Whiting USA Trust II Announces Trust Quarterly Distribution
08 February 2013 - 8:51AM
Business Wire
Whiting USA Trust II (NYSE: WHZ) announced the first Trust
distribution in 2013, which relates to net profits generated during
the fourth quarterly payment period of 2012.
Unitholders of record on February 19, 2013 will receive a
distribution amounting to $11,975,068 or $0.650819 per unit, which
is payable on or before March 1, 2013.
Volumes, average sales prices and net profits for the quarterly
payment period were:
Sales volumes: Oil (Bbls) 340,079 Natural gas
(Mcf) 596,479 Total (BOE) 439,492 Average sales
prices: Oil (per Bbl) (1) $ 79.63 Natural gas (per Mcf)(2) $ 4.67
Gross proceeds: Oil sales $ 27,081,047 Natural gas sales
2,787,575 Total gross proceeds $ 29,868,622
Costs: Lease operating expenses(3) $ 12,164,744 Production taxes
1,540,154 Development costs 2,629,576 Total costs $
16,334,474 Net profits $ 13,534,148 Percentage
allocable to Trust’s Net Profits Interest 90 % Total
cash available for the Trust $ 12,180,733 Provision for estimated
Trust expenses (200,000 ) Montana state income taxes withheld
(5,665 ) Net cash proceeds available for distribution $
11,975,068 Trust units outstanding 18,400,000
Cash distribution per Trust unit $ 0.650819 (1)
The price of crude oil realized by the Trust’s underlying
properties during the last nine months of 2012 has been lower than
was anticipated at the time of the Trust’s initial public offering
in March 2012. (2) The average sales price of natural gas
for the gas production months within the distribution period
exceeded the average NYMEX gas prices for those same months within
the period due to the “liquids rich” content of a portion of the
natural gas volumes produced by the underlying properties.
(3) The Trust’s underlying properties experienced increases in
lease operating expenses during 2012 related to a higher level of
workover activity, increased ad valorem taxes and increases in the
cost of oil field goods and services associated with higher demand
in the industry.
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 properties located primarily
in the Rocky Mountains, Permian Basin, Gulf Coast and Mid-Continent
regions of the United States. The net profits interest will
terminate on the later to occur of (1) December 31, 2021, or (2)
the time when 11.79 MMBOE have been produced from the underlying
properties and sold (which amount is equivalent to 10.61 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 of December 31, 2012, on a cumulative accrual basis, 1.7
MMBOE (16%) of the Trust’s total 10.61 MMBOE have been produced and
sold. Based on the Trust’s reserve report for the underlying
properties as of December 31, 2012, the 11.79 MMBOE of reserves
(10.61 MMBOE to the 90% net profits interest) are projected to be
produced from the underlying properties by December 31, 2021, which
reflects an expected year over year decline rate of approximately
9.0% between 2013 and 2021, assuming no additional development
drilling or other development expenditures are made on the
underlying properties after 2014. However, 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, or if expected future development is
delayed, reduced or cancelled.
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,
production and development of oil and gas properties, and future
production and development 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.
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