PACIFIC COAST OIL TRUST (NYSE:ROYT) (the “Trust”), a royalty trust
formed by Pacific Coast Energy Company LP (“PCEC”), announced today a
cash distribution to the holders of its units of beneficial interest of
$0.04097 per unit, payable on December 24, 2018 to unitholders of record
on December 10, 2018. The Trust’s distribution calculation relates to
net profits and overriding royalties generated during October 2018 as
provided in the conveyance of net profits and overriding royalty
interest. All information in this press release has been provided to the
Trustee by PCEC.
The current month’s calculation for the Developed Properties resulted in
$2.0 million of revenues less direct operating expenses and development
costs. The current month’s revenues were $5.1 million, lease operating
expenses including property taxes were $2.6 million and capital
expenditures were $0.4 million. Average realized prices for the
Developed Properties were $75.08 per Boe in October, as compared to
$72.86 per Boe in September. Net profits for the month of October for
the Developed Properties were $1.6 million.
The current month’s calculation included approximately $89,000 for the
7.5% overriding royalty interest on the Remaining Properties from Orcutt
Diatomite and Orcutt Field. Average realized prices for the Remaining
Properties were $71.79 per Boe in October, as compared to $69.54 per Boe
in September. The cumulative net profits deficit for the Remaining
Properties, including the 7.5% overriding royalty interest payments,
decreased by approximately $16,000 and now totals $1.5 million as of
October 2018.
The net cash flow available for distribution to the holders of units of
beneficial interest is approximately $1.6 million. The proceeds expected
to be received by the Trust in December of $1.7 million consist of $1.6
million in income from the Developed Properties and approximately
$89,000 in income from the 7.5% overriding royalty interest on the
Remaining Properties. The proceeds to be received by the Trust will be
partially offset by $91,000 for the monthly operating and services fee
payable to PCEC and approximately $45,000 in Trust general and
administrative expenses, resulting in the net cash flow available for
distribution of approximately $1.6 million.
The Trustee periodically engages an independent oil and gas consulting
firm to perform a detailed review of the computation of the amounts paid
to the Trust. The consulting firm has concluded its review of payments
relating to the Trust Year 2016, the Trustee and PCEC have concluded
their reviews and discussions of the findings, and the resulting
adjustments have been included in the current month’s calculation. The
adjustments increased the amount payable to the Trust from the Developed
Properties by approximately $54,000 and decreased the cumulative net
profits deficit from the Remaining Properties by approximately $2,000.
Sales Volumes and Prices
The following table displays PCEC’s underlying sales volumes and average
prices for the month of October 2018:
|
|
|
|
|
|
|
Underlying Properties
|
|
|
|
Sales Volumes
|
|
|
Average Price
|
|
|
|
(Boe)
|
|
|
(Boe/day)
|
|
|
(per Boe)
|
Developed Properties (a)
|
|
|
67,860
|
|
|
2,189
|
|
|
$75.08
|
Remaining Properties (b)
|
|
|
17,315
|
|
|
559
|
|
|
$71.79
|
|
|
|
|
|
|
|
|
|
|
(a) Crude oil sales represented 98% of sales volumes
|
(b) Crude oil sales represented 100% of sales volumes
|
|
2018 Operating and Financial Sensitivity Analysis
Year-to-date 2018 (through the October 2018 production month) Developed
Properties production has been approximately 270 boe/d under the 2018
guidance range provided in February 2018, primarily due to
lower-than-expected performance from the Los Angeles Basin. West Pico
production has been approximately 150 boe/d below expected levels due to
gas export restrictions and significant shut-in wells requiring
workovers (as disclosed in the Trust’s previous filings with the
Securities and Exchange Commission (the “SEC”)). West Pico production
has improved since October and is expected to approach the levels
generally experienced prior to the gas export shutdown. East Coyote and
Sawtelle production has been approximately 45 boe/d below expected
levels due to the temporary shutdown of wells from sanding and well
failures as well as injection constraints at both fields (as disclosed
in the Trust’s previous filings with the SEC). The remaining shortfall
of approximately 75 boe/d is due to lower-than-expected production from
Orcutt Diatomite cyclic steam operations, partially offset by
higher-than-expected production from Orcutt Conventional. PCEC expects
to provide guidance for 2019 early next year.
Overview of Trust Structure
Pacific Coast Oil Trust is a Delaware statutory trust formed by PCEC to
own interests in certain oil and gas properties in the Santa Maria Basin
and the Los Angeles Basin in California (the “Underlying Properties”).
The Underlying Properties and the Trust’s net profits and royalty
interests are described in the Trust’s filings with the SEC. As
described in the Trust’s filings with the SEC, the amount of any
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, development expenses, and the amount and timing of
the Trust’s administrative expenses, among other factors. For additional
information on the Trust, please visit www.pacificcoastoiltrust.com.
Cautionary Statement Regarding Forward-Looking
Information
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 PCEC’s estimates regarding its 2018 capital program
and the amount and date of any anticipated distribution to unitholders.
Any anticipated distribution is based, in part, on the amount of cash
received or expected to be received by the Trust from PCEC with respect
to the relevant period. Any differences in actual cash receipts by the
Trust could affect this distributable amount. 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. Statements made in this press release
are qualified by the cautionary statements made in this press release.
Neither PCEC 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 Pacific Coast Oil Trust is
subject to the risks described in the Trust's Annual Report on Form 10-K
for the year ended December 31, 2017 filed with the SEC on March 9,
2018, and if applicable, the Trust’s subsequent Quarterly Reports on
Form 10-Q. The Trust's Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q are available over the Internet at the SEC's website at http://www.sec.gov.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181130005507/en/
Copyright Business Wire 2018