News Column

Enduro Royalty Trust Updates on 2014 Capital Program

January 30, 2014

Enduro Royalty Trust announced its 2014 capital program, including development opportunities in the Wolfcamp play of west Texas , and reported its monthly cash distribution to be paid in February 2014 . In a release on Jan. 21 , the Company said that in December 2013 , Enduro Resource Partners , the sponsor of the Trust, received drilling proposals from Pioneer Natural Resources for three gross (0.8 net) wells in the Wolfcamp play in the Midland Basin . The wells have been drilled and the completions are scheduled in late January. The wells are anticipated to begin production in February 2014 . Enduro has informed the Trust that total capital expenditures included in 2014 distributions are expected to range from $27 to $30 million attributable to the properties in which the Trust owns an interest, or $22 to $24 million net to the Trust's 80 percent net profits interest. The 2014 capital program is expected to be focused on Wolfcamp Permian Basin oil projects in the Midland Basin , with $18 million of the capital program expected to be allocated to drilling projects operated by Pioneer in Reagan County and Irion County, Texas . The remaining $9 to $11 million of capital is anticipated to be spent on workover and development opportunities across several Permian Basin and north Louisiana properties. The increase in expected capital during 2014 is based on additional information obtained by Enduro from the operator of the Wolfcamp projects. During periods included in 2014 distributions, Enduro will participate in several wells drilled by Pioneer in the Wolfcamp play in the Midland Basin . Development began in the fourth quarter of 2013 and through 2014, Enduro anticipates 25 locations to be drilled on the properties in which the Trust has an interest, where Enduro owns working interests ranging from 6.25 percent to 25 percent. Enduro estimates that the projects in the Wolfcamp will provide internal rates of return of approximately of 50 percent at $90 per Bbl crude oil and $4 per Mcf natural gas prices. Capital costs per well are expected to be $7.2 million gross. A cash distribution of $0.117935 per unit will be paid on Feb. 14 , to the Trust's unitholders of record on Jan. 31 . The distribution primarily represents oil production during the month of October 2013 and natural gas production during September 2013 . Capital expenditures for the properties underlying the Trust during the period were approximately $1.8 million , which relates to expenses incurred during November 2013 . Capital costs of $1.1 million related to the 3 Wolfcamp wells spud in 2013 are included in the current month's distribution. Proceeds from the settlement of hedge contracts for the properties underlying the Trust were approximately $0.6 million , which primarily related to settlements of November 2013 natural gas hedges. ((Comments on this story may be sent to newsdesk@closeupmedia.com ))


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