Pacific Coast Oil Trust Announces There Will Be No December Cash Distribution
November 22 2016 - 4:15PM
Business Wire
PACIFIC COAST OIL TRUST (NYSE: ROYT) (the “Trust”) a perpetual
royalty trust formed by Pacific Coast Energy Company LP (“PCEC”),
announced today that there will be no cash distribution to the
holders of its units of beneficial interest of record on December
14, 2016. The Trust’s distribution calculation relates to net
profits and overriding royalties generated during October 2016 as
provided in the conveyance of net profits and overriding royalty
interest.
The current month’s calculation for the Developed Properties
resulted in $425,000 of revenues less direct operating expenses and
development costs. The current month’s revenues were $3.1 million,
lease operating expenses including property taxes were $2.4
million, and capital expenditures were $325,000. Average realized
prices for the Developed Properties were $46.46 per Boe in October,
as compared to $42.00 per Boe in September. The cumulative net
profits deficit of $257,000 for the Developed Properties in the
month of September was reduced to zero during the month of October
and resulted in net profits of $83,000 from the Developed
Properties.
The current month’s calculations included $51,000 for the 7.5%
overriding royalty on the Remaining Properties from Orcutt
Diatomite and Orcutt Field. Average realized prices for the
Remaining Properties were $41.91 per Boe in October, as compared to
$37.62 per Boe in September. The cumulative net profits deficit for
the Remaining Properties, including the 7.5% overriding royalty
payments, decreased $29,000 and remains at $2.1 million.
The current month’s cash flow before repayment of a portion of
amounts borrowed from PCEC under the promissory note entered into
in February 2016 was $46,000, reflecting $83,000 in income from the
Developed Properties and $51,000 in income from the 7.5% overriding
royalty on the Remaining Properties partially offset by $88,000 for
the monthly operating and services fee payable to PCEC. The current
month’s cash flow will pay down amounts previously borrowed from
PCEC and is expected to reduce the cumulative borrowings from PCEC,
including interest, to $1,132,450 in December 2016.
PCEC has agreed to loan funds to the Trust necessary to pay
expenses at an interest rate of 8.5% per annum from February 25,
2016 to August 9, 2016 and 4% per annum from August 10, 2016 until
maturity (March 31, 2018). PCEC previously provided the Trust with
a $1 million letter of credit to be used by the Trust if its cash
on hand (including available cash reserves) is not sufficient to
pay ordinary course administrative expenses as they become due. Any
funds provided under the letter of credit or loaned by PCEC may
only be used for the payment of current accounts or other
obligations to trade creditors in connection with obtaining goods
or services or for the payment of other accrued current liabilities
arising in the ordinary course of the Trust’s business. No
distribution will be made to Trust unitholders until the
indebtedness borrowed, including interest thereon, has been paid in
full.
Sales Volumes and Prices
The following table displays PCEC’s underlying sales volumes and
average prices for the month of October 2016:
Underlying Properties Sales Volumes Average Price (Boe) (per
Boe) Developed Properties (a) 66,986 $ 46.46 Remaining Properties
(b) 21,334 $ 41.91 (a) Crude oil sales represented 100% of
sales volumes (b) Crude oil sales represented 97% of sales volumes
Status of the Trust
As oil and natural gas prices continue to be depressed and as we
are unable to predict future commodity prices with any greater
precision than the futures market, it appears likely that
distributions to the Trust will continue to be significantly
impacted. The Trust Agreement provides that the Trust will
terminate in the event that annual proceeds received by the Trust
attributable to the Conveyed Interests (as defined in the Trust
Agreement), in the aggregate, are less than $2 million for each of
any two consecutive years.
Overview of Trust Structure
Pacific Coast Oil Trust is a perpetual Delaware statutory trust
formed by PCEC to own interests in certain oil and gas properties
in the Santa Maria Basin and the Los Angeles Basin in California
(the “Underlying Properties”). The Underlying Properties and the
Trust’s net profits and royalty interests are described in the
Trust’s filings with the Securities and Exchange Commission (the
“SEC”). As described in the Trust’s filings with the SEC, the
amount of any periodic distributions is expected to fluctuate,
depending on the proceeds received by the Trust as a result of
actual production volumes, oil and gas prices, development
expenses, and the amount and timing of the Trust’s administrative
expenses, among other factors. For additional information on the
Trust, please visit www.pacificcoastoiltrust.com.
Cautionary Statement Regarding
Forward-Looking Information
This press release contains statements that are "forward-looking
statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All statements contained in this
press release, other than statements of historical facts, are
"forward-looking statements" for purposes of these provisions.
These forward-looking statements include the amount and date of any
anticipated distribution to unitholders. The anticipated
distribution is based, in part, on the amount of cash received or
expected to be received by the Trust from PCEC with respect to the
relevant 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. Statements made in this press release are qualified by
the cautionary statements made in this press release. Neither PCEC
nor the Trustee intends, and neither assumes any obligation, to
update any of the statements included in this press release. An
investment in units issued by Pacific Coast Oil Trust is subject to
the risks described in the Trust's Annual Report on Form 10-K for
the year ended December 31, 2015 filed with the SEC on March 4,
2016, and if applicable, the Trust’s Quarterly Reports on Form
10-Q. The Trust's Annual Report on Form 10-K and the Quarterly
Reports on Form 10-Q reports are available over the Internet at the
SEC's website at http://www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20161122005905/en/
Pacific Coast Oil TrustThe Bank of New York Mellon Trust
Company, N.A., as TrusteeSarah Newell, 1-512-236-6555
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