We have continued to receive our share of monthly production payments from ATP Oil & Gas Corporation ("ATP"), pursuant to our limited-term overriding royalty interests (the "ORRIs") in ATP's Gomez and Telemark offshore oil and gas properties, pursuant to the Bankruptcy Court's order and subject to a Disgorgement Agreement executed in August 2012, shortly after ATP filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As of March 31, 2013, our unrecovered investment in the ORRIs was $32.1 million, and we had received aggregate production payments of $15.1 million subject to the Disgorgement Agreement, $6.2 million of which was received during the first quarter of 2013.
On April 23, 2013, the Department of the Interior, on behalf of the Bureau of Safety and Environmental Enforcement, issued an order directing that the wells on the Gomez properties be shut in and that operations cease. Operations and production ceased on the Gomez properties on April 30, 2013. As a result of the shut-in of the Gomez wells, our cash flows attributable to the ORRIs will be negatively affected, but we will continue to receive our share of monthly production payments attributable to the Telemark properties (and our portion of the production payments attributable to the Gomez properties prior to April 30, 2013), subject to the Disgorgement Agreement referred to above. Of the $6.2 million of ORRI distribution we received in the first quarter of 2013, $2.8 million was attributable to Gomez production and $3.4 million was attributable to Telemark production.
Operating Results – Three months ended March 31, 2013
Investment income totaled $5.8 million for the quarter ended March 31, 2013, increasing 3% compared to $5.6 million in the corresponding quarter of 2012, primarily attributable to higher overall portfolio balances offset by lower weighted average yields.Operating expenses for the first quarter of 2013 were $3.5 million, increasing $0.8 million, or 31%, compared to the first quarter of 2012, primarily as a result of higher interest expenses on increased borrowings to support our larger investment portfolio and higher base management fees on higher total asset balances. The resulting net investment income was $2.3 million, or $0.11 per share, for the quarter ended March 31, 2013, compared to $3.0 million, or $0.14 per share, for the quarter ended March 31, 2012.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV