ALLIANCE HOLDINGS GP, L.P. Reports Strong Third Quarter 2006 Financial Results; and Declares Distribution of $0.215 Per Unit.

TULSA, Okla. -- Alliance Holdings GP, L.P. (NASDAQ: AHGP) (the "Partnership") today reported net income for the quarter ended September 30, 2006 (the "2006 Quarter") of $19.4 million, an increase of 17.7% over net income of $16.4 million for the quarter ended September 30, 2005 (the "2005 Quarter"). Basic and diluted net income per limited partner unit for the 2006 Quarter decreased to $0.32 per unit, compared to $0.35 per limited partner unit for the 2005 Quarter. This decrease in basic and diluted net income per limited partner unit 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 the Partnership's initial public offering.

The Partnership reported net income of $62.6 million, or $1.16 per limited partner unit, for the nine months ended September 30, 2006, as compared to $53.4 million, or $1.13 of basic and diluted net income per limited partner unit, for the nine months ended September 30, 2005.

The Board of Directors of the Partnership's general partner (the "Board") also declared a quarterly cash distribution for the 2006 Quarter of $0.215 per unit, or an annualized rate of $0.86 per unit. The declared distribution is based on the distributions the Partnership will receive from its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP). On October 25, 2006, the Board of Directors of the managing general partner of ARLP declared a quarterly cash distribution for the 2006 Quarter of $0.50 per unit, or $2.00 per unit on an annualized basis, which distribution will be paid on November 14, 2006 to all ARLP unitholders of record as of the close of trading on November 6, 2006. (See ARLP Press Release dated October 26, 2006.)

"Alliance Resource Partners again delivered positive results for the third quarter and continued to set a record pace through the first nine months of 2006," said Joseph W. Craft, III, President and Chief Executive Officer. "The strong cash flow generated by our underlying assets has allowed us to provide our unitholders with another attractive quarterly distribution."

The distribution for the 2006 Quarter will be paid on November 17, 2006, to the Partnership's unitholders of record as of the close of trading on November 9, 2006. Increases to the Partnership's quarterly cash distribution to unitholders are expected to be considered by the Board at its January and July meetings.

The Partnership reports its financial results on a consolidated basis with the financial results of ARLP. The difference in the Partnership's consolidated net income and that of ARLP is primarily attributable to non-controlling interest in consolidated ARLP net income resulting from the allocation of a significant portion of the Partnership's consolidated earnings to the limited partners of ARLP.

The Partnership currently has no other operating activities apart from those conducted by the operating subsidiaries of ARLP, and the Partnership's principal sources of cash flow are its ownership of general partner interests, limited partner interests and incentive distribution rights in ARLP. The Partnership's primary cash requirements are for general and administrative expenses, working capital requirements, and distributions to its unitholders. At September 30, 2006, the Partnership had $500,000 outstanding under its revolving credit facility.

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.

Alliance Holdings GP, L.P. is a limited partnership formed to own and control Alliance Resource Management GP, LLC, the managing general partner of Alliance Resource Partners, L.P., through which it holds a 1.98% general partner interest and the incentive distribution rights in Alliance Resource Partners, L.P. In addition, Alliance Holdings GP, L.P. owns 15,550,628 common units of Alliance Resource Partners, L.P.

Partnership news, unit prices and additional information about Alliance Holdings GP, L.P. including filings with the Securities and Exchange Commission, are available at http://www.ahgp.com. For more information, contact the investor relations department of Alliance Holdings GP, L.P. at 918-295-1415 or via e-mail at [e-mail].

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 Alliance Resource Partners, L.P. ("ARLP"); the risks to the business of ARLP include: fluctuation in coal prices, which could adversely affect ARLP's operating results and cash flows; if the direct or indirect benefit to ARLP from certain state and federal tax credits, including non-conventional source fuel tax credits is materially reduced, it could negatively impact ARLP's results of operations and reduce ARLP's cash available for distribution; from time to time, conditions in the coal industry may make it difficult for ARLP to extend existing or enter into new long-term contracts, which could materially adversely affect the stability and profitability of ARLP's operations.

Additional information concerning these and other factors can be found in the Partnership's public periodic filings with the Securities and Exchange Commission. Except as required by applicable securities laws, the Partnership does not intend to update its forward-looking statements.

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