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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30, 2010

or

For the transition period from              to             

Commission File Number: 1-16735

PENN VIRGINIA RESOURCE PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

FOUR RADNOR CORPORATE CENTER, SUITE 200

100 MATSONFORD ROAD

RADNOR, PA 19087

(Address of principal executive offices) (Zip Code)

(610) 687-8900

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

As of July 20, 2010, 52,293,381 common units representing limited partner interests were outstanding.

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PENN VIRGINIA RESOURCE PARTNERS, L.P.

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PART I. FINANCIAL INFORMATION

PENN VIRGINIA RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – unaudited

(in thousands, except per unit data)

The accompanying notes are an integral part of these Consolidated Financial Statements.

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PENN VIRGINIA RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS – unaudited

(in thousands)

The accompanying notes are an integral part of these Consolidated Financial Statements.

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PENN VIRGINIA RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS – unaudited

(in thousands)

The accompanying notes are an integral part of these Consolidated Financial Statements.

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PENN VIRGINIA RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – unaudited

June 30, 2010

Penn Virginia Resource Partners, L.P. (the “Partnership,” “we,” “us” or “our”) is a publicly traded Delaware limited partnership formed in 2001 that is principally engaged in the management of coal and natural resource properties and the gathering and processing of natural gas in the United States. We currently conduct operations in two business segments: (i) coal and natural resource management and (ii) natural gas midstream.

Our coal and natural resource management segment primarily involves the management and leasing of coal properties and the subsequent collection of royalties. Our coal reserves are primarily located in Kentucky, Virginia, West Virginia, Illinois and New Mexico. We also earn revenues from other land management activities, such as selling standing timber, leasing fee-based coal-related infrastructure facilities to certain lessees and end-user industrial plants, collecting oil and gas royalties and from coal transportation, or wheelage, fees.

Our natural gas midstream segment is engaged in providing natural gas processing, gathering and other related services. We own and operate natural gas midstream assets located in Oklahoma and Texas. Our natural gas midstream business derives revenues primarily from gas processing contracts with natural gas producers and from fees charged for gathering natural gas volumes and providing other related services. In addition, we own a 25% member interest in Thunder Creek Gas Services, LLC (“Thunder Creek”), a joint venture that gathers and transports coalbed methane in Wyoming’s Powder River Basin. We also own a 50% percent member interest in Crosspoint Pipeline LLC (“Crosspoint”), a joint venture that gathers and transports natural gas from our Crossroads gas processing plant to an interstate pipeline. We own a natural gas marketing business, which aggregates third-party volumes and sells those volumes into intrastate pipeline systems and at market hubs accessed by various interstate pipelines.

Our general partner is Penn Virginia Resource GP, LLC, which is a wholly owned subsidiary of Penn Virginia GP Holdings, L.P. (“PVG”), a publicly traded Delaware limited partnership. Effective June 7, 2010, Penn Virginia Corporation (“PVA”) completed its divestiture of PVG and as a result, PVA no longer owns any limited or general partner interests in us or PVG. At June 30, 2010, PVG owned an approximately 37% limited partner interest in us as well as 100% of our general partner, which owns a 2% general partner interest in us.

Our Consolidated Financial Statements include the accounts of the Partnership and all of our wholly owned subsidiaries. Investments in non-controlled entities over which we exercise significant influence are accounted for using the equity method. Intercompany balances and transactions have been eliminated in consolidation. Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These statements involve the use of estimates and judgments where appropriate. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our Consolidated Financial Statements have been included. Our Consolidated Financial Statements should be read in conjunction with our consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2009. Operating results for the three and six months ended June 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

Management has evaluated all activities of the Partnership through the date upon which our Consolidated Financial Statements were issued and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in these Notes.

Certain reclassifications have been made to conform to the current period’s presentation of taxes other than income. Historically, we reported taxes other than income as a separate component of expenses. We have reclassified the components of taxes other than income, which primarily related to property taxes and payroll taxes, to operating expense and general and administrative expense for all periods presented.

