Pacific Coast Oil Trust Announces There Will Be No May Cash Distribution
April 27 2018 - 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 there will be no cash distribution to the holders of its
units of beneficial interest in May 2018. The Trust’s distribution
calculation relates to net profits and overriding royalties
generated during March 2018 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 $0.1 million of direct operating expenses and
development costs in excess of revenues. The current month’s
revenues were $4.2 million, lease operating expenses including
property taxes were $2.6 million and capital expenditures were $1.8
million. Average realized prices for the Developed Properties were
$63.67 per Boe in March, as compared to $64.05 per Boe in February.
The net deficit amount for the month of March for the Developed
Properties was $95,000.
For Developed and Remaining Properties, capital expenditures
totaled $2.2 million, which represents approximately 22% of PCEC’s
total budgeted 2018 capital program referenced in the Trust’s
guidance (as disclosed in the Trust’s February 28, 2018 press
release and its Annual Report on Form 10-K for the year ended
December 31, 2017) and is high relative to an average of
expected monthly totals. The expenditures included: (i) $1.35
million for a gas-fired microturbine at West Pico that will provide
power and reduce ongoing operating costs at the field, (ii) $0.4
million for well work relating to two DOGGR-mandated injector
wells, including one scheduled for the second quarter that was
accelerated to maintain water injection in the field and avoid oil
production loss, (iii) $0.3 million for work relating to eight
rate-generating Orcutt Diatomite additional perforations and one
Orcutt Conventional injection project and (iv) $0.1 million for
initial work on two rate-generating Orcutt Diatomite redrills.
The current month’s calculation included $59,000 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 $60.75 per Boe in March, as compared to
$60.97 per Boe in February. The cumulative net profits deficit for
the Remaining Properties, including the 7.5% overriding royalty
interest payments, increased $3,000 and remains at $1.5 million as
of March 31, 2018.
The monthly operating and services fee payable to PCEC and Trust
general and administrative expense totaled approximately $139,000
and exceeded the distribution of approximately $59,000 received
from PCEC from the 7.5% overriding royalty interest on the
Remaining Properties from Orcutt Field and Orcutt Diatomite.
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 its
administrative expenses; 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 March 2018:
Underlying Properties Sales Volumes
Average Price (Boe) (Boe/day) (per Boe) Developed
Properties (a) 66,696 2,151 $63.67 Remaining
Properties (b) 13,831 446 $60.75 (a) Crude oil sales
represented 100% of sales volumes (b) Crude oil sales represented
100% of sales volumes
West Pico Natural Gas Export Line Update
Due to a temporary shutdown downstream of the natural gas export
pipeline from West Pico, West Pico had to temporarily shut in
select wells to limit the amount of associated gas produced from
oil production. West Pico net production attributable to the
Developed Properties prior to the shutdown was approximately 320
Boe/d (approximately 260 Boe/d net to the Trust). During the
shutdown months, which began in December 2017, production was down
by approximately 40%. The natural gas export pipeline was returned
to service during April 2018. With the return to service of the
natural gas export line, West Pico production has now returned to
levels similar to those prior to the shutdown months.
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 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 PCEC’s estimates regarding
its 2018 capital program and the Trust’s expected borrowings from
PCEC. 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, 2017 filed with
the SEC on March 9, 2018, 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/20180427005888/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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