DALLAS, Nov. 4, 2010 /PRNewswire-FirstCall/ -- Williams
Coal Seam Gas Royalty Trust (NYSE: WTU) announced today that,
pursuant to the governing trust documents, there will be a cash
distribution to the holders of its units of beneficial interest of
$0.034323 per unit, payable
November 29, 2010 to unitholders of
record on November 15, 2010.
This distribution relates primarily to production from July
and August. As a result of the previously announced sale of
the Trust's net profits interest to Williams Production Company
("WPC") which was effective September
1, all production and revenue will go to WPC from and after
that date.
Prior to the sale of assets to WPC, the Trust owned net profits
interests in certain proved coal seam gas properties previously
owned by 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 2.1 trillion British thermal units (TBtu)
during the period associated with this cash distribution compared
to 4.2 TBtu during the preceding period. Underlying
production was 1.1 TBtu compared to 2.2 TBtu in the preceding
quarter. Infill production was .79 TBtu compared to 1.6 TBtu
in the preceding quarter. Farmout production was .27 TBtu
compared to .46 TBtu in the preceding quarter. Last quarter's
distribution was for the months of March, April, May and the June
estimate. The net contract price per MMBtu for this quarter
was $1.84 as compared to $1.95 per MMBtu for the previous quarter.
WPC also reported approximately 453 infill wells have been
drilled and of those, 442 wells are producing as of August 31, 2010, and are now in "pay" status to
the Trust since early June 2008.
Production attributable to the infill wells for this period
was .79 TBtu. 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 $82,000,000.
On October 28, 2010, Williams Coal
Seam Gas Royalty Trust announced that it had completed a sale of
the assets of the Trust in connection with the termination of the
Trust. As previously announced, the trustee solicited bids
for the Trust's royalty interests in June and requested updated
bids from previous bidders in October to confirm the highest
acceptable offer. Following receipt of updated bids and
determination of the highest acceptable offer, Williams Production
Company, LLC ("WPC") had the right under the Trust Agreement to
acquire the royalty interests at a purchase price of 105% of the
highest acceptable offer. Williams exercised this right and
purchased the royalty interests for a purchase price of
$23,100,000.
The effective date of the sale of the royalty interests is
September 1, 2010. Today,
November 4, the trustee announced the
fourth quarter distribution, which will include only the months of
July and August through the effective date of the sale. The
trustee will announce the date for a closing of the books for the
final distribution, as well as the amount of the final
distribution, which will include the proceeds from the sale, less
any remaining trust expenses once the final distribution amount has
been determined.
Pursuant to the terms of the Trust Agreement, the Trust
terminated effective March 1, 2010
because the reserve report as of December
31, 2009, reflected that, as of such date, the net present
value (discounted at 10 percent) of the estimated future net
revenues 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 was equal to or less
than $30 million thereby triggering a
termination of the Trust.
Following termination, the trustee has continued to act as
trustee of the Trust until all Trust assets are sold and the net
proceeds from such sales distributed to unitholders 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.
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".
Additional information including the Trust's cash distribution
history, current and prior year financial reports, a link to
filings made with the Securities and Exchange Commission and more
can be found on its website at
http://www.wtu-williamscoalseamgastrust.com/.
SOURCE Williams Coal Seam Gas Royalty Trust