Pacific Coast Oil Trust Announces There Will Be No February Cash Distribution & Provides Estimated Timing for Cash Distribution
January 31 2017 - 04:15PM
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 February
15, 2017. The Trust’s distribution calculation relates to net
profits and overriding royalties generated during December 2016 as
provided in the conveyance of net profits and overriding royalty
interest.
The current month’s calculation for the Developed Properties
resulted in $501,000 of revenues less direct operating expenses and
development costs. The current month’s revenues were $3.7 million,
lease operating expenses including property taxes were $2.9
million, and capital expenditures were $364,000. Average realized
prices for the Developed Properties were $47.33 per Boe in
December, as compared to $40.27 per Boe in November. Net profits
for the month of December for the Developed Properties were
$446,000. The Net Profits for the Developed Properties included a
$70,000 true-up of property tax adjustments related to reassessed
values for Orcutt Field and Orcutt Diatomite for the tax years 2011
through 2016, which were chargeable in part to the Trust beginning
in April 2012.
The current month’s calculations included $72,000 for the 7.5%
overriding royalty on the Remaining Properties from Orcutt
Diatomite and Orcutt Field. Average realized prices for the
Remaining Properties were $44.58 per Boe in December, as compared
to $37.45 per Boe in November. The cumulative net profits deficit
for the Remaining Properties, including the 7.5% overriding royalty
payments, decreased $42,000 to a total of $2.0 million for
December.
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 $415,000, reflecting $446,000 in income from
the Developed Properties and $72,000 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
and $15,000 in Trust general and administrative expenses. 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 $660,000 in February 2017.
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 December 2016:
Underlying Properties Sales Volumes Average Price
(Boe) (per Boe) Developed Properties (a) 79,147 $ 47.33 Remaining
Properties (b) 17,069 $ 44.58 (a) Crude oil sales
represented 98% of sales volumes (b) Crude oil sales represented
100% of sales volumes
Status of the Trust
During the first quarter 2017, assuming the current strip price
for Brent oil and no unexpected losses to production or increases
in capital or expenses, the Trust expects to produce net profits
and royalties to the benefit of ROYT unitholders that will:
- Exceed $2 million of proceeds received
by the Trust attributable to the Conveyed Interests in 2017 (see
the discussion of the “Revenue Termination Provision” in the
December 22, 2016 press release and the discussion of the
termination provisions in the Trust’s SEC filings). If the $2
million threshold in the Revenue Termination Provision is exceeded,
the Trust will no longer be at risk of termination at the end of
2017.
- Make a cash distribution to unitholders
from net profits and overriding royalties generated during the
first quarter of 2017. Cash distributions are made two months after
production; accordingly, the cash distribution is expected to occur
in March-May 2017.
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
amount of proceeds expected to be received by the Trust
attributable to the Conveyed Interests during the first quarter of
2017, the expected distribution to unitholders relating to
estimated first quarter 2017 production, and the potential effects
of any such proceeds on the risk of the termination of the Trust at
the end of 2017. 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 the prices received for oil, the amount
of oil actually produced from the Underlying Properties, increases
in capital, 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 Quarterly Reports on Form 10-Q 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/20170131006285/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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