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8-K - FORM 8-K - TORCH ENERGY ROYALTY TRUST | h84319e8vk.htm |
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE | Contact: | |
AUGUST 19, 2011 | Investor Relations Dept. (800) 536-7453 |
TORCH ENERGY ROYALTY TRUST DECLARES
THIRD QUARTER 2011 CASH DISTRIBUTION
THIRD QUARTER 2011 CASH DISTRIBUTION
HOUSTON Torch Energy Royalty Trust (Trust) (NYSE: TRU) (www.torchroyalty.com) today
announced that there will be a cash distribution of $1,462,000, or 17.00 cents per unit, payable on
September 12, 2011 to unitholders of record on August 31, 2011. A portion of this cash distribution
is attributable to the release of a portion of the Trusts cash reserve account, totaling $964,303
or approximately 11.2 cents per unit. The cash reserve account was established, pursuant to Section
3.07 of the Trust Agreement, for the payment of actual, contingent and uncertain liabilities
associated with the winding up of the Trust. The current quarters cash distribution also includes
the net proceeds attributable to the Trusts net profits interests in the underlying properties
pertaining to production during the quarter ended June 30, 2011 totaling $497,697 or approximately
5.8 cents per unit.
Production attributable to the Trusts net profits interests, excluding the Robinsons Bend field
and infill wells, was 249,496 Mcf of gas and 2,117 Bbls of oil for the second quarter of 2011.
Production attributable to the Trusts net profits interests in the Robinsons Bend field was
346,201 Mcf of gas for the quarter.
The average price attributable to production (excluding the Robinsons Bend field) during the
quarter ended June 30, 2011 was $3.31 per Mcf of gas after deducting gathering fees and $91.63 per
Bbl of oil. Because the Trusts index price for gas exceeded $2.46 per MMBtu during the second
quarter, the working interest owners of the Underlying Properties (Working Interest Owners) were
entitled to deduct 50% of such excess (Sharing Price Adjustment) in calculating the purchase
price for production. The Sharing Price Adjustment for production attributable to the underlying
properties in all four fields (excluding infill wells) during the quarter ended June 30, 2011 was
$0.5 million. Additionally, the Working Interest Owners accrue price credits as a result of its
obligation to purchase gas for the minimum price of $1.99 per MMBtu. The Working Interest Owners
are entitled to recoup such credits in future periods when the Trusts index price exceeds the
minimum price. The Working Interest Owners have no accrued price credits pertaining to gas sales as
of June 30, 2011.
The Trust received no payments from the working interest owner with respect to the Robinsons Bend
field during the quarter ended September 30, 2011 pertaining to production during the quarter ended
June 30, 2011. In calculating the Robinsons Bend field net proceeds pertaining to the quarter
ended June 30, 2011 production, costs and expenses exceeded gross revenues
Page 1 of 2
by approximately
$879,000. The Trust will receive no payments with respect to the Robinsons Bend field until future
proceeds exceed the sum of costs and expenses and the cumulative excess of such costs and expenses,
including interest (Robinsons Bend Field Cumulative Deficit). The Trust does not anticipate that
the Net Proceeds attributable to the Robinsons Bend field, if any, will be significant in the
future. The Robinsons Bend Field Cumulative Deficit pertaining to sales as of June 30, 2011 was
approximately $8.7 million.
About the Trust
The Trusts underlying properties are depleting assets consisting of net profits interests in
proved developed oil and gas properties located in Texas, Alabama and Louisiana. Approximately 99%
of the estimated reserves are gas.
The Trust received the affirmative vote of the unitholders of more than 66 2/3% of the outstanding
units to terminate the Trust at the meeting of unitholders held on January 29, 2008. Upon
termination of the Trust, among other things, the Trustee is required to sell the net profits
interests. No assurances can be given that the Trustee will be able to sell the net profits
interests, or the price that will be distributed to unitholders following such a sale. Such
distributions could be below the market value of the units.