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All dollar amounts presented in the tables to these Notes are in thousands unless otherwise indicated.

We apply the authoritative accounting provisions for measuring fair value of both our financial and nonfinancial assets and liabilities. Fair value is an exit price representing the expected amount we would receive to sell an asset or pay to transfer a liability in an orderly transaction with market participants at the measurement date. We have followed consistent methods and assumptions to estimate the fair values as more fully described in our Annual Report on Form 10-K for the year ended December 31, 2009.

Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives and long-term debt. At June 30, 2010, the carrying values of all of these financial instruments, except the long-term debt with fixed interest rates, approximated fair value. The fair value of floating-rate debt approximates the carrying amount because the interest rates paid are based on short-term maturities. The fair value of our fixed-rate long-term debt is estimated based on the published market prices for the same or similar issues. As of June 30, 2010, the fair value of our fixed-rate debt was $294.0 million.

Recurring Fair Value Measurements

Certain assets and liabilities, including our derivatives, are measured at fair value on a recurring basis in our Consolidated Balance Sheet. The following tables summarize the valuation of our assets and liabilities for the periods presented:

We used the following methods and assumptions to estimate the fair values:

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Natural Gas Midstream Segment Commodity Derivatives

We determine the fair values of our derivative agreements using third-party quoted forward prices for the respective commodities as of the end of the reporting period and discount rates adjusted for the credit risk of our counterparties if the derivative is in an asset position and our own credit risk if the derivative is in a liability position. The following table sets forth our commodity derivative positions as of June 30, 2010:

Interest Rate Swaps

We have entered into the Interest Rate Swaps to establish fixed interest rates on a portion of the outstanding borrowings under the Revolver. The following table sets forth the positions of the Interest Rate Swaps for the periods presented:

During the first quarter of 2009, we discontinued hedge accounting for all of the Interest Rate Swaps. Accordingly, subsequent fair value gains and losses for the Interest Rate Swaps are recognized in the Derivatives caption on our Consolidated Statements of Income. As of June 30, 2010, a $0.3 million loss remained in

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accumulated other comprehensive income (“AOCI”) related to the Interest Rate Swaps. The $0.3 million loss will be recognized in interest expense when the original forecasted transactions occur.

We reported a (i) net derivative liability of $10.4 million at June 30, 2010 and (ii) loss in AOCI of $0.3 million as of June 30, 2010 related to the Interest Rate Swaps. In connection with periodic settlements, we reclassified a total of $1.1 million of net hedging losses on the Interest Rate Swaps from AOCI to interest expense during the six months ended June 30, 2010. See the “Financial Statement Impact of Derivatives” section below for the impact of the Interest Rate Swaps on our Consolidated Financial Statements.

Financial Statement Impact of Derivatives

The following table summarizes the effects of our derivative activities, as well as the location of the gains and losses, on our Consolidated Statements of Income for the periods presented:

The following table summarizes the fair value of our derivative instruments, as well as the locations of these instruments, on our Consolidated Balance Sheets for the periods presented:

See Note 3 for a description of how the above-described financial instruments are valued.

As of June 30, 2010, we did not own derivative instruments that were classified as fair value hedges or trading securities. In addition, as of June 30, 2010, we did not own derivative instruments containing credit risk contingencies.

In accordance with the equity method of accounting, we recognized earnings of $4.4 million and $2.6 million for the six months ended June 30, 2010 and 2009, with a corresponding increase in the investment. The joint ventures generally pay quarterly distributions on their cash flow. We received distributions of $6.7 million and $1.5 million for the six months ended June 30, 2010 and 2009. Equity earnings related to our 50% interest in Coal Handling Solutions LLC are included in coal services revenues, and

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equity earnings related to our 25% interest in Thunder Creek and our 50% interest in Crosspoint are recorded in other revenues on the Consolidated Statements of Income. The equity investments for all joint ventures are included in the equity investments caption on the Consolidated Balance Sheets.

