SandRidge Mississippian Trust I Announces There Will Be No Quarterly Distribution in August 2020
SANDRIDGE MISSISSIPPIAN TRUST I (OTC: SDTTU) today announced that there will be no distribution paid for the three-month period ended June 30, 2020 (which primarily relates to production attributable to the Trust’s interests from March 1, 2020 to May 31, 2020) as costs, charges and expenses attributable to the properties in which the Trust holds royalty interests (the “Underlying Properties”) exceeded the revenue received from the sale of oil, natural gas and other hydrocarbons produced from such properties, as reported by SandRidge Energy, Inc. (”SandRidge”).
During the three-month production period ended May 31, 2020, average oil, natural gas and natural gas liquids (“NGL”) prices decreased significantly compared to the three-month period ended February 29, 2020. Combined sales volumes slightly decreased compared to 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.
As previously disclosed, there is a potential for an early termination of the Trust. Based on SandRidge’s estimates for the next twelve months regarding projected production from the Underlying Properties and estimated pricing based on futures prices as of June 30, 2020 readily available in the public market adjusted for differentials, cash available for distribution for the four consecutive quarters ending September 30, 2020, on a cumulative basis, may fall below $1.0 million, which would require the Trust to commence termination shortly after the quarterly cash distribution is made in November 2020. If that early termination event occurs, the Trustee will be required to sell all of the Trust’s remaining assets and liquidate the Trust.
The Trust owns royalty interests in oil and natural gas properties in the Mississippian formation in Alfalfa, Garfield, Grant 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, natural gas and NGL prices, and the amount and timing of the Trust’s administrative expenses, among other factors. All Trust unitholders share distributions on a pro rata basis.