The Trust can give no assurances of the effect of the results of the affirmative vote to terminate
the Trust by the unitholders on the continued listing of the units on the New York Stock Exchange
(NYSE) or any other national quotation system.
Additional information about the Trust can be found in the Trusts filings with the Securities and
Exchange Commission and on the Trusts website, www.torchroyalty.com.
Forward-Looking Statements
This press release includes forward looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934. All
statements other than statements of historical facts in this press release, including without
limitation, statements about future production, production costs and termination of the Trust
(except with respect to the fact that the Trust received the affirmative vote of the unitholders to
terminate the Trust), are forward looking statements. No assurances can be given that these
forward looking statements will prove to be correct. Factors which could cause such forward
looking statements not to be correct include, among others, the cautionary statements set forth in
the Trusts Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities
and Exchange Commission, including but not limited to, the volatility of oil and gas prices, future
production costs, future oil and gas production quantities, operating hazards and environmental
conditions.
Page 2 of 2
TORCH ENERGY ROYALTY TRUST
QUARTER ENDED SEPTEMBER 30, 2011 DISTRIBUTION (1)
QUARTER ENDED SEPTEMBER 30, 2011 DISTRIBUTION (1)
Chalkley, | ||||||||||||
Cotton Valley | ||||||||||||
and | Robinsons | |||||||||||
Austin Chalk | Bend | |||||||||||
Fields | Field (2) | Total | ||||||||||
MCF |
||||||||||||
Chalkley |
131,035 | | ||||||||||
Cotton Valley |
106,182 | | ||||||||||
Austin Chalk |
12,279 | | ||||||||||
Robinsons Bend |
| 346,201 | ||||||||||
249,496 | 346,201 | |||||||||||
BBLS |
||||||||||||
Chalkley |
469 | | ||||||||||
Cotton Valley |
299 | | ||||||||||
Austin Chalk |
1,349 | | ||||||||||
Robinsons Bend |
| | ||||||||||
2,117 | | |||||||||||
Average price |
||||||||||||
Per MCF (after gathering fees) |
$ | 3.31 | $ | 2.82 | ||||||||
Per BBL |
$ | 91.63 | $ | 0.00 | ||||||||
Gas revenues, net of gathering fees |
$ | 826,411 | $ | 977,313 | ||||||||
Oil revenues |
193,974 | | ||||||||||
1,020,385 | 977,313 | |||||||||||
Lease operating expenses |
372,654 | 1,783,415 | ||||||||||
Severance taxes |
71,572 | 63,639 | ||||||||||
444,226 | 1,847,054 | |||||||||||
Net proceeds before capital
expenditures |
576,159 | (869,741 | ) | |||||||||
Capital expenditures |
52,267 | 9,523 | ||||||||||
Net proceeds |
523,892 | (879,264 | ) | |||||||||
Cumulative deficit |
| | ||||||||||
523,892 | (879,264 | ) | ||||||||||
Net profits percentage |
95.00 | % | n/a | |||||||||
Net profits income |
497,697 | | 497,697 | |||||||||
Release of certain cash reserves |
964,303 | |||||||||||
Cash distribution |
$ | 1,462,000 | ||||||||||
Cash distribution per unit |
$ | 0.1700 | ||||||||||
(1) | The quarter ended September 30, 2011 cash distribution pertains to the release of a portion of the Trusts cash reserves and net proceeds received by the Trust for production generated from the underlying properties during the | |
quarter ended June 30, 2011. | ||
(2) | The Robinsons Bend field costs and expenses exceeded revenues during the current quarter by $879,264. The Trust will receive no payments for distributions to unitholders with respect to the Robinsons Bend field until future proceeds exceed the sum of costs and expenses and the cumulative excess of such costs and expenses (Robinsons Bend Field Cumulative Deficit) including interest. The Robinsons Bend Field Cumulative Deficit (including interest) pertaining to sales as of June 30, 2011 was approximately $8.7 million. |