Mesa Royalty Trust Announces Trust Income for May 2021
May 20 2021 - 4:35PM
Business Wire
Mesa Royalty Trust (the “Trust”) (NYSE: MTR) announced today the
Trust income distribution for the month of May 2021. Unitholders of
record on May 30, 2021 will receive distributions amounting to
$0.271394136 per unit, payable on July 30, 2021. Because May 30,
2021 falls on a weekend, the effective record date will be May 28,
2021. The Trust received $526,550, all of which came from the
Colorado portion of the Trust’s San Juan Basin properties operated
by SIMCOE LLC, an affiliate of IKAV Energy Inc. (“Operator”). No
income was received in May 2021 from any other working interest
owner.
The Trust was formed to own an overriding royalty interest of
the net proceeds attributable to certain producing oil and gas
properties located in the Hugoton field of Kansas and the San Juan
Basin fields of New Mexico and Colorado. As described in the
Trust's public filings, the amount of the monthly distributions is
expected to fluctuate from month to month, depending on the
proceeds, if any, received by the Trust as a result of production,
oil and natural gas prices and the amount of the Trust’s
administrative expenses, among other factors. On February 28, 2020,
BP Amoco Company (“BP”) completed the sale of all of its interest
in the San Juan Basin—Colorado properties to Operator. Following
Operator’s acquisition of BP’s interest in the San Juan
Basin—Colorado properties, there was a transition period to
transfer historical information, knowledge and processes from one
owner to the other. Operator has informed the Trustee that the
amount paid to the Trust in the month of May 2021 includes adjusted
proceeds for prior periods and is subject to further adjustment in
future periods for certain expenses that Operator is entitled to
deduct under the conveyance. Operator is expected to recover such
expense amounts by withholding a portion or all of the net proceeds
that would otherwise be payable to the Trust in future periods.
Operator has also informed the Trustee that the income paid to the
Trust in May 2021 includes unusually high pricing due to extreme
winter weather, and that income for future periods may be reduced
if pricing declines, as it is expected to do. Any reduction in
income paid to the Trust for these properties may materially reduce
or eliminate distributions to the Trust’s unitholders in future
periods.
Proceeds reported by the working interest owners for any month
are not generally representative of net proceeds that will be
received by the Trust in future periods. As further described in
the Trust’s Form 10-K and Form 10-Q filings, production and
development costs for the royalty interest have resulted in
substantial accumulated excess production costs, which will
decrease Trust distributions, and in some periods may result in no
Trust distributions. The amount of proceeds, if any, received or
expected to be received by the Trust (and its ability to pay
distributions to unitholders) has been and will continue to be
directly affected, among other things, by volatility in the
industry and revenues and expenses reported to the Trust by working
interest owners. Any additional expenses and adjustments, among
other things, will reduce proceeds to the Trust, which will reduce
the amount of cash available for distribution to unitholders and in
certain periods could result in no distributions to
unitholders.
This press release contains forward-looking statements. No
assurances can be given that the expectations contained in this
press release will prove to be correct. The working interest owners
alone control historical operating data, and handle receipt and
payment of funds relating to the royalty properties and payments to
the Trust for the related royalty. The Trustee cannot assure that
errors or adjustments or expenses accrued by the working interest
owners, whether historical or future, will not affect future
royalty income and distributions by the Trust. Other important
factors that could cause these statements to differ materially
include delays in actual results of drilling operations, risks
inherent in drilling and production of oil and gas properties,
declines in commodity pricing, and other factors described in the
Trust’s Form 10-K for the year ended December 31, 2020 under “Part
I, Item 1A. Risk Factors.” Statements made in this press release
are qualified by the cautionary statements made in such risk
factors. The Trust does not intend, and assumes no obligations, to
update any of the statements included in this press release. Each
unitholder should consult its own tax advisor with respect to its
particular circumstances.
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version on businesswire.com: https://www.businesswire.com/news/home/20210520006035/en/
Mesa Royalty Trust The Bank of New York Mellon Trust Company,
N.A., as Trustee Elaina Rodgers 713-483-6020
http://mtr.q4web.com/home/default.aspx
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