HOUSTON, Nov. 4, 2020 /PRNewswire/ -- Chesapeake
Granite Wash Trust (OTC Markets Group, Inc.:CHKR) (the "Trust")
today announced that its common unit distribution for the quarter
ended September 30, 2020 (which
primarily relates to production attributable to the Trust's royalty
interests from June 1, 2020 through
August 31, 2020) will be $0.0012 per common unit. The distribution will be
paid on November 30, 2020 to common
unitholders of record at the close of business on November 19, 2020.
The following table provides supporting documentation, as
provided by Chesapeake Energy Corporation ("Chesapeake") to the
Trust, for the calculation of distributable income available to
unitholders for the production period from June 1, 2020 through August 31, 2020.
|
Sales
volumes:
|
|
|
|
Oil (mbbl)
|
|
11
|
|
|
Natural gas
(mmcf)
|
|
355
|
|
|
Natural gas liquids
(mbbl)
|
|
37
|
|
|
Total oil equivalent volumes
(mboe)
|
|
108
|
|
|
|
|
|
|
Average price
received per production unit:(1)
|
|
|
|
Oil
|
|
$
|
33.05
|
|
|
Natural
gas(2)
|
|
$
|
(0.02)
|
|
|
Natural gas
liquids
|
|
$
|
10.85
|
|
|
|
|
|
|
Distributable income
calculation (in thousands except per unit income):
|
|
|
|
Revenue less
production taxes(1)
|
|
$
|
711
|
|
|
Trust administrative
expenses
|
|
(585)
|
|
|
Cash withheld to
increase cash reserves(3)
|
|
(70)
|
|
|
Distributable income
available to unitholders
|
|
$
|
56
|
|
|
Calculated
distributable income per unit(4)
|
|
$
|
0.0012
|
|
|
|
(1) Includes
the effect of certain marketing, gathering and transportation
deductions.
|
|
(2) Marketing, gathering, and transportation
costs exceeded sales price for the production
period.
|
|
(3) Commencing with the distribution to
unitholders payable in first quarter 2019, the Trustee began
withholding the greater of $70,000 or 3.5% of the funds otherwise
available for distribution each quarter to gradually increase
existing cash reserves by a total of approximately $850,000. The
Trustee may increase or decrease the targeted amount at any time,
and may increase or decrease the rate at which it is withholding
funds to build the cash reserve at any time, without advance notice
to the unitholders. Cash held in reserve will be invested as
required by the trust agreement. Any cash reserved in excess of the
amount necessary to pay or provide for the payment of future known,
anticipated or contingent expenses or liabilities eventually will
be distributed to unitholders, together with interest earned on the
funds.
|
|
(4) Based on
46,750,000 common units issued and outstanding.
|
Due to the timing of the payment of production proceeds to the
Trust, quarterly distributions generally include royalties
attributable to sales of oil, natural gas liquids and natural gas
for three months, including the first two months of the quarter
just ended and the last month of the prior quarter.
The Trust was formed by Chesapeake in June 2011 and owns royalty interests in certain
oil and natural gas properties in the Colony Granite Wash play in
Washita County, Oklahoma. The
Trust is entitled to receive proceeds from the sale of production
attributable to the royalty interests. As described in the Trust's
filings with the Securities and Exchange Commission (the "SEC"),
the amount of Trust revenues and the quarterly distributions to
Trust unitholders will fluctuate from quarter to quarter, depending
on the sales volume of oil, natural gas liquids and natural gas
attributable to the Trust's royalty interests and the prices
received for such sales and the amount of the Trust's
administrative expenses, among other factors.
For additional information regarding the Trust and its results
of operations and financial condition, please refer to the Trust's
SEC filings.
ABOUT CHESAPEAKE GRANITE WASH TRUST:
Chesapeake Granite Wash Trust (OTC Pink:CHKR) is a
Delaware statutory trust formed by
Chesapeake to own certain royalty interests in oil, natural gas
liquids and natural gas wells in Washita
County, Oklahoma producing from the Colony Granite Wash play
within the broader Granite Wash formation of the Anadarko Basin. The common units do not
represent interests in and are not obligations of Chesapeake.
Further information is available at www.chkgranitewashtrust.com
where the Trust routinely posts announcements, updates, investor
information and news releases.
Pursuant to IRC Section 1446, withholding tax on income
effectively connected to a U.S. trade or business allocated to
foreign partners should be made at the highest marginal rate. Under
Section 1441, withholding tax on fixed, determinable, annual,
periodic income from U.S. sources allocated to foreign partners
should be made at 30% of gross income unless the rate is reduced by
treaty. This release is intended to be a qualified notice to
nominees and brokers as provided for under Treasury Regulation
Section 1.1446-4(b) by the Trust, and while specific relief is not
specified for Section 1441 income, this disclosure is intended to
suffice. For distributions made to foreign partners, nominees and
brokers should withhold at the highest effective tax
rate.
This news release contains statements that are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements
contained in this news release, other than statements of historical
facts, are "forward-looking statements" for purposes of these
provisions. The anticipated distribution discussed herein is based,
in part, on the amount of cash received or expected to be received
by the Trust from Chesapeake 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 the
COVID-19 pandemic and related economic turmoil, expenses of the
Trust and reserves for anticipated future expenses. Neither
Chesapeake nor the Trustee intends, and neither assumes any
obligation, to update any of the statements included in this news
release. An investment in common units issued by the Trust is
subject to the risks described in the Trust's Annual Report on Form
10-K for the year ended December 31,
2019, as well as other risks identified in the Trust's
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
filed with the SEC. The Trust's annual, quarterly and other filed
reports are or will be available at the SEC's website at
www.sec.gov. The Trust does not intend, and assumes no obligations,
to update any of the statements included in this news
release.
TRUSTEE CONTACT INFORMATION:
The Bank of New York Mellon Trust Company, N.A.
Monika Rusin
212-815-5787
monika.kozdral@bnymellon.com
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SOURCE Chesapeake Granite Wash Trust