SandRidge Permian Trust Announces Quarterly Distribution
October 29 2015 - 4:15PM
Business Wire
SANDRIDGE PERMIAN TRUST (NYSE: PER) today announced a quarterly
distribution for the three-month period ended September 30, 2015
(which primarily relates to production attributable to the Trust’s
interests from June 1, 2015 through August 31, 2015) of $9.9
million, or $0.250 per Common Unit. The Trust makes distributions
on a quarterly basis approximately 60 days after the end of each
quarter. The distribution is expected to occur on or before
November 27, 2015 to holders of record as of the close of business
on November 13, 2015.
During the three-month production period ended August 31, 2015,
total sales volumes were lower than initial Trust estimates and
oil, natural gas and natural gas liquids (“NGL”) experienced
continued depressed pricing. The previous period’s low commodity
prices were partially offset by net cash settlements received under
the derivatives agreement, whereas no such arrangements were in
place for the three-month production period ended August 31, 2015.
Additionally, as no additional development wells will be drilled,
the Trust’s production is expected to decline each quarter during
the remainder of its life.
The Trust owns royalty interests in oil and natural gas
properties in the Central Basin Platform of the Permian Basin in
Andrews County, Texas and 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 the quarterly distributions
is expected to fluctuate from quarter to quarter, depending on the
proceeds received by the Trust as a result of actual production
volumes, oil, NGL and natural gas prices and the amount and timing
of the Trust’s administrative expenses, among other factors.
Although there is no assurance of any minimum distribution in any
quarterly period, during the subordination period (as described in
the Trust’s filings), holders of Common Units are entitled to
receive an amount up to the “Subordination Threshold” (which varies
from quarter to quarter) prior to any distribution being made for
that quarter in respect of the Subordinated Units, all of which are
held by SandRidge Energy, Inc. (“SandRidge”). If the amount
available for distribution in any quarterly period is sufficient to
distribute an amount equal to the Subordination Threshold to the
holders of all units (including the Subordinated Units), any
additional balance is distributed to holders of all units pro rata,
up to the amount of the Incentive Threshold for the quarter. Trust
units are entitled to receive 50% of any cash available for
distribution in excess of the Incentive Threshold for the quarter.
The Trust’s quarterly income available for distribution to the
Common Units is below the Subordination Threshold of $0.560 per
Common Unit for the quarter, and no quarterly distribution will be
paid to the Subordinated Units.
Volumes, price and distributable income available to unitholders
for the period were (dollars in thousands, except per unit):
Sales Volumes Oil (MBbl) 216 NGLs (MBbl) 29
Natural Gas (MMcf) 85 Combined (MBoe) 259
Average Price Oil
(per Bbl) $ 50.18 NGLs (per Bbl) $ 14.41 Natural Gas (per Mcf) $
2.11
Average Price - including impact of derivative settlements
and post-production expenses Oil (per Bbl) $ 50.18 NGLs (per
Bbl) $ 14.41 Natural gas (per Mcf) $ 1.89
Revenues Royalty
income $ 11,436
Expenses 1,580
Distributable income
available to unitholders $ 9,856
Distributable income per
Common Unit (39,375,000 units issued and outstanding) $ 0.250
Distributable income per Subordinated Unit (13,125,000 units
issued and outstanding) $ 0.000
On January 1, 2016, the day following the end of the fourth full
calendar quarter subsequent to SandRidge’s satisfaction of its
drilling obligation with respect to the development wells, which
occurred in the fourth quarter of 2014, the Subordinated Units will
automatically convert into Common Units on a one-for-one basis.
Distributions made on Common Units in respect of subsequent periods
will no longer have the benefit of the Subordination Threshold, nor
will the Common Units be subject to the Incentive Threshold, and
all Trust unitholders will share on a pro rata basis in the Trust’s
distributions.
Pursuant to IRC Section 1446, withholding tax on income
effectively connected to a United States 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 United States sources
allocated to foreign partners should be made at 30% of gross income
unless the rate is reduced by treaty. This is intended to be a
qualified notice by SandRidge Permian Trust to nominees and brokers
as provided for under Treasury Regulation Section 1.1446-4(b), and
while specific relief is not specified for Section 1441 income,
this disclosure is intended to suffice. Nominees and brokers should
withhold at the highest marginal rate, currently 39.6% for
individuals, on the distribution made to foreign partners.
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 unit holders.
The anticipated distribution is based, in part, on the amount of
cash received or expected to be received by the Trust from
SandRidge 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 SandRidge nor the Trustee intends, and neither
assumes any obligation, to update any of the statements included in
this press release. An investment in Common Units issued by
SandRidge Permian Trust is subject to the risks described in the
Trust’s Annual Report on Form 10-K for the year ended
December 31, 2014, and all of its other filings with the SEC.
The Trust’s quarterly and other filed reports are or will be
available over the Internet at the SEC’s web site at http://www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20151029006410/en/
SandRidge Permian TrustThe Bank of New York Mellon
Trust Company, N.A., as TrusteeSarah Newell,
1-512-236-6531
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