Whiting USA Trust II (NYSE:WHZ) announced the second Trust
distribution in 2015, which relates to net profits generated during
the first quarterly payment period of 2015. Unitholders of record
on May 20, 2015 will receive a distribution of $0.012803 per unit,
which is payable on or before June 1, 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 May 20, 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.
Volumes, average sales prices and net profits for the quarterly
payment period were:
Sales volumes: Oil (Bbl)(1) 283,384 Natural gas (Mcf)
509,062 Total (BOE) 368,228 Average sales prices: Oil
(per Bbl)(1) $ 41.33 Natural gas (per Mcf) $ 3.04
Gross proceeds:
Oil sales(1) $ 11,711,387 Natural gas sales 1,549,382
Total gross proceeds $ 13,260,769 Costs: Lease operating
expenses $ 10,422,439 Production taxes 679,890 Development costs
1,563,359 Cash settlements on commodity derivatives(2) -
Total costs $ 12,665,688
Net profits
$ 595,081 Percentage allocable to Trust’s Net Profits Interest
90 %
Total cash available for the Trust
$ 535,573 Provision for estimated Trust expenses (300,000 ) Montana
state income taxes withheld - Net cash proceeds
available for distribution $ 235,573
Trust units outstanding
18,400,000 Cash distribution per Trust unit $
0.012803
(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. Consequently, for all distributions after the
February 2015 distribution, 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 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 March 31, 2015, on a cumulative accrual basis, 4.86 MMBOE
(46%) 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.
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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