ECA Marcellus Trust I Announces Quarterly Distribution
ECA MARCELLUS TRUST I (NYSE: ECT) announced today that the Trust’s distribution for the quarter ended December 31, 2012 will be $0.682 per common unit, which is expected to be distributed on or before February 28, 2013 to holders of record as of the close of business on February 19, 2013. The quarterly Trust’s income available for distribution to all Trust units was $0.512 per unit, which was $0.189 per unit below the subordination threshold for the common units of $0.701 for the quarter. As a result, the distribution on the subordinated units was eliminated in order to permit a distribution of $0.682 per unit to holders of common units.
The Trust was formed by Energy Corporation of America ("ECA") to own royalty interests in natural gas properties owned by ECA in the Marcellus Shale formation in Greene County, Pennsylvania, and is entitled to receive certain amounts of the proceeds attributable to ECA’s interest in the sale of production from the properties. As described in the Trust's filings, 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 production and natural gas prices and the amount of the Trust's administrative expenses, among other factors.
Pursuant to IRC Section 1446, withholding tax on income effectively connected to a United States trade or business allocated to foreign partners should be made at the highest marginal rate. Under Section 1441, withholding tax on fixed, determinable, annual, periodic income from United States sources allocated to foreign partners should be made at 30% of gross income unless the rate is reduced by treaty. This release is intended to be a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b) by ECA Marcellus Trust I, and while specific relief is not specified for Section 1441 income, this disclosure is intended to suffice. Nominees and brokers should withhold 35% of the distribution made to foreign partners.
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