MV Oil Trust Announces There Will Be No Trust Second Quarter Distribution
06 Julio 2020 - 3:15PM
Business Wire
MV Oil Trust (NYSE: MVO) announced that there will be no Trust
distribution of net profits for the second quarterly payment period
ended June 30, 2020. The revenue received from the underlying
properties was not sufficient to cover the costs attributable to
the underlying properties during the second quarterly payment
period. The following table shows the underlying data for the Net
Profits Interest for the quarter.
Volumes, average price and net profits for the payment period
were:
Volume (BOE)
148,150
Average price (per BOE)
$
22.24
Gross proceeds
$
3,295,069
Costs
$
3,845,734
Net profits (costs)
$
(550,665
)
Percentage applicable to Trust’s 80%
Net profits interest
$
(440,532
)
MV Partners reserve for future
expenditures
$
440,532
Total cash proceeds available for the
Trust
$
0
Provision for estimated Trust expenses
$
0
Net cash proceeds available for
distribution
$
0
As previously reported, there has been a recent substantial
decrease in oil prices due in part to significantly decreased
demand as a result of the COVID-19 pandemic and an oversupply of
crude oil. Oil prices could remain low for an extended period of
time, which in turn could have a material adverse effect on Trust
distributions. Low oil prices and other factors have reduced net
proceeds to which the Trust is entitled, and there are not
sufficient net proceeds for MV Oil Trust to make a payment for the
scheduled quarterly distribution in July 2020. MV Partners has
applied funds from the reserve for future expenditures to cover the
Trust deficit. The Trust will not receive future distributions
until future gross proceeds exceed quarterly costs and the reserve
account is replenished. The Trustee will use cash reserves from the
provision for estimated Trust expenses provided in the first
quarter distribution to pay current Trust administrative expenses.
If commodity prices for crude oil remain at reduced levels,
subsequent distributions in 2020 will be substantially lower than
historical distributions, and in certain periods there may be no
distribution to unitholders.
This press release contains forward-looking statements. Although
MV Partners, LLC has advised the Trust that MV Partners, LLC
believes that the expectations contained in this press release are
reasonable, no assurances can be given that such expectations will
prove to be correct. The announced distributable amount is based on
the amount of cash received or expected to be received by the
Trustee from the underlying properties on or prior to the record
date with respect to the quarter ended June 30, 2020. Any
differences in actual cash receipts by the Trust could affect this
distributable amount. Other important factors that could cause
these statements to differ materially include the actual results of
drilling operations, risks inherent in drilling and production of
oil and gas properties, the ability of commodity purchasers to make
payment, the effect, impact, potential duration or other
implications of the COVID-19 pandemic, the dispute over production
levels between Russia and the members of the Organization of
Petroleum Exporting Countries, including Saudi Arabia, and other
risk factors described in the Trust’s Annual Report on Form 10-K
for the year ended December 31, 2019 and Quarterly Report on Form
10-Q for the period ended March 31, 2020 filed with the Securities
and Exchange Commission. Statements made in this press release are
qualified by the cautionary statements made in these risk factors.
The Trust does not intend, and assumes no obligations, to update
any of the statements included in this press release.
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version on businesswire.com: https://www.businesswire.com/news/home/20200706005530/en/
MV Oil Trust The Bank of New York Mellon Trust Company, N.A.,
as Trustee Michael Ulrich 512-236-6599 601 Travis
Street, Floor 16, Houston, TX 77002
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