EASTERN AMERICAN NATURAL GAS TRUST (NYSE: NGT) announced today that the sponsor of the Trust, Energy Corporation of America (“ECA”) has today exercised its right of first refusal to acquire the Trust’s Royalty NPI. Consequently, the Purchase and Sale Agreement dated October 24, 2012 between the Trust, as seller, and Softvest, LP, as buyer (the “Softvest Agreement”), has terminated in accordance with its terms. In lieu of selling the Royalty NPI to Softvest, the Trust will sell the Royalty NPI to ECA for the purchase price determined by the Softvest Agreement which, based on the closing price of the NYMEX December 2012 contract on November 2, 2012, is $5,917,264. The sale is expected to close in January 2013. Net proceeds of the sale, after payment of expenses of the sale and any other expenses of the Trust, and subject to any reserves the Trustee may establish in connection with the termination of the Trust, are expected to be distributed as part of the final distribution from the Trust to unitholders of record as of the record date for the quarterly period ending March 31, 2013.
Pursuant to the Softvest Agreement, Softvest had the right to a reduction of the purchase price in the event of defects in title to the Royalty NPI. However, in connection with its exercise of its right of first refusal, ECA noted that it will not require any review of the status of title to the Royalty NPI. Consequently, the Trust does not anticipate any reduction of the price for title issues.
Although not required by the terms of the Softvest Agreement or by ECA’s right of first refusal, ECA also agreed to reimburse the Trust, for the benefit of the Trust unitholders, for any amounts the Trust may be required to pay to Softvest as reimbursement of Softvest’s expenses pursuant to Section 8.2 of the Softvest Agreement.
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