Important Message to Unitholders
Dear Unitholder:
On August 30, 2017, Enduro Royalty Trust (NYSE: NDRO) (the Trust) will hold a Special Mee
ti
ng of unitholders to consider proposals to approve the sale of certain oil and natural gas proper
ti
es (the Dives
ti
ture Proper
ti
es) that cons
ti
tute a por
ti
on of the proper
ti
es burdened by the Trusts 80% net profits interest, the release of the net profits interest with respect to the Dives
ti
ture Proper
ti
es, and related proposals to effect the sale transac
ti
ons.
The following are the characteris
ti
cs of the transac
ti
ons and Dives
ti
ture Proper
ti
es:
·
The es
ti
mated special distribu
ti
on to unitholders upon approval and consumma
ti
on of the proposed transac
ti
ons is an
ti
cipated to be $1.18 per unit.
For the year ended December 31, 2016, the Trust paid a total distribu
ti
on of approximately $0.26 per unit.
·
The Dives
ti
ture Proper
ti
es accounted for approximately $0.003 of the $0.26 per unit distribu
ti
on in 2016, which represented approximately 1% of the total distribu
ti
on for the period.
·
The sales volumes from the Dives
ti
ture Proper
ti
es represented approximately 2% of the sales volume for 2016.
The Transac
ti
ons & An
ti
cipated Distribu
ti
on*
|
|
|
|
Total sales price of Divestiture Properties
|
$50.4 million
(1)
|
|
|
Es
ti
mated 80% net proceeds to unitholders (less certain expenses & holdbacks)
|
$38.8 million
(2)
|
|
|
An
ti
cipated distribu
ti
on per Trust unit (33 million Trust units outstanding)
|
$1.18/unit
|
(1)
Subject to ordinary closing adjustments and retained holdback amount to cover possible indemnifica
ti
on obliga
ti
ons under the purchase and sale agreements.
(2)
Includes estimated expenses to be incurred relating to the transactions.
* Please be aware that the es
ti
mates in the table above are preliminary and subject to change based on numerous factors, most of which are beyond the control of the Trust and Enduro Resource Partners LLC . The amount of proceeds distributed from the sales could vary materially.
The Special Mee
ti
ng will consider proposals to approve:
1) Eight transac
ti
ons pursuant to which:
·
Enduro Opera
ti
ng LLC will sell its interests in the Dives
ti
ture Proper
ti
es
·
The Trust will release the related net profits interest associated with the Dives
ti
ture Proper
ti
es
·
The net proceeds received by the Trust with respect to each such sale will be distributed to the unitholders
2)
Amendments to the Amended and Restated Agreement of the Trust (the Trust Agreement) to permit the transac
ti
ons
3)
Amendments to the Conveyance of Net Profits Interest to permit the transac
ti
ons
4)
Amendments to the Trust Agreement to permit costs associated with the special mee
ti
ng to be paid pro rata by the Trust and Enduro Resource Partners LLC
5)
An adjournment of the Special Mee
ti
ng, if necessary or appropriate, to permit solicita
ti
on of addi
ti
onal proxies in favor of the proposals
All of proposals 1, 2 and 3 above must be approved for the above sales transac
ti
ons to be approved and for the Trusts por
ti
on of the net proceeds to be paid to you.
YOUR VOTE IS IMPORTANT
Please vote your units as soon as possible. Whether or not you a
tt
end the special mee
ti
ng, we urge you to submit your vote promptly once you have reviewed the final proxy statement.
Not vo
ti
ng will have the same effect as a vote against the proposals.
PLEASE VOTE TODAY!
If you have any ques
ti
ons or require any assistance with respect to vo
ti
ng your units, please contact Morrow Sodali, the Trusts proxy solicitor, at the phone number or email listed below:
Call Toll Free: (800) 662
-
5200
Email: NDRO.info@morrowsodali.com
|
The enclosed proxy statement provides you with detailed informa
ti
on about the proposals and related ma
tt
ers. You are encouraged to read the en
ti
re document and other relevant documents filed or to be filed with the SEC carefully and in their en
ti
rety.