SandRidge Permian Trust Announces Quarterly Distribution

  SandRidge Permian Trust Announces Quarterly Distribution

Business Wire

AUSTIN, Texas -- April 24, 2014

SANDRIDGE PERMIAN TRUST (NYSE: PER) today announced a quarterly distribution
for the three-month period ended March 31, 2014 (which primarily relates to
production attributable to the Trust’s interests from December1, 2013 through
February28, 2014) of $29.9 million, or $0.608 per Common Unit and $0.452 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, 2014 to holders of record as of the
close of business on May 15, 2014.

During the three-month production period ended February 28, 2014, total sales
volumes were lower than initial Trust estimates and lower than the previous
period. During the period, intervals of reduced production due to severe
winter weather conditions negatively impacted the Trust’s results. The lower
oil production resulted in quarterly income available for distribution of
$0.569 per unit, which is below the subordination threshold. As a result, the
distribution per common unit is the subordination threshold of $0.608 for the
period.

The Trust owns royalty interests 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, natural
gas liquids (“NGLs”) 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 Energy, Inc. (“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 $0.569 per
unit, which was below the Subordination Threshold for the Common Units of
$0.608 per unit for the quarter. As a result, the distribution to the
Subordinated Units was decreased to $0.452 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)                                                              319
NGLs (MBbl)                                                             29
Natural Gas (MMcf)                                                      96
Combined (MBoe)                                                         364
Average Price
Oil (per Bbl)                                                         $ 92.80
NGLs (per Bbl)                                                        $ 35.62
Natural Gas (per Mcf)                                                 $ 3.42
Average Price - including impact of derivative settlements and
post-production expenses
Oil (per Bbl)                                                         $ 97.34
NGLs (per Bbl)                                                        $ 35.62
Natural gas (per Mcf)                                                 $ 3.16
Revenues
Royalty income                                                        $ 30,993
Derivative settlements                                                  1,447
Expenses                                                               2,569
                                                                        
Distributable income available to unitholders                         $ 29,871
                                                                        
Distributable income per Common Unit (39,375,000 units issued         $ 0.608
and outstanding)
Distributable income per Subordinated Unit (13,125,000 units          $ 0.452
issued and outstanding)
                                                                        

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.

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            Total
As of            Producing              Drilled               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
5/31/2013        542.8                  20.5                  563.3
8/31/2013        593.5                  24.5                  618.0
11/30/2013       647.0                  21.9                  668.9
2/28/2014        695.7                  25.3                  721.0
                                                              

*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,
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 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, 2013, 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.