The recent selloff in units of Penn Virginia Resource Partners LP (NYSE: PVR) appears overdone and represents an outstanding opportunity for investors to lock in an almost 9 percent yield on this high-quality master limited partnership (MLP).

Penn Virginia Resources operates a coal royalty business (60 percent of cash flow) and owns midstream assets in the Marcellus Shale (40 percent).

Investors have sold the stock out of concern about weak pricing in the US domestic market for thermal coal, the varietal used in power plants. Depressed natural gas prices have put pressure on the price of thermal coal because electric utilities with the flexibility to switch fuels have opted to burn natural gas. Weakness in coal and natural gas prices has been exacerbated by an unseasonably warm winter that depressed demand for heating and elevated inventories of both commodities.

Investors also reacted to news about regulations that would require new coal plants to meet higher emissions standards, an announcement that prompted a stream of predictable headlines about the death of coal.

US thermal coal prices will remain under pressure after the warm winter led to a build-up of inventories at electric utilities. Although the Environmental Protection Agency’s proposed regulations present a slight challenge for coal producers, the announcement hardly came as a surprise; we’ve been waiting for the agency to try to regulate coal use ever since the agency declared carbon dioxide a pollutant in early 2009.

Moreover, the EPA regulation would apply only to new coal-fired power plants, while facilities under construction or slated to be built won’t be subject to the new rules. Most electric utilities had scaled back plans to build coal-fired plants long before the EPA drafted its regulation. Also, any EPA regulations that are enacted could be reversed under a future administration.

Bottom line: EPA regulation of emissions from coal-fired plants isn’t good news for coal prices, but the announcement hardly came as a shock. In the near term, the rules will have little effect on coal demand because few utilities planned to build new plants that burn the commodity.

Penn Virginia Resource Partners also has little near-term exposure to coal prices thanks to long-term supply contracts with its customers. The MLP is also insulated from increased regulatory costs associated with mining coal because it simply collects royalties from operators. Management had already penciled in a tough year for its coal-related operations; the EPA’s announcement won’t worsen this outlook.

Meanwhile, cash flow from the MLP’s midstream business continues to grow, thanks to strong demand for gathering and processing capacity in Pennsylvania’s Marcellus Shale and the Granite Wash play in Texas and Oklahoma. Penn Virginia Resource Partners’ assets in the Marcellus Shale–the unconventional gas play with the lowest cost of production–are backed by long-term contracts with Range Resources Corp (NYSE: RRC), the field’s leading operator. Drilling activity in the Granite Wash, a play that’s rich in natural gas liquids, continues to accelerate.

With its midstream business poised for substantial growth, the MLP should be able to grow its distribution in coming years. Take advantage of the unwarranted selloff and buy Penn Virginia Resource Partners LP up to 29.