Summary of WESTMORELAND COAL CO

Entry into a Material Definitive Agreement, Financial Statements and Exhibit

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On October 28, 2008, Westmoreland Resources, Inc. ("WRI"), a wholly-owned subsidiary of Westmoreland Coal Company (the "Parent Company"), entered into a 30-day extension of its revolving line of credit with First Interstate Bank, Billings, Montana ("FIB"). Borrowings during this extension period are limited to $10,000,000, a reduction from the $20,000,000 of borrowings available prior to the extension. The reduction in borrowing capacity was due to the withdrawal of a participant bank from the credit facility. All other terms of the borrowing remain the same during the extension period. Outstanding borrowings at October 28, 2008 were $6.2 million. During the extension period, WRI will be negotiating a renewal of the revolving line of credit with FIB and other potential lending sources, as well as seeking other potential sources of equity or debt financing. If the line of credit is renewed for $10 million, the Parent Company will be required to obtain additional capital from other sources to pay heritage and corporate obligations, and such capital may be required as soon as December 2008. If the line of credit is renewed at the $20 million level, the Parent Company will continue to seek additional sources of capital in order to improve its overall liquidity position. If the line of credit is not renewed, WRI will be required to repay the outstanding balance on the line at November 28, 2008, which will likely deplete the Parent Company's cash reserves.
The cash flows from the Parent Company's operating subsidiaries, Westmoreland Mining LLC, Westmoreland Partners (which operates the ROVA power plants), and WRI, provide sufficient liquidity for each of those subsidiaries to continue operations on a stand-alone basis. However, the Parent Company relies on dividends from those subsidiaries, most significantly from WRI, to meet its heritage and corporate obligations. As a result, the nonrenewal of the WRI revolving line of credit or a renewal at the $10 million level, could result in the Parent Company being unable to pay its heritage and corporate obligations as they come due.
Forward Looking Statements. Statements made in this Current Report on Form 8-K relating to the Company's future liquidity, capital resources and requirements and potential financing sources, and all other statements except statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the company's future performance are both subject to a wide range of business risks and uncertainties, including risks set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and other filings with the Securities and Exchange Commission.