Chesapeake Granite Wash Trust Announces Distribution of $0.6700 Per Common
AUSTIN, Texas -- February 8, 2013
Chesapeake Granite Wash Trust (NYSE:CHKR) (the “Trust”) today announced its
common unit distribution for the quarter ended December 31, 2012 (which
primarily relates to production attributable to the Trust’s royalty interests
from September 1, 2012 through November 30, 2012) will be $0.6700 per common
unit. The Trust will also pay a distribution of $0.3772 per subordinated unit
for the quarter. The distributions will be paid on March 1, 2013 to all common
and subordinated unitholders of record at the close of business on February
During the three-month production period ended November 30, 2012, total sales
volumes and realized oil, natural gas liquids and natural gas prices were
lower than initial Trust estimates. This resulted in quarterly income
available for distribution of $0.5968 per unit, which is $0.0732 below the
subordination threshold. As a result, the distribution per common unit is the
subordination threshold of $0.6700 for the quarter.
The following table provides sales volumes, realized prices and revenue
attributable to the Trust’s royalty interests, expenses of the Trust and
distributable income available to unitholders for the production period from
September 1, 2012 to November 30, 2012.
Oil (mbbl) 151
Natural gas liquids (mbbl) 329
Natural gas (mmcf) 3,060
Total oil equivalent volumes (mboe) 990
Average price received per production unit:^(1)
Oil $ 86.26
Natural gas liquids $ 31.92
Natural gas $ 1.94
Distributable income calculation (in thousands except per unit
Revenue less production taxes^(1) $ 28,875
Derivative settlement loss (609 )
Trust expenses (366 )
Distributable income available to unitholders $ 27,900
Calculated distributable income per unit^(2) $ 0.5968
Distributable income per common unit^(3) $ 0.6700
Distributable income per subordinated unit^(4) $ 0.3772
(1) Includes the effect of certain marketing, gathering and transportation
(2) Based on 46,750,000 units issued and outstanding, consisting of 35,062,500
common units and 11,687,500 subordinated units.
(3) Equal to subordination threshold of $0.6700 per common unit.
(4) All subordinated shares are owned by Chesapeake Energy Corporation.
Due to the timing of the payment of production proceeds to the Trust,
quarterly distributions generally include royalties attributable to sales of
oil, natural gas liquids and natural gas for three months, including the first
two months of the quarter just ended and the last month of the prior quarter.
The Trust was formed by Chesapeake Energy Corporation (NYSE:CHK)
("Chesapeake") in June 2011 and owns royalty interests in certain oil and
natural gas properties in the Colony Granite Wash play in Washita County,
Oklahoma. The Trust is entitled to receive proceeds from the sale of
production attributable to the royalty interests. As described in the Trust’s
filings with the Securities and Exchange Commission (the “SEC”), the amount of
Trust revenues and the quarterly distributions to Trust unitholders will
fluctuate from quarter to quarter, depending on the timing of initial sales
from the development wells drilled by Chesapeake in which the Trust receives
an interest, the sales volume of oil, natural gas liquids and natural gas
attributable to the Trust’s royalty interests and the prices received for such
sales, amounts realized and paid under the Trust’s hedging arrangements and
the amount of the Trust's administrative expenses, among other factors.
Conference Call Information
Chesapeake will host a conference call to discuss the results on Monday,
February 11, 2013 at 10:00 am EST. The telephone number to access the
conference call is 913-312-0669 or toll-free 888-215-7030. The passcode for
the call is 8564032. We encourage those who would like to participate in the
call to place calls between 9:50 and 10:00 am EST.
For those unable to participate in the conference call, a replay will be
available for audio playback at 12:00 pm EST on Monday, February 11, 2013 and
will run through 12:00 pm EST on Monday, February 25, 2013. The number to
access the conference call replay is 719-457-0820 or toll-free 888-203-1112.
The passcode for the replay is 8564032.
The conference call will also be webcast live on the Trust’s website at
www.chkgranitewashtrust.com in the “Investors” section of the website. The
webcast of the conference call will be available on the Trust’s website for
ABOUT CHESAPEAKE GRANITE WASH TRUST:
Chesapeake Granite Wash Trust is a Delaware statutory trust formed by
Chesapeake Energy Corporation to own certain royalty interests in oil, natural
gas liquids and natural gas wells in Washita County, Oklahoma producing from
the Colony Granite Wash play within the broader Granite Wash formation of the
Anadarko Basin. The common units do not represent interests in and are not
obligations of Chesapeake Energy Corporation. The common units are listed on
the New York Stock Exchange under the symbol CHKR. Further information is
available at www.chkgranitewashtrust.com where Chesapeake Granite Wash Trust
routinely posts announcements, updates, investor information and news
Pursuant to IRC Section 1446, withholding tax on income effectively connected
to a U.S. trade or business allocated to foreign partners should be made at
the highest marginal rate. Under Section 1441, withholding tax on fixed,
determinable, annual, periodic income from U.S. sources allocated to foreign
partners should be made at 30% of gross income unless the rate is reduced by
treaty. This release is intended to be a qualified notice to nominees and
brokers as provided for under Treasury Regulation Section 1.1446-4(b) by
Chesapeake Granite Wash Trust, and while specific relief is not specified for
Section 1441 income, this disclosure is intended to suffice. Nominees and
brokers should withhold 35% of the distribution made to foreign partners.
This news 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 news release, other than statements of historical
facts, are "forward-looking statements" for purposes of these provisions.
Although Chesapeake has advised the Trust that Chesapeake 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 anticipated
distribution discussed herein is based, in part, on the amount of cash
received or expected to be received by the Trust from Chesapeake with respect
to the relevant quarterly period. Any differences in actual cash receipts by
the Trust could affect this distributable amount. Other important factors that
could cause actual results to differ materially include expenses of the Trust
and reserves for anticipated future expenses. Neither Chesapeake nor the
Trustee intends, and neither assumes any obligation, to update any of the
statements included in this news release. An investment in common units issued
by Chesapeake Granite Wash Trust is subject to the risks described in the
Trust's Annual Report on Form 10-K for the year ended December 31, 2011, as
well as other risks identified in the Trust’s Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K filed with the SEC. The Trust's annual,
quarterly and other filed reports are or will be available at the SEC's
website at www.sec.gov. The Trust does not intend, and assumes no obligations,
to update any of the statements included in this news release.
Bank of New York Mellon Trust Company, N.A.
Sarah Newell, 855-802-1093
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