Whiting USA Trust I Announces Trust Quarterly Distribution
May 07 2013 - 4:08PM
Business Wire
Whiting USA Trust I (NYSE: WHX) announced the second Trust
distribution in 2013, which relates to net profits generated during
the first quarterly payment period of 2013.
Unitholders of record on May 20, 2013 will receive a
distribution amounting to $6,284,368 or $0.453290 per unit, which
is payable on or before May 30, 2013.
Volumes, average sales prices and net profits for the quarterly
payment period were:
Sales volumes: Oil (Bbl) 167,532 Natural gas (Mcf)
633,426 Total (BOE) 273,103 Average sales prices: Oil
(per Bbl) $ 79.83 Natural gas (per Mcf) $ 3.50 Gross
proceeds: Oil sales $ 13,374,307 Natural gas sales 2,218,736
Total gross proceeds $ 15,593,043 Costs: Lease
operating expenses(1) $ 7,138,136 Production taxes 1,088,896
Realized gains on hedging settlements(2) - Total
costs $ 8,227,032 Net profits $ 7,366,011 Percentage
allocable to Trust’s Net Profits Interest 90 % Total
cash available for the Trust $ 6,629,410 Provision for estimated
Trust expenses (300,000 ) Montana state income taxes withheld
(45,042 ) Net cash proceeds available for distribution $
6,284,368 Trust units outstanding 13,863,889
Cash distribution per Trust unit $ 0.453290 (1) The
Trust’s underlying properties incurred increases in lease operating
expenses during the first quarterly payment period of 2013, on a
per BOE basis, due to overall production declining at a faster rate
than the fixed and semi-variable costs attributable to the
underlying properties. (2) All costless collar hedge contracts
terminated as of December 31, 2012 (which hedging effects extended
through the quarterly payment period covered by the February 2013
distribution to unitholders) and no additional hedges are allowed
to be placed on the Trust assets. Consequently, for distributions
after February 2013, there will be no cash settlement gains or
losses on commodity derivatives, and the Trust will have increased
exposure to oil and natural gas price volatility.
The net profits interest represents the right to receive 90% of
the net proceeds from Whiting Petroleum Corporation’s interests in
certain existing oil and natural gas producing properties located
primarily in the Rocky Mountains, Mid-Continent, Permian Basin and
Gulf Coast regions of the United States. The net profits interest
will terminate when 9.11 MMBOE have been produced and sold from the
underlying properties (which amount is equivalent to 8.20 MMBOE
attributable to the net profits interest), and the Trust will soon
thereafter wind up its affairs and terminate, after which it will
pay no further distributions. As described in the Trust’s public
filings, since the assets of the Trust are depleting assets, a
portion of each cash distribution paid on the Trust units should be
considered by investors as a return of capital, with the remainder
being considered as a return on investment, and consequently the
market price of the Trust units will decline to zero at termination
of the Trust.
As of March 31, 2013, on a cumulative accrual basis, 6.36 MMBOE
(77%) of the Trust’s total 8.20 MMBOE have been produced and sold.
Based on the Trust’s reserve report for the underlying properties
as of December 31, 2012, the 9.11 MMBOE of reserves (8.20 MMBOE to
the 90% net profits interest) are projected to be produced from the
underlying properties by June 30, 2015, which reflects expected
year over year decline rates ranging from approximately 9% to 13%
between 2013 and 2015. However, the rate of future production
cannot be predicted with certainty, and 9.11 MMBOE (8.20 MMBOE to
the 90% net profits interest) may be produced before or after the
currently projected date. In addition, cash distributions to
unitholders may decline at a faster rate than the rate of
production due to fixed and semi-variable costs attributable to the
underlying properties.
This press release contains forward-looking statements,
including all statements made in this press release other than
statements of historical fact. No assurances can be given that such
statements will prove to be correct. The announced distributable
amount is based, in part, on the amount of cash received or
expected to be received by the Trust from Whiting Petroleum
Corporation pursuant to the net profits interest with respect to
the relevant quarterly 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, fluctuations in oil and
natural gas prices, uncertainty of estimates of oil and natural gas
reserves and production, risks inherent in the operation and
production of oil and gas properties, and future production costs.
Statements made in this press release are qualified by the
cautionary statements made in this press release. The Trustee does
not intend, and assumes no obligation, to update any of the
statements included in this press release.