Enduro Royalty Trust (NYSE: NDRO) (the “Trust”) today announced
results from recently completed wells in the Haynesville area of
north Louisiana and reported the net profits interest calculation
for October 2017.
Haynesville Results
In early September, four gross (0.45 net) wells completed in the
Haynesville (together, the “Haynesville wells”) began producing at
a combined 24-hour gross rate of over 73 MMcf/D. Net to the
interest of Enduro Resource Partners LLC (“Enduro”), the sponsor of
the Trust, the combined 24-hour initial rate was approximately 8.4
MMcf/D. The combined average 30-day production from the wells was
54.7 MMcf/D, or approximately 6.2 MMcf/D net to Enduro’s 11.4%
working interest. The 30-day average results were over 25% higher
than initial expectations from the wells, and the 30-day production
net to Enduro’s interest represents a 60% increase over the monthly
natural gas production from all the properties underlying the
Trust.
Monthly Net Profits Interest Calculation
Due to capital activity for the Haynesville wells and increased
lease operating expenses during the month of August 2017, direct
operating and development expenses for the current month net
profits interest calculation exceeded cash receipts. The current
month net profits interest calculation primarily represents oil
production during July 2017, natural gas production during June
2017, and costs incurred in August 2017. The following table
displays underlying oil and natural gas sales volumes and average
prices attributable to the current and prior month net profits
interest calculations.
Underlying Sales Volumes Average Price
Oil Natural Gas Oil Natural
Gas Bbls Bbls/D Mcf
Mcf/D (per Bbl) (per Mcf) Current Month
60,677 1,957 292,494 9,750 $ 43.60 $ 2.77 Prior Month 58,631
1,954 315,138 10,166 $ 42.40 $ 2.78
As the Haynesville wells began producing in early September 2017
and the natural gas sales volumes reported above primarily
represent sales volumes in June 2017, none of the results from
these wells are included in sales volumes or natural gas
receipts.
The following table displays the net profits interest
calculation for the current month and the resulting shortfall in
net profits:
Gross profits: Oil cash receipts $ 2,645,779 Natural
gas cash receipts 810,893 Total 3,456,672
Costs: Direct operating expenses: Lease
operating expenses 2,218,000 Compression, gathering and
transportation 191,000 Production, ad valorem and other taxes
280,000 Development expenses 783,000 Total
3,472,000 Net profits (shortfall) attributable to
underlying properties (15,328 ) Percentage allocable to net profits
interest 80 % Net profits (shortfall) to Trust from net
profits interest $ (12,262 )
As a result, no monthly cash distribution will be paid in
November 2017 to the Trust’s unitholders. The shortfall in net
profits will be deducted from any net profits in next month’s net
profits interest calculation. At this time, Enduro anticipates that
capital development expenses in next month’s distribution
calculation will be approximately $1.5 million, an increase from
the current month, due to the remainder of the capital associated
with the Haynesville wells.
Oil cash receipts for the properties underlying the Trust
totaled $2.6 million for the current month, an increase of $0.2
million from the prior month calculation as a result of an increase
in the realized wellhead price as well as an increase in production
volumes. The increase in realized prices was driven by a $1.39
increase in NYMEX pricing from June to July. Oil sales volumes
increased as a result of one additional production day in July as
compared to June.
Natural gas receipts decreased $0.1 million from the prior
month, totaling $0.8 million, as a result of decreased sales
volumes. Natural gas sales volumes declined primarily due to one
less production day in June as compared to May.
Total direct operating expenses, including lease operating
expenses, production and ad valorem taxes, and gathering and
transportation expenses, totaled $2.7 million, an increase of $0.2
million from the prior month as a result of increased lease
operating expenses. Of the total $0.8 million in capital
expenditures during August 2017, approximately $0.4 million related
to the four gross (0.45 net) wells in the Haynesville. Through
August 2017, capital incurred for the Haynesville wells has totaled
$2.4 million.
About Enduro Royalty Trust
Enduro Royalty Trust is a Delaware statutory trust formed by
Enduro Resource Partners to own a net profits interest representing
the right to receive 80% of the net profits from the sale of oil
and natural gas production from certain of Enduro Resource
Partners’ properties in the states of Texas, Louisiana and New
Mexico. As described in the Trust’s filings with the Securities and
Exchange Commission, the amount of the 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
and the amount and timing of capital expenditures and the Trust’s
administrative expenses, among other factors. Future distributions
are expected to be made on a monthly basis. For additional
information on the Trust, please visit
www.enduroroyaltytrust.com.
Forward-Looking Statements and Cautionary Statements
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 statements regarding
future distribution calculations and expected expenses, including
capital expenditures. Although no distribution will be made in
November 2017, normally the anticipated distribution is based, in
large part, on the amount of cash received or expected to be
received by the Trust from Enduro Resource Partners with respect to
the relevant period. 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. Initial production rates may not be
indicative of future production rates and are not indicative of the
amounts of oil and gas that a well may produce. Statements made in
this press release are qualified by the cautionary statements made
in this press release. Neither Enduro Resource Partners 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 Enduro Royalty Trust is subject to the risks
described in the Trust’s filings with the SEC, including the risks
described in the Trust’s Annual Report on Form 10-K for the year
ended December 31, 2016, filed with the SEC on March 15, 2017. The
Trust’s quarterly and other filed reports are or will be 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/20171020005081/en/
Enduro Royalty TrustThe Bank of New York Mellon Trust Company,
N.A., as TrusteeSarah Newell, 1-512-236-6555
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