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Sensitivity of Corporate Payout Ratio to Commodity Price and Production
------------------------------------ ------------------------------------ 2013 (Apr - Dec) Average WTI $US 80.00 $US 90.00 $US 100.00----------------------------------------------------------------------------2013 Average Working Interest Production (boe/d) 2,900 144% 140% 133% 3,100 133% 128% 122% 3,300 124% 119% 112%--------------------------------------------------------------------------------------------------------------------------------------------------------
Sensitivity of Basic Payout Ratio to Commodity Price and Production
------------------------------------ ------------------------------------ 2013 (Apr - Dec) Average WTI $US 80.00 $US 90.00 $US 100.00----------------------------------------------------------------------------2013 Average Working Interest Production (boe/d) 2,900 79% 77% 73% 3,100 73% 71% 67% 3,300 68% 65% 62%--------------------------------------------------------------------------------------------------------------------------------------------------------
Assumptions:
(1) Annual distributions are held at current levels of $1.05 per unit per year.(2) No new equity issued, other than distribution reinvestment program.(3) Field operating costs, including transportation, of $13.00 per barrel.
The Trust remains on track to meet its 2013 guidance and to add additional production with the start of its 2013 capital program, beginning in April with five planned wells at Midland, followed by six planned wells in Luling beginning in June.
The Midland drilling program will continue to target multiple pay zones from the Clearfork through to the Atoka. Several horizontal plays are also being drilled by other operators in the Martin county area. Eagle is focusing on three zones for potential horizontal drilling on its acreage next year. The Salt Flat program will continue to primarily target the Edwards "A" zone; however, the Edwards "B" and "C" zones have also been shown to be productive by the Trust on our acreage. Eagle anticipates further development in these zones as its technical team continues to enhance its understanding of the subsurface.
Acquisition of remaining interest in the Trust's Midland area properties
On April 22, 2013, the Trust's operating subsidiary completed the Acquisition and acquired all of the remaining interest in its oil and natural gas properties in the Permian Basin located near Midland for cash consideration of $US 8.5 million, subject to closing adjustments and effective as of January 1, 2013. The Trust now owns a 100% working interest in its Midland area properties.
The Acquisition was made pursuant to the terms and conditions of the April 2012 purchase and sale agreement for the Trust's initial acquisition of its interest in the Midland area properties. Under the terms of the purchase and sale agreement, the Trust agreed to purchase the seller's remaining 7.5% undivided interest by April 30, 2013.
