Eastern American Natural Gas Trust Announces Developments in Sale of Royalty
AUSTIN, Texas -- November 05, 2012
EASTERN AMERICAN NATURAL GAS TRUST (NYSE: NGT) announced today that the
sponsor of the Trust, Energy Corporation of America (“ECA”) has today
exercised its right of first refusal to acquire the Trust’s Royalty NPI.
Consequently, the Purchase and Sale Agreement dated October 24, 2012 between
the Trust, as seller, and Softvest, LP, as buyer (the “Softvest Agreement”),
has terminated in accordance with its terms. In lieu of selling the Royalty
NPI to Softvest, the Trust will sell the Royalty NPI to ECA for the purchase
price determined by the Softvest Agreement which, based on the closing price
of the NYMEX December 2012 contract on November 2, 2012, is $5,917,264. The
sale is expected to close in January 2013. Net proceeds of the sale, after
payment of expenses of the sale and any other expenses of the Trust, and
subject to any reserves the Trustee may establish in connection with the
termination of the Trust, are expected to be distributed as part of the final
distribution from the Trust to unitholders of record as of the record date for
the quarterly period ending March 31, 2013.
Pursuant to the Softvest Agreement, Softvest had the right to a reduction of
the purchase price in the event of defects in title to the Royalty NPI.
However, in connection with its exercise of its right of first refusal, ECA
noted that it will not require any review of the status of title to the
Royalty NPI. Consequently, the Trust does not anticipate any reduction of the
price for title issues.
Although not required by the terms of the Softvest Agreement or by ECA’s right
of first refusal, ECA also agreed to reimburse the Trust, for the benefit of
the Trust unitholders, for any amounts the Trust may be required to pay to
Softvest as reimbursement of Softvest’s expenses pursuant to Section 8.2 of
the Softvest Agreement.
The Trustee expects that a sale of the NPI to ECA rather than to a third party
purchaser may reduce the Trust’s expenses relating to the sale (other than the
previously-disclosed fee payable to EnergyNet.com, Inc., which is expected to
be $158,345) and may reduce the amount of any reserves the Trustee may
establish in connection with the termination of the Trust.
Eastern American Natural Gas Trust is a grantor trust, which holds net profit
interests in approximately 600 producing gas wells located in West Virginia
and Pennsylvania. The Trust will terminate and be liquidated in 2013.
This press release may contain statements that are “forward-looking
statements” within the meaning of Section27A of the Securities Act of 1933,
as amended, and Section21E 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. An investment in Units issued by Eastern American Natural Gas
Trust is subject to the risks described in the Trust’s Annual Report on
Form10-K for the year ended December31, 2011, 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
Eastern American Natural Gas Trust
The Bank of New York Mellon Trust Company, N.A., as Trustee
Mike Ulrich, 1-800-852-1422
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