Whiting USA Trust II (NYSE: WHZ) announced the third Trust
distribution in 2015, which relates to net profits generated during
the second quarterly payment period of 2015. Unitholders of record
on August 19, 2015 will receive a distribution of $0.158632 per
unit, which is payable on or before August 31, 2015.
As of the date of this press release, 99.9% of the Trust’s total
18,400,000 units outstanding were held by Cede & Co., which is
The Depository Trust Corporation’s nominee, as the official
unitholder of record. Therefore, the August 19, 2015 record date as
it relates to this distribution is only applicable to unitholders
of record such as Cede & Co., and the ex-date, as set by the
New York Stock Exchange, actually determines which street name
holders will be eligible to receive the distribution.
Sales volumes, net profits and selected performance metrics for
the quarterly payment period were:
Sales volumes: Oil (Bbl)(1) 275,042 Natural
gas (Mcf) 476,437 Total (BOE) 354,448
Gross proceeds:
Oil sales(1) $ 13,681,294 Natural gas sales 1,249,638
Total gross proceeds $ 14,930,932 Costs: Lease operating
expenses $ 9,293,985 Production taxes 774,972 Development costs
1,337,668 Cash settlements on commodity derivatives(2) -
Total costs $ 11,406,625
Net profits
$ 3,524,307 Percentage allocable to Trust’s Net Profits Interest
90 %
Total cash available for the Trust
$ 3,171,876 Provision for estimated Trust expenses (250,000 )
Montana state income taxes withheld (3,044 ) Net cash
proceeds available for distribution $ 2,918,832
Trust units outstanding
18,400,000 Cash distribution per Trust unit $
0.158632 Selected performance metrics: Crude oil
average realized price (per Bbl)(1) $ 49.74 Natural gas average
realized price (per Mcf) $ 2.62 Lease operating expenses (per BOE)
$ 26.22 Production tax rate (percent of total gross proceeds) 5.2 %
____________ (1) Oil includes natural gas liquids.
(2) All costless collar hedge contracts terminated as of December
31, 2014 (which hedging effects extended through the quarterly
payment period covered by the February 2015 distribution to
unitholders), and no additional hedges are allowed to be placed on
Trust assets. Therefore, there will be no further cash settlements
on commodity hedges, and the Trust will have increased exposure to
oil and natural gas price volatility.
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 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 (10.61
MMBOE to the 90% net profits interest) have been produced from the
underlying properties and sold, 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 estimated to be December 31,
2021 based on the Trust’s year-end reserve report. 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.
As of June 30, 2015, on a cumulative accrual basis, 5.19 MMBOE
(49%) 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, 2014, the Trust’s 10.61 MMBOE are projected to
be produced from the underlying properties prior to December 31,
2021, and the net profits interest would therefore terminate on
December 31, 2021. Additionally, the year-end reserve report
reflects an expected annualized decline rate of approximately 8.0%
between 2015 and 2021. 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.
Additionally, the estimated time when the market price of the Trust
units should decline to zero is based on the economic rights of the
Trust units. The trading price of the Trust units is affected by
factors outside of the control of the Trust or Whiting, including
actions of market participants, among others. 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, the timing of any such 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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version on businesswire.com: http://www.businesswire.com/news/home/20150806006491/en/
Whiting USA Trust IIThe Bank of New York Mellon Trust
Company, N.A., as TrusteeMike Ulrich,
512-236-6599http://WhitingWHZ.investorhq.businesswire.com/
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