Whiting USA Trust II Announces Trust Quarterly Distribution
August 07 2014 - 4:12PM
Business Wire
Whiting USA Trust II (NYSE: WHZ) announced the third Trust
distribution in 2014, which relates to net profits generated during
the second quarterly payment period of 2014.
Unitholders of record on August 19, 2014 will receive a
distribution of $0.828699 per unit, which is payable on or before
August 29, 2014.
Volumes, average sales prices and net profits for the quarterly
payment period were:
Sales volumes: Oil (Bbl)(1) 299,440 Natural
gas (Mcf) 567,303 Total (BOE) 393,991 Average sales
prices: Oil (per Bbl)(1) $ 90.55 Natural gas (per Mcf)(2) $ 5.67
Gross proceeds:
Oil sales(1) $ 27,112,941 Natural gas sales 3,213,874
Total gross proceeds $ 30,326,815 Costs: Lease operating
expenses $ 10,094,786 Production taxes 1,550,819 Development costs
1,454,152 Cash settlement (gains) losses on commodity
derivatives(3) - Total costs $ 13,099,757
Net profits
$ 17,227,058 Percentage allocable to Trust’s Net Profits Interest
90 %
Total cash available for the Trust
$ 15,504,352 Provision for estimated Trust expenses (250,000 )
Montana state income taxes withheld (6,297 ) Net cash
proceeds available for distribution $ 15,248,055
Trust units outstanding
18,400,000 Cash distribution per Trust unit $
0.828699 (1) Oil includes natural gas liquids.
(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) There
were no realized gains or losses on hedge settlements during the
second quarterly payment period of 2014. All costless collar hedge
contracts terminate as of December 31, 2014. Consequently, for all
distributions after the February 2015 distribution, there will be
no further cash settlement gains or losses 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 (which
amount is equivalent to 10.61 MMBOE attributable to the 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 currently estimated to be December 31, 2021. 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, 2014, on a cumulative accrual basis, 3.89 MMBOE
(37%) 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, 2013, the 11.79 MMBOE of reserves (10.61 MMBOE
to the 90% net profits interest) 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 8.4% between 2014 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. 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.
Whiting USA Trust IIThe Bank of New York Mellon Trust
Company, N.A., as TrusteeMary Jo Davis,
512-236-6545http://WhitingWHZ.investorhq.businesswire.com/
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