SandRidge Mississippian Trust I Announces Quarterly Distribution

  SandRidge Mississippian Trust I Announces Quarterly Distribution

Business Wire

AUSTIN, Texas -- October 24, 2013

SANDRIDGE MISSISSIPPIAN TRUST I (NYSE: SDT) today announced a quarterly
distribution for the three-month period ended September 30, 2013 (which
primarily relates to production attributable to the Trust’s interests from
June 1, 2013 through August 31, 2013) of $12.7 million, or $0.6029 per Common
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 November 29, 2013 to holders of record as of the close of business on
November 14, 2013.

During the three-month production period ended August 31, 2013, total sales
volumes were lower than initial Trust estimates. This was due to lower oil
volumes but was partially offset by higher natural gas production during the
period. The decline in production from the previous period was mainly driven
by the completion of the drilling obligation which occurred in the previous
period. As no additional development wells will be drilled, the Trust’s
production is expected to decline each quarter during the remainder of its
life. Although the gas production came in higher than projected, the
additional production was offset by lower realized gas prices than initial
estimates. The combination of lower oil production and lower realized gas
prices resulted in quarterly income available for distribution below the
amount needed to distribute the Subordination Threshold to the Common Units.
As a result, the Subordinated Units will not receive a distribution.

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 Mississippian formation in Alfalfa, Garfield, Grant, Major
and Woods counties in Oklahoma 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. Because the Trust’s
quarterly income available for distribution to the Common Units was $0.6029
per Common Unit, which was below the Subordination Threshold of $0.6128 per
Common Unit for the quarter, no quarterly distribution will be paid to the
Subordinated Units.

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

     Sales Volumes                                                
      Oil (MBbl) (1)                                                    102
      Gas (MMcf)                                                        1,162
      Combined (MBoe)                                                   296
      Average Price
      Oil (per Bbl) (1)                                               $ 92.21
      Gas (per Mcf)                                                   $ 4.04
      Average Price - including impact of derivative settlements
      and post-production expenses
      Oil (per Bbl) (1)                                               $ 91.79
      Gas (per Mcf)                                                   $ 3.54
      Revenues
      Royalty income                                                  $ 14,115
      Derivative settlements                                            16
      Expenses                                                         1,471
      Distributable income available to unitholders                   $ 12,660
      Distributable income per Common Unit (21,000,000 units          $ 0.6029
      issued and outstanding)
      Distributable income per Subordinated Unit (7,000,000 units     $ 0.0000
      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 drilled, or caused
to be drilled, 124 development wells within an area of mutual interest between
January 1, 2011 and June 2013. Pursuant to a development agreement with the
Trust, SandRidge was obligated to drill the development wells, determined by
reference to SandRidge’s net revenue interest in a well and the perforated
length of the well, by December31, 2015.

On June 30, 2014, which is the end of the fourth full calendar quarter
following SandRidge’s satisfaction of its drilling obligation with respect to
the Trust Development Wells, the Subordinated Units will automatically convert
into Common Units, distributions made to Common Units in respect of subsequent
periods 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 Mississippian Trust I 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 Mississippian Trust I 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 Mississippian Trust I
The Bank of New York Mellon Trust Company, N.A., as Trustee
Sarah Newell, 1-512-236-6531
 
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