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Enduro Royalty Trust Announces Monthly Cash Distribution and Recommendation from Leading Independent Proxy Advisory Firm ISS that Unitholders Vote "FOR" All Proposals at Special Meeting

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Enduro Royalty Trust (NYSE:NDRO) (the "Trust") today announced a cash
distribution to the holders of its units of beneficial interest of
$0.009327 per unit, payable on September 15, 2017 to unitholders of
record on August 31, 2017. The distribution primarily represents oil
production during the month of May 2017 and natural gas production
during April 2017.

The following table displays underlying oil and natural gas sales
volumes and average received wellhead prices attributable to the current
and prior month net profits interest calculations.

         
Underlying Sales Volumes Average Price
Oil     Natural Gas Oil     Natural Gas
Bbls     Bbls/D Mcf     Mcf/D (per Bbl)   (per Mcf)
Current Month 59,033 1,904 358,085   11,936 $ 45.11 $ 2.71
Prior Month 59,930 1,998 309,909 9,997 $ 47.45 $ 2.48
 

Oil cash receipts for the properties underlying the Trust totaled $2.7
million for the current month, a decrease of $0.2 million from the prior
month calculation as a result of a decrease in the realized wellhead
price as well as a decline in production volumes. The decline in
realized prices was driven by a five percent decline in NYMEX pricing
from April to May. Oil sales volumes declined as a result of payment
timing differences.

Natural gas cash receipts increased from $0.8 million in the prior
distribution period to $1.0 million in the current month due to an
increase in natural gas volumes as well as a nine percent increase in
realized wellhead prices. Included in the current month distribution are
payments from a purchaser in the Permian Basin, representing ten months
of natural gas sales for certain wells, for which payments were
previously delayed. Natural gas cash receipts from these wells totaled
approximately $96,000 related to prior periods, and the associated
volumes totaled approximately 46,400 Mcf. Excluding receipts related to
prior periods for these wells, natural gas cash receipts and volumes
would have been approximately $0.9 million and 311,700 Mcf (10,390
Mcf/D), respectively, for the current distribution period. Further, the
average received wellhead price would have been $2.81 per Mcf, as the
majority of these payments relate to production periods of lower natural
gas prices. Current period realized wellhead price was driven by
increases in futures pricing for April, which is the basis upon which a
significant portion of the East Texas / North Louisiana gas volumes are
sold.

Total direct operating expenses, including lease operating expenses,
production and ad valorem taxes, and gathering and transportation
expenses, increased $0.1 million to $2.5 million. The increase in direct
operating expenses is primarily due to higher lease operating expenses.
Capital expenditures were approximately $640,000, of which $0.3 million
relates to a portion of capital for 4 gross wells that are currently
being drilled in north Louisiana. Total direct operating expenses and
capital expenditures relate to expenses incurred during June 2017.

Special Unitholder Meeting and ISS Recommendation

As previously announced, the Trust will hold a special meeting of its
unitholders on August 30, 2017 at 10:00 a.m. Central Daylight Time, at
777 Main Street, Concourse Level Meeting Room, Fort Worth, Texas to
consider and act upon proposals to approve:

  • Eight transactions (the "Transactions") pursuant to which (a) Enduro
    Operating LLC, a Delaware limited liability company ("Enduro
    Operating") will sell its interests in certain oil and natural gas
    properties (the "Divestiture Properties") that constitute part of the
    oil and natural gas properties burdened by the net profits interest
    held by the Trust, (b) the Trust will release the related net profits
    interest associated with such oil and natural gas properties, and (c)
    the net proceeds received by the Trust with respect to each such sale
    will be distributed to Trust unitholders;
  • Amendments to the Amended and Restated Trust Agreement of the Trust,
    dated as of November 3, 2011 ("Trust Agreement") to permit the
    Transactions;
  • Amendments to the Conveyance of Net Profits Interest, executed as of
    November 8, 2011, from Enduro Operating to Enduro Texas LLC, a Texas
    limited liability company ("Enduro Texas"), as supplemented by that
    certain Supplement to Conveyance of Net Profits Interest, executed as
    of November 8, 2011, among Enduro Operating, Enduro Texas and the
    Trust to permit the Transactions;
  • Amendments to the Trust Agreement to permit costs associated with
    calling any Trust unitholder meeting, including, without limitation,
    meeting costs, proxy preparation costs, proxy solicitation costs and
    costs of counsel and other advisors associated therewith, to be paid
    pro rata by the Trust and Enduro Resource Partners LLC; and
  • An adjournment of the special meeting, if necessary or appropriate, to
    permit solicitation of additional proxies in favor of the above
    proposals.

