SandRidge Mississippian Trust I Announces Quarterly Distribution
Thu April 25, 2013 4:15 PM
AUSTIN, Texas--(BUSINESS WIRE)-- SANDRIDGE MISSISSIPPIAN TRUST I (SDT) today announced a quarterly distribution for the three-month period ended March 31, 2013 (which primarily relates to production attributable to the Trusts interests from December 1, 2012 through February 28, 2013) of $15.9 million, or $0.5904 per Common Unit and $0.5015 per Subordinated Unit. The Trust makes distributions on a quarterly basis approximately 60 days after the end of each quarter. The distribution is expected to occur on or before May 30, 2013 to holders of record as of the close of business on May 15, 2013.
During the three-month production period ended February 28, 2013, total sales volumes were higher than initial Trust estimates. This was due to higher natural gas volumes but was partially offset by lower oil production during the period. Although the gas production came in higher than projected, the additional production was offset by lower realized gas prices than initial estimates. The combination of lower oil production and lower realized gas prices resulted in quarterly income available for distribution of $0.5682 per unit, which is $0.0222 below the subordination threshold. As a result, the distribution per common unit is the subordination threshold of $0.5904 for the period.
The Trust owns royalty interests created from interests held by SandRidge Energy, Inc. (SandRidge) and its subsidiaries in oil and natural gas properties in the Mississippian formation in Alfalfa, Garfield, Grant, Major and Woods counties in Oklahoma and is entitled to receive proceeds from the sale of production attributable to the royalty interests. As described in the Trusts filings with the Securities and Exchange Commission (the SEC), the amount of the quarterly distributions is expected to fluctuate from quarter to quarter, depending on the proceeds received by the Trust as a result of actual production volumes, oil and natural gas prices and the amount and timing of the Trusts administrative expenses, among other factors. Although there is no assurance of any minimum distribution in any quarterly period, during the subordination period (as described in the Trusts filings), holders of Common Units will be entitled to receive an amount up to the Subordination Threshold (which varies from quarter to quarter) prior to any distribution being made for that quarter in respect of the Subordinated Units, all of which are held by SandRidge. If the amount available for distribution in any quarterly period is sufficient to distribute an amount equal to the Subordination Threshold to the holders of all units (including the Subordinated Units), any additional balance is distributed to holders of all units pro rata, up to the amount of the Incentive Threshold for the quarter. Trust units are entitled to receive 50% of any cash available for distribution in excess of the Incentive Threshold for the quarter. The Trusts quarterly income available for distribution to all Trust units was $0.5682 per unit, which was below the Subordination Threshold for the Common Units of $0.5904 per unit for the quarter. As a result, the distribution to the Subordinated Units was decreased to $0.5015 per unit in order to permit a distribution per Common Unit equal to the Subordination Threshold for the quarter.
