SandRidge Permian Trust Announces Quarterly Distribution

  SandRidge Permian Trust Announces Quarterly Distribution

Business Wire

AUSTIN, Texas -- April 25, 2013

SANDRIDGE PERMIAN TRUST (NYSE: PER) today announced a quarterly distribution
for the three-month period ended March 31, 2013 (which primarily relates to
production attributable to the Trust’s interests from December 1, 2012 through
February28, 2013) of $24.8 million, or $0.512 per Common Unit and $0.353 per
Subordinated Unit. The Trust makes distributions on a quarterly basis
approximately 60 days after the end of each quarter. The distribution is
expected to occur on or before May30, 2013 to holders of record as of the
close of business on May15, 2013.

During the three-month production period ended February 28, 2013, the realized
oil price, including the impact of hedges and natural gas liquids, decreased
8% from the previous three-month period which had a material impact on the
distributable income for the period. This was primarily the result of the
differential widening that occurred in the Permian Basin during a majority of
the distribution period. The differential normalized in March. Additionally,
total sales for the period decreased 13% from the previous period. While 59.6
equivalent producing development wells were added during the period, more than
half of these wells were brought on production during February, which limited
their impact during the period. The combination of the differential widening
and later dated completions resulted in quarterly income available for
distribution of $0.472 per unit, which is $0.040 below the subordination
threshold. As a result, the distribution per common unit is the subordination
threshold of $0.512 for the period.

The Trust owns royalty interests created from interests held by SandRidge
Energy, Inc. (“SandRidge”) and its subsidiaries in oil and natural gas
properties in the Central Basin Platform of the Permian Basin in Andrews
County, Texas and 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 the
quarterly distributions is expected to fluctuate from quarter to quarter,
depending on the proceeds received by the Trust as a result of actual
production volumes, oil and natural gas prices and the amount and timing of
the Trust’s administrative expenses, among other factors. Although there is no
assurance of any minimum distribution in any quarterly period, during the
subordination period (as described in the Trust’s filings), holders of Common
Units will be entitled to receive an amount up to the “Subordination
Threshold” (which varies from quarter to quarter) prior to any distribution
being made for that quarter in respect of the Subordinated Units, all of which
are held by SandRidge. If the amount available for distribution in any
quarterly period is sufficient to distribute an amount equal to the
Subordination Threshold to the holders of all units (including the
Subordinated Units), any additional balance is distributed to holders of all
units pro rata, up to the amount of the Incentive Threshold for the quarter.
Trust units are entitled to receive 50% of any cash available for distribution
in excess of the Incentive Threshold for the quarter. The Trust’s quarterly
income available for distribution to all Trust units was $0.472 per unit,
which was below the Subordination Threshold for the Common Units of $0.512 per
unit for the quarter. As a result, the distribution to the Subordinated Units
was decreased to $0.353 per unit in order to permit a distribution per Common
Unit equal to the Subordination Threshold for the quarter.

Volumes, price and distributable income available to unitholders for the
period were (dollars in thousands, except per unit):

Sales Volumes                                                      
Oil (MBbl) (1)                                                          325
Gas (MMcf)                                                              94
Combined (MBoe)                                                         341
Average Price
Oil (per Bbl) (1)                                                     $ 74.13
Gas (per Mcf)                                                         $ 2.85
                                                                      
Average Price - including impact of derivative settlements and
post-production expenses
Oil (per Bbl) (1)                                                     $ 83.28
Gas (per Mcf)                                                         $ 2.53
Revenues
Royalty income                                                        $ 24,384
Derivative settlements                                                  2,975
Expenses                                                               2,572
Distributable income available to unitholders                         $ 24,787
Distributable income per Common Unit (39,375,000 units issued and     $ 0.512
outstanding)
Distributable income per Subordinated Unit (13,125,000 units          $ 0.353
issued and outstanding)

(1)  Includes natural gas liquids.
      

In addition to wells that were producing at the effective date of the
assignment of the royalty interests to the Trust, SandRidge, pursuant to a
development agreement with the Trust, is obligated to drill, or cause to be
drilled, the equivalent of 888 development wells, determined by reference to
SandRidge’s net revenue interest in a well, in an area of mutual interest by
March31, 2016.

During the three-month production period ended February28, 2013, three
drilling rigs were utilized to drill development wells for the Trust.
Currently, three rigs are drilling Trust development wells, and the present
plan is to continue the three rig program through 2013. To date, equivalent
development wells producing, or drilled and perforated for completion, during
production periods upon which distributions are based are as follows:

               Equivalent              Additional
As of        Producing             Drilled             Total Development
               Development Wells       Development           Wells
                                       Wells*
8/31/2011      85.2                    20.7                  105.9
11/30/2011     159.7                   18.8                  178.5
2/29/2012      219.3                   16.2                  235.5
5/31/2012      300.9                   18.3                  319.2
8/31/2012      381.5                   20.2                  401.7
11/30/2012     424.5                   29.5                  454.0
2/28/2013      484.1                   24.2                  508.3

*Equivalent development wells that are not producing at the ‘As of’ date but
have been drilled and perforated for completion.

At the end of the fourth full calendar quarter following SandRidge’s
satisfaction of its drilling obligation with respect to the development wells,
the Subordinated Units will automatically convert into Common Units, after
which time the Common Units will no longer have the protection of the
Subordination Threshold, and all Trust unitholders will share on a pro rata
basis in the Trust’s distributions.

Pursuant to IRC Section 1446, withholding tax on income effectively connected
to a United States 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 United States sources
allocated to foreign partners should be made at 30% of gross income unless the
rate is reduced by treaty. This is intended to be a qualified notice by
SandRidge Permian Trust to nominees and brokers as provided for under Treasury
Regulation Section 1.1446-4(b), and while specific relief is not specified for
Section 1441 income, this disclosure is intended to suffice. Nominees and
brokers should withhold at the highest marginal rate, currently 39.6% for
individuals, on the distribution made to foreign partners.

This press release contains statements that are “forward-looking statements”
within the meaning of 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. These forward-looking statements include the amount and date of
any anticipated distribution to unit holders. The anticipated distribution is
based, in part, on the amount of cash received or expected to be received by
the Trust from SandRidge with respect to the relevant 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.
Statements made in this press release are qualified by the cautionary
statements made in this press release. Neither SandRidge nor the Trustee
intends, and neither assumes any obligation, to update any of the statements
included in this press release. An investment in Common Units issued by
SandRidge Permian Trust is subject to the risks described in the Trust’s
Annual Report on Form 10-K for the year ended December31, 2012, and all of
its other filings with the SEC. The Trust’s quarterly and other filed reports
are or will be available over the Internet at the SEC’s web site at
http://www.sec.gov.

Contact:

SandRidge Permian Trust
The Bank of New York Mellon Trust Company, N.A., as Trustee
Sarah Newell, 1-512-236-6531
 
Press spacebar to pause and continue. Press esc to stop.