On August 9, 2017, Institutional Shareholder Services ("ISS")
recommended that Trust unitholders vote "FOR" all proposals at
the special meeting. ISS is one of the leading independent proxy
advisory firms in the country and its recommendations are relied upon by
many major institutional investment firms, mutual funds and fiduciaries
throughout the world. In its report, ISS commented that the proxy
statement contained the following compelling rationales for unitholders
to approve the proposals:

  • The Divestiture Properties contributed only 1.2% to the distributions
    paid to unitholders in 2016 ($0.003 per unit of the total $0.26 per
    unit paid in 2016);
  • The Divestiture Properties comprise a small amount of 2016 proved
    reserves (2.5% of the total proved reserves of the properties in which
    the Trust holds a net profits interest);
  • Future development of the Divestiture Properties would require
    significant investment of capital in which unitholders would
    indirectly incur 80% of any associated costs; and
  • A thorough sale process was run and the total sales price is above the
    mid-point of valuation ranges provided by two independent parties.

The estimated special distribution to unitholders upon approval and
consummation of the Transactions is anticipated to be $1.18 per unit. In
order to complete the Transactions, unitholders of record holding at
least 75% of the Trust's total outstanding units must vote in favor of
the Transactions. For more information, Trust unitholders are encouraged
to review in detail the proxy statement and other relevant documents
filed with the Securities and Exchange Commission.

Time is of the essence and Trust unitholders are urged to vote online by
following the instructions on their proxy card to ensure votes are
received in a timely manner.

 

QUESTIONS OR REQUESTS FOR ASSISTANCE WITH VOTING MAY BE
DIRECTED TO THE TRUST'S PROXY SOLICITOR:

 

MORROW SODALI

 

Call Toll Free: (800) 662 - 5200 Email:
NDRO.info@morrowsodali.com

 

About Enduro Royalty Trust

Enduro Royalty Trust is a Delaware statutory trust formed by Enduro
Resource Partners to own a net profits interest representing the right
to receive 80% of the net profits from the sale of oil and natural gas
production from certain of Enduro Resource Partners' properties in the
states of Texas, Louisiana and New Mexico. As described in the Trust's
filings with the Securities and Exchange Commission, the amount of the
periodic distributions is expected to fluctuate, depending on the
proceeds received by the Trust as a result of actual production volumes,
oil and gas prices, the amount and timing of capital expenditures, and
the Trust's administrative expenses, among other factors. Future
distributions are expected to be made on a monthly basis. For additional
information on the Trust, please visit www.enduroroyaltytrust.com.

Forward-Looking Statements and Cautionary Statements

This press release contains statements that are "forward-looking
statements" within the meaning of Section 21E 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 unitholders and expected expenses, including capital expenditures.
The anticipated distribution is based, in large part, on the amount of
cash received or expected to be received by the Trust from Enduro
Resource Partners with respect to the relevant period. The amount of
such cash received or expected to be received by the Trust (and its
ability to pay distributions) has been and will be significantly and
negatively affected by prevailing low commodity prices, which have
declined significantly, could decline further and could remain low for
an extended period of time. Other important factors that could cause
actual results to differ materially include Trust unitholder approval
of, or refusal to approve, the Transactions and other proposals detailed
above, 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 Enduro
Resource Partners nor the Trustee intends, and neither assumes any
obligation, to update any of the statements included in this press
release. An investment in units issued by Enduro Royalty Trust is
subject to the risks described in the Trust's filings with the SEC,
including the risks described in the Trust's Annual Report on Form 10-K
for the year ended December 31, 2016, filed with the SEC on March 15,
2017. The Trust's quarterly and other filed reports are or will be
available over the Internet at the SEC's website at http://www.sec.gov.

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