through which it holds a 1.98% general partner interest and the incentive distribution rights in ARLP. In addition, AHGP owns 15,544,169 common units of ARLP.

News, unit prices and additional information about AHGP including filings with the Securities and Exchange Commission, are available at http://www.ahgp.com. For more information, contact the investor relations department of AHGP at 918-295-1415 or via e-mail atinvestorrelations@ahgp.com

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The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions or other business combinations that may occur after the date of this release. At the end of this release, we have included more information regarding business risks that could affect our results.

FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. These risks, uncertainties and contingencies include, but are not limited to, the following: initially, our operating cash flow will be derived exclusively from cash distributions from ARLP; the risks to the business of ARLP include: increased competition in coal markets and ARLP’s ability to respond to the competition; fluctuation in coal prices, which could adversely affect ARLP’s operating results and cash flows; risks associated with the expansion of ARLP’s operations and properties; deregulation of the electric utility industry or the effects of any adverse change in the domestic coal industry, electric utility industry, or general economic conditions; dependence on significant customer contracts, including renewing customer contracts upon expiration of existing contracts; customer bankruptcies and/or cancellations or breaches of existing contracts; customer delays or defaults in making payments; fluctuations in coal demand, prices and availability due to labor and transportation costs and disruptions, equipment availability, governmental regulations and other factors; ARLP’s productivity levels and margins that it earns on its coal sales; greater than expected increases in raw material costs; greater than expected shortage of skilled labor; any unanticipated increases in labor costs, adverse changes in work rules, or unexpected cash payments associated with asset retirement obligations and workers’ compensation claims; any unanticipated increases in transportation costs and risk of transportation delays or interruptions; greater than expected environmental regulation, costs and liabilities; a variety of operational, geologic, permitting, labor and weather-related factors; risk associated with major mine-related accidents, such as mine fires or other interruptions; results of litigation, including claims not yet asserted; difficulty maintaining ARLP’s surety bonds for asset retirement obligations as well as workers’ compensation and black lung benefits; coal market’s share of electricity generation; prices of fuel that compete with or impact coal usage, such as oil or natural gas; legislation, regulatory and court decisions; the impact from provisions of The Energy Policy Act of 2005; replacement of coal reserves; a loss or reduction of the direct or indirect benefit from certain state and federal tax credits, including non-conventional source fuel tax credits; difficulty obtaining commercial property insurance, and risks associated with ARLP’s increased participation (excluding any applicable deductible) in the commercial insurance property program.

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Additional information concerning these and other factors can be found in AHGP’s public periodic filings with the Securities and Exchange Commission (“SEC”), including AHGP’s Annual Report on Form 10-K for the year ended December 31, 2006, filed on March 15, 2007 with the SEC. Except as required by applicable securities laws, AHGP does not intend to update its forward-looking statements.

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ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA

(In thousands, except unit and per unit data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
SALES AND OPERATING REVENUES:
Coal sales	$	242,412		$	228,802		$	723,646		$	652,527
Transportation revenues		9,138			10,966			28,423			29,956
Other sales and operating revenues		8,875			4,847			28,591			21,691
Total revenues		260,425			244,615			780,660			704,174
EXPENSES:
Operating expenses		176,857			162,209			521,814			455,096
Transportation expenses		9,138			10,966			28,423			29,956
Outside purchases		3,737			6,020			17,610			14,251
General and administrative		7,716			7,859			25,063			22,350
Depreciation, depletion and amortization		21,804			17,276			63,022			48,291
Net gain from insurance settlement		—			—			(11,491	)		—
Total operating expenses		219,252			204,330			644,441			569,944
INCOME FROM OPERATIONS		41,173			40,285			136,219			134,230
Interest expense		(3,039	)		(2,883	)		(8,702	)		(9,475	)
Interest income		280			716			1,395			2,532
Other income		121			216			1,189			678
INCOME BEFORE INCOME TAXES, CUMULATIVE EFFECT OF ACCOUNTING CHANGE, MINORITY INTEREST AND NON-CONTROLLING INTEREST		38,535			38,334			130,101			127,965
INCOME TAX EXPENSE		550			352			1,794			2,228
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE, MINORITY INTEREST AND NON-CONTROLLING INTEREST		37,985			37,982			128,307			125,737
CUMULATIVE EFFECT OF ACCOUNTING CHANGE		—			—			—			112
MINORITY INTEREST		63			53			230			96
INCOME BEFORE NON-CONTROLLING INTEREST		38,048			38,035			128,537			125,945
Affiliate non-controlling interest in consolidated partnership’s net income		(7	)		(7	)		(22	)		(23	)
Non-affiliate non-controlling interest in consolidated partnership’s net income		(17,534	)		(18,677	)		(61,116	)		(63,300	)
NET INCOME	$	20,507		$	19,351		$	67,399		$	62,622
BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT	$	0.34		$	0.32		$	1.13		$	1.16
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT	$	0.265		$	0.12285		$	0.765		$	0.12285
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING-BASIC AND DILUTED		59,863,000			59,863,000			59,863,000			53,956,407

