LL&E Royalty Trust Announces Jay Field Status Update
09 Febrero 2009 - 3:30PM
Business Wire
On February 5, 2009 LL&E Royalty Trust (NYSE: LRT) received
a letter from Quantum Resources Management LLC addressed to all Jay
Field royalty interest owners stating that Quantum had temporarily
suspended production from the Jay Field on December 22, 2008. The
letter states that Quantum's decision to suspend production
resulted from the dramatic decline in oil prices coupled with high
operating expenses.
The letter from Quantum notes that as operator of the Jay Field,
Quantum is facing three major issues: declining production,
increased costs, and significantly lower oil prices. The letter
also states that Quantum's long term goal for the Jay Field is to
economically produce the maximum amount of reserves, and notes that
when Quantum temporarily suspended production, it maintained the
capability to reestablish production at a future date. Quantum
noted that to produce and sell the oil, it needs a combination of
higher product prices and lower costs, and further noted that it is
analyzing alternative production scenarios that might result in
improved economics. Quantum also informed royalty interest owners
that Quantum is analyzing all options to reduce operational costs
in the Jay Field, and that, if its efforts are successful, Quantum
expects to be able to reestablish production from the field. While
production from the field is temporarily suspended, Quantum will
continue to conduct Unit operations in the Jay Field in accordance
with the Unit Agreement.
During 2006 and 2007 the Trust's net revenues were below the
minimum amounts required by the Trust's governing documents for the
continuation of the Trust. Consequently, in accordance with its
governing documents, the Trust terminated effective December�31,
2007 and will sell its assets. However, as announced by the Trustee
on October 22, 2008, the Trustee has determined that, in light of
current market conditions, it is in the best interests of the
Unitholders to postpone the sale of the Trust's assets. The Trustee
will review market conditions frequently, and intends to recommence
the marketing process as soon as practicable.
This press release contains statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and 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 those relating to
estimates of the length of the postponement of the sale of the
Trust's assets, actions Quantum may take and the effects of those
actions, and all statements regarding the future status and
termination of the Trust. An investment in Units issued by LL&E
Royalty Trust is subject to the risks described in the Trust's
Annual Report on Form 10-K for the year ended December 31, 2007,
and all of its other filings with the Securities and Exchange
Commission. The Trust's annual, quarterly and other filed reports
are available over the Internet at the SEC's web site at
http://www.sec.gov.
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