WHX

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 7, 2014

 

 

WHITING USA TRUST I

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware		001-34026		26-6053936
(State or other jurisdiction of		(Commission		(I.R.S. Employer
incorporation or organization)		File Number)		Identification No.)

The Bank of New York Mellon Trust Company, N.A., Trustee

Global Corporate Trust

919 Congress Avenue

Austin, Texas 78701

(Address of principal executive offices)

Registrant’s telephone number, including area code: (512) 236-6545

NOT APPLICABLE

(Former name, former address and former fiscal year,

if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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ITEM 2.02.  Results of Operations and Financial Condition.

  Attached as Exhibit 99.1 is a press release issued on behalf of the Registrant. The information furnished is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

ITEM 9.01.  Financial Statements and Exhibits.

 

(d)

Exhibits.

 

99.1

Press Release dated August 7, 2014.

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Date: August 7, 2014

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Exhibit Index

 

Exhibit Number		Description
99.1		Press Release dated August 7, 2014.

 

Exhibit 99.1

Whiting USA Trust I

Whiting USA Trust I Announces Trust Quarterly Distribution

WHITING USA TRUST I

The Bank of New York Mellon Trust Company, N.A., Trustee

 

FOR IMMEDIATE RELEASE

Austin, Texas, August 7, 2014 – Whiting USA Trust I (NYSE Symbol – WHX) announced the third Trust distribution in 2014, which relates to net profits generated during the second quarterly payment period of 2014.

Unitholders of record on August 19, 2014 will receive a distribution of $0.560534 per unit, which is payable on or before August 29, 2014.

Volumes, average sales prices and net profits for the quarterly payment period were:

 

Sales volumes:
Oil (Bbl)(1)			170,304
Natural gas (Mcf)			597,391
Total (BOE)			269,869
Average sales prices:
Oil (per Bbl)(1)		$	85.97
Natural gas (per Mcf)		$	4.74
Gross proceeds:
Oil sales(1)		$	14,640,946
Natural gas sales			2,831,400
Total gross proceeds		$	17,472,346
Costs:
Lease operating expenses		$	7,384,578
Production taxes			1,120,131
Realized gains on hedging settlements(2)			-
Total costs		$	8,504,709
Net profits		$	8,967,637
Percentage allocable to Trust’s Net Profits Interest			90%
Total cash available for the Trust		$	8,070,873
Provision for estimated Trust expenses			(250,000)
Montana state income taxes withheld			(49,694)
Net cash proceeds available for distribution		$	7,771,179
Trust units outstanding			13,863,889
Cash distribution per Trust unit		$	0.560534

 

(1)

Oil includes natural gas liquids.

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(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 Trust assets. Consequently, for all distributions after February 2013, there have not been and will not be any cash settlement gains or losses on commodity derivatives, and the Trust therefore has increased exposure to oil and natural gas price volatility currently.

The Trust’s 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 (which amount is equivalent to 8.20 MMBOE attributable to the net profits interest) have been produced and sold from the underlying properties, and the Trust will soon thereafter wind up its affairs and terminate, after which it will pay no further distributions. Consequently the market price of the Trust units will decline to zero around or shortly after the net profits interest termination date, which is currently estimated to occur during the quarterly payment period ending March 31, 2015. Therefore, to the extent that the Trust units are trading at a price substantially in excess of the aggregate distributions that may be reasonably expected to be made prior to the termination of the Trust, the market price decline in Trust units is likely to include one or more abrupt substantial decreases. 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 or yield.

As of June 30, 2014, on a cumulative accrual basis, 7.60 MMBOE (93%) 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, 2013, 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 March 31, 2015, shortly after which the Trust would terminate. Additionally, the year-end reserve report reflects an expected annualized decline rate of approximately 11% for crude oil and 15% for natural gas from 2014 through the estimated net profits interest termination date. 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, the establishment of a cash reserve for the payment of expenses after the final distribution to unitholders, 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.

 

Contact:		Whiting USA Trust I
		The Bank of New York Mellon Trust Company, N.A., as Trustee
		Mary Jo Davis
		(512) 236-6545
		919 Congress Avenue, Austin, TX 78701
		http://whx.investorhq.businesswire.com/

 

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