Pacific Coast Oil Trust Announces There Will Be No October Cash Distribution
September 30 2019 - 4:15PM
Business Wire
PACIFIC COAST OIL TRUST (NYSE:ROYT) (the “Trust”), a 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 in October 2019. The Trust’s
distribution calculation relates to net profits and overriding
royalties generated during August 2019 as provided in the
conveyance of net profits and overriding royalty interest. All
information in this press release has been provided to the Trustee
by PCEC.
The current month’s calculation for the Developed Properties
resulted in $0.7 million of direct operating expenses and
development costs in excess of revenues. The current month’s
revenues were $3.6 million, lease operating expenses including
property taxes were $2.6 million, and capital expenditures were
$1.8 million, predominantly allocated to plugging and abandonment
of idle wellbores. Average realized prices for the Developed
Properties were $58.22 per Boe in August, as compared to $62.82 per
Boe in July. The net deficit amount for the month of August for the
Developed Properties was approximately $0.6 million, which will be
subtracted from any future net profits until the cumulative net
profits deficit for the Developed Properties has been reduced to
zero.
The current month’s calculation included approximately $86,000
for the 7.5% overriding royalty interest on the Remaining
Properties from Orcutt Diatomite and Orcutt Field. Average realized
prices for the Remaining Properties were $55.79 per Boe in August,
as compared to $60.04 per Boe in July. The cumulative net profits
deficit for the Remaining Properties, including the 7.5% overriding
royalty interest payments, decreased by approximately $0.1 million
and now totals $0.4 million as of August 2019.
The monthly operating and services fee of approximately $93,000
payable to PCEC and Trust general and administrative expenses of
$45,000 together exceeded the distribution of approximately $86,000
received from PCEC from the 7.5% overriding royalty interest on the
Remaining Properties, creating a shortfall of approximately
$52,000.
PCEC has 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. Further, if the Trust
requires more than the $1 million under the letter of credit to pay
administrative expenses, PCEC may loan funds to the Trust necessary
to pay such expenses. 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. The Trust will be borrowing funds from PCEC to pay the
expected shortfall of approximately $52,000. Consequently, no
further distributions will be made to Trust unitholders until the
indebtedness created by such amounts drawn or 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 August 2019:
Underlying Properties
Sales Volumes
Average Price
(Boe)
(Boe/day)
(per Boe)
Developed Properties (a)
62,256
2,008
$58.22
Remaining Properties (b)
21,315
688
$55.79
(a) Crude oil sales represented 98% of
sales volumes
(b) Crude oil sales represented 100% of
sales volumes
Overview of Trust Structure
Pacific Coast Oil Trust is a 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 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. Any 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. The amount of such
cash received or expected to be received by the Trust (and its
ability to pay distributions) has been and will be significantly
and negatively affected by prevailing low commodity prices, which
have declined significantly, could decline further and could remain
low for an extended period of time. 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, 2018 filed with the SEC on March 8, 2019, and if
applicable, the Trust’s subsequent Quarterly Reports on Form 10-Q.
The Trust's Annual Reports 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: https://www.businesswire.com/news/home/20190930005781/en/
Pacific Coast Oil Trust The Bank of New York Mellon Trust
Company, N.A., as Trustee Sarah Newell 1(512) 236-6555
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