Enduro Royalty Trust (NYSE: NDRO) (the “Trust”) today announced
a cash distribution to the holders of its units of beneficial
interest of $0.009327 per unit, payable on September 15, 2017 to
unitholders of record on August 31, 2017. The distribution
primarily represents oil production during the month of May 2017
and natural gas production during April 2017.
The following table displays underlying oil and natural gas
sales volumes and average received wellhead prices attributable to
the current and prior month net profits interest calculations.
Underlying Sales Volumes
Average Price Oil Natural Gas
Oil Natural Gas Bbls
Bbls/D Mcf Mcf/D (per
Bbl) (per Mcf) Current Month 59,033 1,904 358,085
11,936 $ 45.11 $ 2.71 Prior Month 59,930 1,998 309,909 9,997
$ 47.45 $ 2.48
Oil cash receipts for the properties underlying the Trust
totaled $2.7 million for the current month, a decrease of $0.2
million from the prior month calculation as a result of a decrease
in the realized wellhead price as well as a decline in production
volumes. The decline in realized prices was driven by a five
percent decline in NYMEX pricing from April to May. Oil sales
volumes declined as a result of payment timing differences.
Natural gas cash receipts increased from $0.8 million in the
prior distribution period to $1.0 million in the current month due
to an increase in natural gas volumes as well as a nine percent
increase in realized wellhead prices. Included in the current month
distribution are payments from a purchaser in the Permian Basin,
representing ten months of natural gas sales for certain wells, for
which payments were previously delayed. Natural gas cash receipts
from these wells totaled approximately $96,000 related to prior
periods, and the associated volumes totaled approximately 46,400
Mcf. Excluding receipts related to prior periods for these wells,
natural gas cash receipts and volumes would have been approximately
$0.9 million and 311,700 Mcf (10,390 Mcf/D), respectively, for the
current distribution period. Further, the average received wellhead
price would have been $2.81 per Mcf, as the majority of these
payments relate to production periods of lower natural gas prices.
Current period realized wellhead price was driven by increases in
futures pricing for April, which is the basis upon which a
significant portion of the East Texas / North Louisiana gas volumes
are sold.
Total direct operating expenses, including lease operating
expenses, production and ad valorem taxes, and gathering and
transportation expenses, increased $0.1 million to $2.5 million.
The increase in direct operating expenses is primarily due to
higher lease operating expenses. Capital expenditures were
approximately $640,000, of which $0.3 million relates to a portion
of capital for 4 gross wells that are currently being drilled in
north Louisiana. Total direct operating expenses and capital
expenditures relate to expenses incurred during June 2017.
Special Unitholder Meeting and ISS Recommendation
As previously announced, the Trust will hold a special meeting
of its unitholders on August 30, 2017 at 10:00 a.m. Central
Daylight Time, at 777 Main Street, Concourse Level Meeting Room,
Fort Worth, Texas to consider and act upon proposals to
approve:
- Eight transactions (the “Transactions”)
pursuant to which (a) Enduro Operating LLC, a Delaware limited
liability company (“Enduro Operating”) will sell its interests in
certain oil and natural gas properties (the “Divestiture
Properties”) that constitute part of the oil and natural gas
properties burdened by the net profits interest held by the Trust,
(b) the Trust will release the related net profits interest
associated with such oil and natural gas properties, and (c) the
net proceeds received by the Trust with respect to each such sale
will be distributed to Trust unitholders;
- Amendments to the Amended and Restated
Trust Agreement of the Trust, dated as of November 3, 2011 (“Trust
Agreement”) to permit the Transactions;
- Amendments to the Conveyance of Net
Profits Interest, executed as of November 8, 2011, from Enduro
Operating to Enduro Texas LLC, a Texas limited liability company
(“Enduro Texas”), as supplemented by that certain Supplement to
Conveyance of Net Profits Interest, executed as of November 8,
2011, among Enduro Operating, Enduro Texas and the Trust to permit
the Transactions;
- Amendments to the Trust Agreement to
permit costs associated with calling any Trust unitholder meeting,
including, without limitation, meeting costs, proxy preparation
costs, proxy solicitation costs and costs of counsel and other
advisors associated therewith, to be paid pro rata by the Trust and
Enduro Resource Partners LLC; and
- An adjournment of the special meeting,
if necessary or appropriate, to permit solicitation of additional
proxies in favor of the above proposals.
