SandRidge Permian Trust Provides Update Regarding Quarterly Distribution - Seite 3

As previously reported in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2019, the World Health Organization characterized the outbreak of a novel strain of the coronavirus (“COVID-19”) as a pandemic, which has resulted in the implementation of a series of public health and emergency measures to combat the spread of COVID-19. These measures have adversely affected general commercial activity, the economies and financial markets of many countries and localities, and global demand for oil and natural gas. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that these developments will have on future periods. The impact of the COVID-19 pandemic on crude oil consumption and the resulting build-up in inventories combined with the announcement by Saudi Arabia and Russia to abandon output restraints has created uncertainty in the oil industry and the free-fall of WTI crude oil future prices since January 2, 2020 (down from $61.18/bbl to $13.78/bbl on April 22, 2020). As a result, Avalon has seen a further deterioration in cash flows from the Underlying Properties. Therefore, Avalon has informed the Trustee that unless oil and gas prices increase substantially, any quarterly payments that Avalon may make to the Trust will unlikely be sufficient to cover the Trust’s administrative expenses, and therefore the likelihood of distributions to the unitholders in the foreseeable future appears to be remote.

Avalon has provided the following information to show Avalon’s calculation of the amount it owes to the Trust for the three-month period ended March 31, 2020 (which primarily relates to production attributable to the Trust’s interests from December 1, 2019 to February 29, 2020). However, as described above, Avalon has informed the Trustee that Avalon is unable to make the payment to the Trust on a timely basis, and is unable to predict when it expects to be able to make the payment. (Dollars in thousands, except average prices and per unit.)

Sales Volumes
Oil (MBbl)			86
Natural Gas Liquids “NGL” (MBbl)			9
Natural Gas (MMcf)