Williams Coal Seam Gas Royalty Trust Announces Cash Distribution for First Quarter and Termination Date for the Trust
06 2월 2010 - 7:43AM
PR Newswire (US)
DALLAS, Feb. 5 /PRNewswire-FirstCall/ -- Williams Coal Seam Gas
Royalty Trust (NYSE:WTU) announced today that there will be a cash
distribution to the holders of its units of beneficial interest of
$0.016972 per unit, payable March 1, 2010 to unitholders of record
on February 16, 2010. The Trust owns net profits interests in
certain proved coal seam gas properties owned by Williams
Production Company, LLC (WPC) and located in the San Juan Basin of
northwestern New Mexico (the "Working Interest Properties") and
southwestern Colorado, including WPC's 35 percent net profits
interest in 5,348 gross acres in La Plata County, Colorado (the
"Farmout Properties"). WPC reported that production attributable to
its gross interests in the properties burdened by the Trust's net
profits interests was 6.8 trillion British thermal units (TBtu)
during the period associated with this quarterly cash distribution
compared to 2.6 TBtu during the preceding period. When prior period
adjustments and the infill deficits for the last two quarters are
excluded, production in the current quarter for the original wells
was 3.8 TBtu which includes 1.4 TBtu for infill wells compared to
2.6 TBtu in the preceding quarter which did not include infill
wells because of the infill wells being in a deficit for the second
and third quarter. The net contract price per MMBtu for this
quarter was $1.23 per MMBtu as compared to $0.92 per MMBtu for the
previous quarter. WPC also reported approximately 449 infill wells
have been drilled and of those, 438 wells are producing as of
December 31, 2009, and are now in "pay" status to the Trust since
early June 2008. Production attributable to the infill wells for
this quarter was 1.4 TBtu which does not include 2.91 TBtu
attributable to the second and third quarter when infill wells were
in deficit and no payment was received for them. In accordance with
the original conveyance, the Trust is entitled to only 20% of the
net-profit interests from these wells as opposed to the 60% of the
original producing wells. Net proceeds from the infill wells were
$33,394, which includes the total deficit accumulated through the
third quarter of ($32,419.28). Gross proceeds prior to deductions
for production costs for the fourth quarter of 2009 by property
were as follows: $3,282,974 for Working Interest Properties,
$382,506 for Farmout Properties. For Working Interest Properties,
production costs for the fourth quarter 2009 were as follows:
$1,068,244 for royalties, $352,112 for taxes, and $1,026,484 for
operating costs. Gross proceeds (Net Profit Interest) from the
Farmout Properties after deductions as stated above were $382,506.
Gross proceeds prior to deduction for production costs for the
infill wells was $4,621,248 which includes $2,497,809 for the
deficit quarters. Royalties were $1,642,158 which includes $904,393
for the deficit quarters. Taxes were $486,535 which includes
$254,187 for the deficit quarters. Operating costs were $2,171,046
which includes $1,367,995 for the deficit quarters. Capital costs
were $154,540 which includes $133,330 for the deficit quarters.
Primarily, an increase in the price of natural gas contributed in
net proceeds to the Trust of $764,578 for this quarter compared to
net proceeds to the Trust of $479,091 in the last quarter.
Termination and Liquidation of the Trust Pursuant to the terms of
the Trust Agreement, the Trust will be required to terminate
effective March 1, 2010 because the reserve report as of December
31, 2009, reflects that, as of such date, the net present value
(discounted at 10 percent) of the estimated future net revenues
(calculated in accordance with criteria established by the
Securities and Exchange Commission) for proved reserves
attributable to the royalty interests but using the average monthly
Blanco Hub Spot Price for the past calendar year less certain
gathering costs (the "Termination Present Value" as defined in the
Trust Agreement) is equal to or less than $30 million thereby
triggering a termination of the Trust. Based on a preliminary
report prepared by independent petroleum engineers, the Trust's
computed Terminiation Present Value (discounted at 10 percent) of
the estimated future net revenues for proved reserves calculated in
accordance with the Trust Agreement was approximately $8.2 million.
Following termination, the trustee will continue to act as trustee
of the Trust until all Trust assets are sold and the net proceeds
from such sales distributed to unitholders. The trustee will use
best efforts to sell the Trust's assets in accordance with the
procedures set forth in the Trust Agreement. These procedures are
described in more detail in the Trust's most recent annual report
on Form 10-K and quarterly report on Form 10-Q filed with the
Securities and Exchange Commission. In accordance with the Trust
Agreement, all proceeds of production attributable to the Trust's
royalty interests will be deposited into a separate account
effective as of the March 1, 2010 termination date. If a sale of
the royalty interests is made or a definitive contract for sale of
the royalty interests is entered into within a 150-day period
following the March 1, 2010 termination date, the buyer of the
royalty interests, and not the Trust or the unitholders, will be
entitled to all proceeds of production attributable to the royalty
interests following the termination date. The Trust is withholding
an additional $100,000 for anticipated expenses relating to this
termination process. The Trust is a grantor trust formed by The
Williams Companies, Inc., parent company of WPC, and was designed
to provide unitholders with quarterly cash distributions and tax
credits under Section 29 of the Internal Revenue Code, which has
expired as of 12/31/2002, from certain coal seam gas properties.
The units are listed on The New York Stock Exchange under the
symbol "WTU". For additional information, including the latest
financial reports on Williams Coal Seam Gas Royalty Trust, please
visit our website at http://www.wtu-williamscoalseamgastrust.com/.
DATASOURCE: Williams Coal Seam Gas Royalty Trust CONTACT: Ron E.
Hooper, Senior Vice President of U.S. Trust, Bank of America
Private Wealth Management, Trustee, 1-800-365-6544, for Williams
Coal Seam Gas Royalty Trust Web Site:
http://www.wtu-williamscoalseamgastrust.com/
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