By a News Reporter-Staff News Editor at Energy Weekly News -- SANDRIDGE MISSISSIPPIAN TRUST II (NYSE: SDR) announced a quarterly distribution for the three-month period ended June 30, 2014 (which primarily relates to production attributable to the Trust's interests from March 1, 2014 through May 31, 2014) of $18.1 million, or $0.486 per Common 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 August 29, 2014 to holders of record as of the close of business on August 14, 2014.
During the three-month production period ended May 31, 2014, total sales volumes were lower than initial Trust estimates and lower than the previous period. This was primarily related to well performance. The lower oil production resulted in quarterly income available for distribution of $0.486 per Common Unit, which is below the subordination threshold.
The Trust owns royalty interests in oil and natural gas properties in the Mississippian formation in Alfalfa, Grant, Kay, Noble, and Woods counties in northern Oklahoma and Barber, Comanche, Harper and Sumner counties in southern Kansas 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 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 are 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. Because the Trust's quarterly income available for distribution to the Common Units is below the Subordination Threshold of $0.592 per Common Unit for the quarter, no quarterly distribution will be paid to the Subordinated Units.
Keywords for this news article include: Energy, Oil & Gas, Natural Gas, SandRidge Mississippian Trust II.
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