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ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

	September 30, 2007			December 31, 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	19,523		$	37,069
Trade receivables, net		89,300			96,558
Other receivables		2,256			3,378
Due from affiliates		—			25
Marketable securities		—			260
Inventories		24,998			20,224
Advance royalties		3,316			4,629
Prepaid expenses and other assets		1,276			8,419
Total current assets		140,669			170,562
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost		922,159			819,991
Less accumulated depreciation, depletion and amortization		(406,954	)		(383,284	)
Total property, plant and equipment, net		515,205			436,707
OTHER ASSETS:
Advance royalties		27,308			22,135
Other long-term assets		14,753			6,091
Total other assets		42,061			28,226
TOTAL ASSETS	$	697,935		$	635,495
LIABILITIES AND PARTNERS’ CAPITAL
CURRENT LIABILITIES:
Accounts payable	$	55,406		$	58,513
Due to affiliates		1,064			1,289
Accrued taxes other than income taxes		12,935			14,618
Accrued payroll and related expenses		17,405			14,698
Accrued interest		1,162			4,264
Workers’ compensation and pneumoconiosis benefits		7,715			7,704
Current capital lease obligation		375			339
Other current liabilities		9,774			13,964
Current maturities, long-term debt		18,000			18,000
Total current liabilities		123,836			133,389
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities		135,000			126,000
Pneumoconiosis benefits		28,691			26,315
Accrued pension benefit		4,053			6,191
Workers’ compensation		51,752			38,488
Asset retirement obligations		49,110			47,825
Long-term capital lease obligation		1,232			1,512
Minority interest		609			839
Other liabilities		7,276			6,610
Total long-term liabilities		277,723			253,780
Total liabilities		401,559			387,169
NON-CONTROLLING INTEREST IN CONSOLIDATED PARTNERSHIP:
Affiliate		(303,816	)		(303,823	)
Non-Affiliates		351,029			324,784
Total non-controlling interest		47,213			20,961
COMMITMENTS AND CONTINGENCIES
PARTNERS’ CAPITAL:
Limited Partners – Common Unitholders 59,863,000 units outstanding		255,925			234,321
Accumulated other comprehensive income		(6,762	)		(6,956	)
Total Partners’ Capital		249,163			227,365
TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	697,935		$	635,495

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ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2007			2006
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	209,422		$	183,158
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures		(95,017	)		(141,963	)
Changes in accounts payable and accrued liabilities		(9,297	)		(1,198	)
Proceeds from sale of property, plant and equipment		5,859			599
Proceeds from insurance settlement for replacement assets		2,511			—
Purchase of marketable securities		—			(19,188	)
Proceeds from marketable securities		260			68,343
Payment for acquisition of business		—			(2,318	)
Payment for acquisition of coal reserves and other assets		(53,309	)		—
Advances on Gibson rail project		(5,912	)		—
Net cash used in investing activities		(154,905	)		(95,725	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long-term debt		(18,000	)		(18,000	)
Borrowings under revolving credit facilities		130,525			500
Payments under revolving credit facilities		(103,525	)		—
Payments on capital lease obligation		(244	)		—
Payment of debt issuance cost		(194	)		(690	)
Equity contribution received by Mid-America Carbonates, LLC		—			1,000
Contributions to consolidated partnership from affiliate non-controlling interest		1			—
Distributions paid by consolidated partnership to affiliate non-controlling interest		(16	)		(13	)
Distributions paid by consolidated partnership to non-affiliate non-controlling interest		(34,815	)		(30,201	)
Distributions paid to Partners		(45,795	)		(326,439	)
Net proceeds from issuance of common units in initial public offering		—			291,300
Net cash used in financing activities		(72,063	)		(82,543	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(17,546	)		4,890
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		37,069			32,072
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	19,523		$	36,962
SUPPLEMENTAL CASH FLOW INFORMATION:
CASH PAID FOR:
Interest	$	12,587		$	13,715
Income taxes	$	2,175		$	2,545
NON-CASH INVESTING ACTIVITY:
Purchase of property, plant and equipment	$	2,843		$	8,166

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