Enduro Royalty Trust (NYSE: NDRO) (the “Trust”) today announced
the net profits interest calculation for November 2017. The net
profits interest calculation primarily represents oil production
during August 2017, natural gas production during July 2017, and
costs incurred in September 2017.
As previously disclosed, in early September, four gross (0.45
net) wells were completed in the Haynesville and began producing at
a combined 24-hour gross rate of over 73 MMcf/D. The combined
average first 60-day production from the wells was 55.1 MMcf/D, or
approximately 6.2 MMcf/D net to the 11.4% working interest owned by
Enduro Resource Partners LLC (“Enduro”), the sponsor of the Trust.
This 60-day average is consistent with the first 30-day combined
average from the wells, but Enduro expects the wells to begin
natural production declines typical for the area in the near
future. Due to capital expenditures incurred completing these
Haynesville wells during September 2017, direct operating and
development expenses for the current month net profits interest
calculation exceeded cash receipts and, as a result, no
distribution will be paid to the Trust’s unitholders in December
2017. In the Elm Grove area where the wells were drilled, Enduro
owns a total of 1,737 net acres.
The following table displays underlying oil and natural gas
sales volumes and average prices attributable to the current and
prior month net profits interest calculations.
Underlying Sales Volumes
Average Price Oil Natural Gas
Oil Natural Gas Bbls
Bbls/D Mcf Mcf/D (per
Bbl) (per Mcf) Current Month 60,715 1,959 275,510
8,887 $ 44.26 $ 2.88 Prior Month 60,677 1,957 292,494 9,750
$ 43.60 $ 2.77
As the Haynesville wells began producing in early September 2017
and the natural gas sales volumes reported above primarily
represent sales volumes in July 2017, none of the results from
these wells are included in sales volumes or natural gas receipts.
Enduro anticipates natural gas sales from these new wells to be
included in distributions beginning in early 2018.
The following table displays the net profits interest
calculation for the current month and the resulting shortfall in
net profits:
Gross profits: Oil cash receipts $ 2,687,323
Natural gas cash receipts 792,296 Total
3,479,619
Costs: Direct operating expenses:
Lease operating expenses 2,037,000 Compression, gathering and
transportation 161,000 Production, ad valorem and other taxes
288,000 Development expenses 1,505,000 Total
3,991,000 Net profits shortfall attributable to
underlying properties (511,381 ) Percentage allocable to net
profits interest 80 % Net profits shortfall to Trust from
net profits interest (409,105 ) Net profits shortfall carryforward
from prior month (12,262 ) Cumulative net profits shortfall
to Trust from net profits interest (421,367 )
The cumulative shortfall in net profits will be deducted from
any net profits in next month’s net profits interest calculation.
At this time, Enduro anticipates that capital development expenses
in next month’s distribution calculation will be minimal, totaling
less than $0.1 million.
Oil cash receipts for the properties underlying the Trust
totaled $2.7 million for the current month, a slight increase from
the prior month calculation primarily as a result of an increase in
the realized wellhead price. Natural gas receipts were consistent
with the prior month, totaling $0.8 million, as a result of
offsetting variances between sales volumes and sales prices.
Natural gas sales volumes declined due to payment timing and
natural production variances.
Total direct operating expenses, including lease operating
expenses, production and ad valorem taxes, and gathering and
transportation expenses, totaled $2.5 million, a decrease of $0.2
million from the prior month as a result of decreased lease
operating expenses. Of the total $1.5 million in capital
expenditures during September 2017, approximately $1.1 million
related to the four gross (0.45 net) wells in the Haynesville.
Through September 2017, capital expenditures incurred for the
Haynesville wells has totaled $3.4 million.
About Enduro Royalty Trust
Enduro Royalty Trust is a Delaware statutory trust formed by
Enduro Resource Partners to own a net profits interest representing
the right to receive 80% of the net profits from the sale of oil
and natural gas production from certain of Enduro Resource
Partners’ properties in the states of Texas, Louisiana and New
Mexico. As described in the Trust’s filings with the Securities and
Exchange Commission, the amount of the periodic distributions is
expected to fluctuate, depending on the proceeds received by the
Trust as a result of actual production volumes, oil and gas prices
and the amount and timing of capital expenditures and the Trust’s
administrative expenses, among other factors. Future distributions
are expected to be made on a monthly basis. For additional
information on the Trust, please visit
www.enduroroyaltytrust.com.
Forward-Looking Statements and Cautionary Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All statements contained in this
press release, other than statements of historical facts, are
“forward-looking statements” for purposes of these provisions.
These forward-looking statements include statements regarding
future distribution calculations and expected expenses, including
capital expenditures. Although no distribution will be made in
December 2017, normally the anticipated distribution is based, in
large part, on the amount of cash received or expected to be
received by the Trust from Enduro Resource Partners with respect to
the relevant period. The amount of such cash received or expected
to be received by the Trust (and its ability to pay distributions)
has been and will be significantly and negatively affected by
prevailing low commodity prices, which have declined significantly,
could decline further and could remain low for an extended period
of time. Other important factors that could cause actual results to
differ materially include expenses of the Trust and reserves for
anticipated future expenses. Initial production rates may not be
indicative of future production rates and are not indicative of the
amounts of oil and gas that a well may produce. Statements made in
this press release are qualified by the cautionary statements made
in this press release. Neither Enduro Resource Partners nor the
Trustee intends, and neither assumes any obligation, to update any
of the statements included in this press release. An investment in
units issued by Enduro Royalty Trust is subject to the risks
described in the Trust’s filings with the SEC, including the risks
described in the Trust’s Annual Report on Form 10-K for the year
ended December 31, 2016, filed with the SEC on March 15, 2017. The
Trust’s quarterly and other filed reports are or will be available
over the Internet at the SEC’s website at http://www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20171117005108/en/
Enduro Royalty TrustThe Bank of New York Mellon Trust Company,
N.A., as TrusteeSarah Newell, 1-512-236-6555
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