SANDRIDGE MISSISSIPPIAN TRUST I (NYSE: SDT) today announced a quarterly distribution for the three-month period ended December 31, 2012 (which primarily relates to production attributable to the Trust’s interests from September 1, 2012 through November 30, 2012) of $18.2 million, or $0.650747 per 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 March 1, 2013 to holders of record as of the close of business on February 14, 2013.
During the three-month production period ended November 30, 2012, total sales volumes increased 1% over the previous three-month period. This increased volume was due to higher natural gas production, offset by slightly lower oil production. The additional natural gas production was offset by lower realized prices. The realized price, including the impact of hedges and post production expenses, for natural gas was 13% lower compared to the previous period. Overall, the period’s results generated approximately a 10% lower distribution per unit than the target.
The Trust owns royalty interests created from interests held by SandRidge Energy, Inc. (“SandRidge”) and its subsidiaries in oil and natural gas properties in the Mississippian formation in Alfalfa, Garfield, Grant, Major 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 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 will be 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. 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. The announced distribution exceeded the Subordination Threshold, but not the Incentive Threshold, for the quarter.
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