Summarized financial information of unconsolidated equity investments is as follows for the periods presented:

Senior Notes

In April 2010, we sold $300.0 million of unsecured senior notes due on April 15, 2018 (the “Senior Notes”) with an annual interest rate of 8.25%, which is payable semi-annually in arrears on April 15 and October 15 of each year. The Senior Notes were sold at par, equating to an effective yield to maturity of approximately 8.25%. The net proceeds from the sale of the Senior Notes of approximately $292.6 million, after deducting underwriter fees and expenses of approximately $7.4 million, were used to repay borrowings under the Revolver. We may redeem some or all of the Senior Notes at any time on or after April 15, 2014 at the redemption prices set forth in the indenture governing the Senior Notes and prior to such date at a “make-whole” redemption price. We may also redeem up to 35% of the Senior Notes prior to April 15, 2013 with cash proceeds received from certain equity offerings. If we sell certain assets and do not reinvest the proceeds or repay senior indebtedness or if we experience a change of control, we must offer to repurchase the Senior Notes. The Senior Notes are senior to any subordinated indebtedness and are effectively subordinated to all of our secured indebtedness, including our indebtedness under the Revolver, to the extent of the collateral securing that indebtedness. The obligations under the Senior Notes are fully and unconditionally guaranteed by our current and future subsidiaries, which are also guarantors under the Revolver.

Revolver

Effective June 7, 2010, PVA completed its divestiture of PVG and as a result, PVA no longer owns any limited or general partner interests in us or PVG. Immediately prior to this divestiture, we amended the Revolver to amend the definition of “Change of Control” thereunder, with the effect that the sale by PVA of its remaining beneficial ownership of common units would not constitute a change of control of us. The amendment of the Revolver also amended the negative covenant restricting the incurrence of indebtedness, with the effect that we may issue an additional $300.0 million of unsecured senior or subordinated notes, in addition to the Senior Notes.

As of June 30, 2010, partners’ capital consisted of 52.3 million common units, representing a 98% limited partner interest, and a 2% general partner interest. As of June 30, 2010, PVG owned an approximate 39% interest in us, consisting of 19.6 million common units, representing an approximately 37% limited partner interest, and a 2% general partner interest.

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Net Income per Limited Partner Unit

Basic and diluted net income per limited partner unit is computed by dividing net income allocable to limited partners by the weighted average number of limited partner units outstanding during the period. Diluted net income per limited partner unit is computed by dividing net income allocable to limited partners by the weighted average number of limited partner units outstanding during the period and, when dilutive, phantom units. For the three and six months ended June 30, 2010, average awards of 137,000 and 187,000 phantom units were excluded from the diluted net income per limited partner unit calculation because the inclusion of these phantom units would have had an antidilutive effect. For the three and six months ended June 30, 2009, average awards of 88,000 and 75,000 were excluded.

The following table reconciles the computation of net income to net income allocable to limited partners:

Cash Distributions

We distribute 100% of Available Cash (as defined in our partnership agreement) within 45 days after the end of each quarter to unitholders of record and to our general partner. Available Cash is generally defined as all of our cash and cash equivalents on hand at the end of each quarter less reserves established by our general partner for future requirements. Our general partner has the discretion to establish cash reserves that are necessary or appropriate to (i) provide for the proper conduct of our business, (ii) comply with applicable law, any of our debt instruments or any other agreements and (iii) provide funds for distributions to unitholders and our general partner for any one or more of the next four quarters.

The following table reflects the allocation of total cash distributions paid by us during the periods presented:

On August 13, 2010, we will pay a $0.47 per unit quarterly distribution to unitholders of record on August 6, 2010. This per unit distribution remains unchanged from the previous distribution paid on May 14, 2010.