On August 9, 2017, Institutional Shareholder Services (“ISS”)
recommended that Trust unitholders vote “FOR” all proposals
at the special meeting. ISS is one of the leading independent proxy
advisory firms in the country and its recommendations are relied
upon by many major institutional investment firms, mutual funds and
fiduciaries throughout the world. In its report, ISS commented that
the proxy statement contained the following compelling rationales
for unitholders to approve the proposals:
- The Divestiture Properties contributed
only 1.2% to the distributions paid to unitholders in 2016 ($0.003
per unit of the total $0.26 per unit paid in 2016);
- The Divestiture Properties comprise a
small amount of 2016 proved reserves (2.5% of the total proved
reserves of the properties in which the Trust holds a net profits
interest);
- Future development of the Divestiture
Properties would require significant investment of capital in which
unitholders would indirectly incur 80% of any associated costs;
and
- A thorough sale process was run and the
total sales price is above the mid-point of valuation ranges
provided by two independent parties.
The estimated special distribution to unitholders upon approval
and consummation of the Transactions is anticipated to be $1.18 per
unit. In order to complete the Transactions, unitholders of record
holding at least 75% of the Trust’s total outstanding units must
vote in favor of the Transactions. For more information, Trust
unitholders are encouraged to review in detail the proxy statement
and other relevant documents filed with the Securities and Exchange
Commission.
Time is of the essence and Trust unitholders are urged to vote
online by following the instructions on their proxy card to ensure
votes are received in a timely manner.
QUESTIONS OR REQUESTS FOR ASSISTANCE
WITH VOTING MAY BE DIRECTED TO THE TRUST’S PROXY SOLICITOR:
MORROW SODALI
Call Toll Free: (800) 662 -
5200 Email: NDRO.info@morrowsodali.com
About Enduro Royalty Trust
Enduro Royalty Trust is a Delaware statutory trust formed by
Enduro Resource Partners to own a net profits interest representing
the right to receive 80% of the net profits from the sale of oil
and natural gas production from certain of Enduro Resource
Partners’ properties in the states of Texas, Louisiana and New
Mexico. As described in the Trust’s filings with the Securities and
Exchange Commission, the amount of the periodic distributions is
expected to fluctuate, depending on the proceeds received by the
Trust as a result of actual production volumes, oil and gas prices,
the amount and timing of capital expenditures, and the Trust’s
administrative expenses, among other factors. Future distributions
are expected to be made on a monthly basis. For additional
information on the Trust, please visit
www.enduroroyaltytrust.com.
Forward-Looking Statements and Cautionary Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All statements contained in this
press release, other than statements of historical facts, are
“forward-looking statements” for purposes of these provisions.
These forward-looking statements include the amount and date of any
anticipated distribution to unitholders and expected expenses,
including capital expenditures. The anticipated distribution is
based, in large part, on the amount of cash received or expected to
be received by the Trust from Enduro Resource Partners with respect
to the relevant period. The amount of such cash received or
expected to be received by the Trust (and its ability to pay
distributions) has been and will be significantly and negatively
affected by prevailing low commodity prices, which have declined
significantly, could decline further and could remain low for an
extended period of time. Other important factors that could cause
actual results to differ materially include Trust unitholder
approval of, or refusal to approve, the Transactions and other
proposals detailed above, expenses of the Trust and reserves for
anticipated future expenses. Statements made in this press release
are qualified by the cautionary statements made in this press
release. Neither Enduro Resource Partners nor the Trustee intends,
and neither assumes any obligation, to update any of the statements
included in this press release. An investment in units issued by
Enduro Royalty Trust is subject to the risks described in the
Trust’s filings with the SEC, including the risks described in the
Trust’s Annual Report on Form 10-K for the year ended December 31,
2016, filed with the SEC on March 15, 2017. The Trust’s quarterly
and other filed reports are or will be available over the Internet
at the SEC’s website at http://www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20170821005082/en/
Enduro Royalty TrustThe Bank of New York Mellon Trust Company,
N.A., as TrusteeSarah Newell, 1-512-236-6555
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