On August 14, 2017, Enduro Royalty Trust issued the following statement to its unitholders.
Leading Independent Proxy Advisory Firm ISS Recommends Enduro
Royalty Trust Unitholders Vote FOR all Proposals
Dear Unitholder:
On August 30, 2017, Enduro Royalty Trust (NYSE: NDRO) (the Trust) will hold a Special Mee
ti
ng of unitholders to consider five proposals to approve the sale of certain oil and natural gas proper
ti
es (the Dives
ti
ture Proper
ti
es) that cons
ti
tute a por
ti
on of the proper
ti
es burdened by the Trusts 80% net profits interest (the Underlying Proper
ti
es), the release of the net profits interest with respect to the Dives
ti
ture Proper
ti
es, and related proposals to effect the proposed transac
ti
ons.
On August 9, 2017, Ins
ti
tu
ti
onal Shareholder Services (ISS) recommended that Enduro unitholders vote
FOR
all proposals at the Special Mee
ti
ng. ISS is one of the leading independent proxy advisory firms in the country and its recommenda
ti
ons are relied upon by many major ins
ti
tu
ti
onal investment firms, mutual funds and fiduciaries throughout the world.
In its report, ISS commented that the proxy statement contained the following compelling ra
ti
onales for unitholders to approve the proposals:
·
The Dives
ti
ture Proper
ti
es contributed only 1.2% to the distribu
ti
ons paid to unitholders in 2016, $0.003 of the total $0.26 per unit.
·
The Dives
ti
ture Proper
ti
es comprise a small amount of 2016 proved reserves at 2.5% of all Underlying Proper
ti
es.
·
Future development of the Dives
ti
ture Proper
ti
es would require significant investment of capital in which unitholders would indirectly incur 80% of any associated costs.
·
A thorough sale process was run and the total sales price is above the mid-point of valua
ti
on ranges provided by two independent par
ti
es.
The es
ti
mated special distribu
ti
on to unitholders upon approval and consumma
ti
on of
the proposed transac
ti
ons is an
ti
cipated to be $1.18 per unit.
The Transactions & Anticipated Distribution*
|
|
|
|
Total sales price of Dives
ti
ture Proper
ti
es
|
$50.4 million
(1)
|
|
|
Es
ti
mated 80% net proceeds to unitholders (less certain expenses & holdbacks)
|
$38.8 million
(2)
|
|
|
An
ti
cipated distribu
ti
on per Trust unit (33 million Trust units outstanding)
|
$1.18/unit
|
(1)
Subject to ordinary closing adjustments and retained holdback amount to cover possible indemnifica
ti
on obliga
ti
ons under the purchase and sale agreements.
|
(2
Includes es
ti
mated expenses to be incurred rela
ti
ng to the transac
ti
ons.
|
*Please be aware that the es
ti
mates in the table above are preliminary and subject to change based on numerous factors, most of which are beyond the control of the Trust and Enduro Resource Partners LLC . The amount of proceeds distributed from the sales could vary materially.
|
***
THE TRANSACTIONS WILL NOT BE IMPLEMENTED UNLESS PROPOSALS 1, 2 AND 3 ARE APPROVED BY AT LEAST 75% OF ALL OUTSTANDING UNITS. NOT VOTING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSALS.
***
PLEASE VOTE TODAYYOUR VOTE IS IMPORTANT!
Whether or not you a
tt
end the Special Mee
ti
ng, we urge you to submit your vote promptly once you have reviewed the final proxy statement. If you have any ques
ti
ons or require any assistance with respect to vo
ti
ng your units, please contact Morrow Sodali, the Trusts proxy solicitor, at the phone number or email listed below:
Call Toll Free: (800) 662-5200
Email: NDRO.info@morrowsodali.com
The proxy statement filed with the Securi
ti
es and Exchange Commission provides you with detailed informa
ti
on about the proposals and related ma
tt
ers. You are encouraged to carefully read the en
ti
re proxy statement and other relevant documents filed or to be filed by the Trust with the Securi
ti
es and Exchange Commission in their en
ti
rety.