Chesapeake Granite Wash Trust Announces Distribution of $0.5079 Per Common Unit
November 06 2014 - 7:00AM
Business Wire
Chesapeake Granite Wash Trust (NYSE:CHKR) (the “Trust”) today
announced that its common unit distribution for the quarter ended
September 30, 2014 (which primarily relates to production
attributable to the Trust’s royalty interests from June 1, 2014
through August 31, 2014) will be $0.5079 per common unit. The
distribution will be paid on December 1, 2014 to all common
unitholders of record at the close of business on November 19,
2014.
During the three-month production period ended August 31, 2014,
sales volumes and realized natural gas and natural gas liquids
prices were both lower than initial Trust estimates. This resulted
in quarterly income available for distribution of $0.3809 per unit,
which is $0.3091 below the applicable subordination threshold of
$0.6900. For this distribution, all of the quarterly income
available for distribution will be used to make a distribution per
common unit of $0.5079 and the Trust will not pay a subordinated
unit distribution for the quarter.
The following table provides sales volumes, realized prices
received and revenue attributable to the Trust’s royalty interests,
expenses of the Trust and distributable income available to
unitholders for the production period from June 1, 2014 through
August 31, 2014.
Sales volumes: Oil (mbbl) 88 Natural gas
liquids (mbbl) 232 Natural gas (mmcf) 2,034 Total oil equivalent
volumes (mboe) 659 Average price received per production
unit:(1) Oil $97.60 Natural gas liquids $29.65 Natural gas $2.59
Distributable income calculation (in thousands except per
unit income): Revenue less production taxes(1) $20,308 Derivative
settlement loss (2,323) Trust expenses (177) Distributable
income available to unitholders $17,808 Calculated
distributable income per unit(2) $0.3809
Distributable income per common unit $0.5079 Distributable income
per subordinated unit(3) $ --
(1)
Includes the effect of certain marketing,
gathering and transportation deductions.
(2)
Based on 46,750,000 units issued and
outstanding, consisting of 35,062,500 common units and 11,687,500
subordinated units.
(3)
All subordinated shares are owned by
Chesapeake Energy Corporation. As the distribution per common unit
is below the applicable subordination threshold, no distribution
will be paid for the subordinated units.
Due to the timing of the payment of production proceeds to the
Trust, quarterly distributions generally include royalties
attributable to sales of oil, natural gas liquids and natural gas
for three months, including the first two months of the quarter
just ended and the last month of the prior quarter.
The Trust was formed by Chesapeake Energy Corporation (NYSE:CHK)
("Chesapeake") in June 2011 and owns royalty interests in certain
oil and natural gas properties in the Colony Granite Wash play in
Washita County, Oklahoma. The Trust is entitled to receive proceeds
from the sale of production attributable to the royalty interests.
As described in the Trust’s filings with the Securities and
Exchange Commission (the “SEC”), the amount of Trust revenues and
the quarterly distributions to Trust unitholders will fluctuate
from quarter to quarter, depending on the timing of initial sales
from the development wells drilled by Chesapeake in which the Trust
receives an interest, the sales volume of oil, natural gas liquids
and natural gas attributable to the Trust’s royalty interests and
the prices received for such sales, amounts realized and paid under
the Trust’s hedging arrangements and the amount of the Trust's
administrative expenses, among other factors.
For additional information regarding the Trust and its results
of operations and financial condition, please refer to the Trust’s
SEC filings.
ABOUT CHESAPEAKE GRANITE WASH TRUST:
Chesapeake Granite Wash Trust (NYSE: CHKR) is a Delaware
statutory trust formed by Chesapeake Energy Corporation to own
certain royalty interests in oil, natural gas liquids and natural
gas wells in Washita County, Oklahoma producing from the Colony
Granite Wash play within the broader Granite Wash formation of the
Anadarko Basin. The common units do not represent interests in and
are not obligations of Chesapeake Energy Corporation. The common
units are listed on the New York Stock Exchange under the symbol
CHKR. Further information is available at
www.chkgranitewashtrust.com where Chesapeake Granite Wash
Trust routinely posts announcements, updates, investor information
and news releases.
Pursuant to IRC Section 1446, withholding tax on income
effectively connected to a U.S. trade or business allocated to
foreign partners should be made at the highest marginal rate.
Under Section 1441, withholding tax on fixed, determinable,
annual, periodic income from U.S. sources allocated to foreign
partners should be made at 30% of gross income unless the rate is
reduced by treaty. This release is intended to be a
qualified notice to nominees and brokers as provided for under
Treasury Regulation Section 1.1446-4(b) by Chesapeake Granite Wash
Trust, and while specific relief is not specified for Section 1441
income, this disclosure is intended to suffice. For
distributions made to foreign partners, nominees and brokers should
withhold at the highest effective tax rate.
This news release contains statements that are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements
contained in this news release, other than statements of historical
facts, are "forward-looking statements" for purposes of these
provisions. Although Chesapeake has advised the Trust that
Chesapeake believes that the expectations contained in this press
release are reasonable, no assurances can be given that such
expectations will prove to be correct. The anticipated distribution
discussed herein is based, in part, on the amount of cash received
or expected to be received by the Trust from Chesapeake with
respect to the relevant quarterly period. Any differences in actual
cash receipts by the Trust could affect this distributable amount.
Other important factors that could cause actual results to differ
materially include expenses of the Trust and reserves for
anticipated future expenses. Neither Chesapeake nor the Trustee
intends, and neither assumes any obligation, to update any of the
statements included in this news release. An investment in common
units issued by Chesapeake Granite Wash Trust is subject to the
risks described in the Trust's Annual Report on Form 10-K for the
year ended December 31, 2013, as well as other risks identified in
the Trust’s Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K filed with the SEC. The Trust's annual, quarterly and
other filed reports are or will be available at the SEC's website
at www.sec.gov. The Trust does not intend, and
assumes no obligations, to update any of the statements included in
this news release.
Bank of New York Mellon Trust Company, N.A.Sarah Newell,
855-802-1093sarah.newell@bnymellon.com
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