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In June 2010, PVA sold its remaining interest in PVG and as a result, PVA no longer owns any limited or general partner interests in us or PVG. As a result of the divestiture, the related party transactions noted below will now be considered arm’s-length and will no longer require separate disclosures. PVR and PVG executed a transition agreement with PVA covering the services of certain shared employees, aiding the transition of corporate and accounting functions that will continue until March 2011. The transition agreement with PVA was approved by the Conflicts Committee of both PVR and PVG. Related party transactions included charges from Penn Virginia for certain corporate administrative expenses which are allocable to us and our subsidiaries. Other transactions involved subsidiaries of PVA related to the marketing of natural gas, gathering and processing of natural gas, and the purchase and sale of natural gas and NGLs in which we took title to the products. The income statement and balance sheet amounts noted below represent related party transactions through June 7, 2010 (date of divestiture). Future periodic disclosure of amounts will be historical in nature.

The Penn Virginia Resource GP, LLC Fifth Amended and Restated Long-Term Incentive Plan (the “LTIP”) permits the grant of common units, deferred common units, restricted units and phantom units to employees and directors of our general partner and its affiliates. Common units and deferred common units granted under the LTIP are immediately vested, and we recognize compensation expense related to those grants on the grant date. Restricted units and phantom units granted under the LTIP generally vest over a three-year period, with one-third vesting in each year, and we recognize compensation expense related to those grants on a straight-line basis over the vesting period. These compensation expenses are recorded in the general and administrative expenses caption on our Consolidated Statements of Income. In 2010, we granted 230,319 phantom units at a weighted average grant-date fair value of $22.86.

Because PVA’s divestiture of PVG was considered a change of control under the LTIP, all unvested restricted and phantom units granted to employees performing services for the benefit of us were considered vested on the date of the divestiture. In total, 400,090 phantom units vested and an equal number of new common units were issued on that date. The restrictions on approximately 36,000 restricted units were also lifted. In connection with the normal three-year vesting and this accelerated vesting of phantom units, we recognized non-cash compensation expense of $5.0 million and $5.9 million for the three and six months ended June 30, 2010. In connection with the normal three-year vesting and this accelerated vesting of restricted units, we recognized compensation expense of $0.8 million and $1.2 million for the three and six months ended June 30, 2010. We also recognized a total of $0.1 million and $0.2 million compensation expense for the three and six months ended June 30, 2010 and 2009 related to the granting of deferred common units under our LTIP. Compensation expense of $1.3 million and $2.7 million was recognized for the three and six months ended June 30, 2009 related to the vesting of restricted, phantom and deferred common units under our LTIP.

Comprehensive income represents changes in partners’ capital during the reporting period, including net income and charges directly to partners’ capital which are excluded from net income. The following table sets forth the components of comprehensive income for the periods presented:

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Legal

We are involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, our management believes that these claims will not have a material effect on our financial position or results of operations.

Environmental Compliance

As of June 30, 2010 and December 31, 2009, our environmental liabilities were $0.9 million and $1.0 million, which represents our best estimate of the liabilities as of those dates related to our coal and natural resource management and natural gas midstream businesses. We have reclamation bonding requirements with respect to certain unleased and inactive properties. Given the uncertainty of when a reclamation area will meet regulatory standards, a change in this estimate could occur in the future.

Mine Health and Safety Laws

There are numerous mine health and safety laws and regulations applicable to the coal mining industry. However, since we do not operate any mines and do not employ any coal miners, we are not subject to such laws and regulations. Accordingly, we have not accrued any related liabilities.

Customer Credit Risk

For the six months ended June 30, 2010, two of our natural gas midstream segment customers accounted for $55.1 million and $41.0 million, or 14% and 10%, of our total consolidated revenues. At June 30, 2010, 21% of our consolidated accounts receivable related to these customers.

Our reportable segments are as follows:

The following tables present a summary of certain financial information relating to our segments for the periods presented:

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