ECA MARCELLUS TRUST I (NYSE: ECT) announced today that the Trust’s distribution for the quarter ended September 30, 2012 will be $0.624 per common unit, which is expected to be distributed on or before November 30, 2012 to holders of record as of the close of business on November 20, 2012. During the quarter production of 2,993 Mmcf exceeded the targeted production of 2,594 Mmcf by 15.4%.The quarterly Trust’s income available for distribution to all Trust units was $0.516 per unit, which was $0.108 per unit below the subordination threshold for the common units of $0.624 for the quarter. As a result, the distribution on the subordinated units was reduced in order to permit a distribution of $0.624 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.
Looking at the universe of stocks we cover at Dividend Channel, on 2/18/15, ECA Marcellus Trust I will trade ex-dividend, for its quarterly dividend of $0.18, payable on 2/27/15. As a percentage of ECT's recent stock price of $4.69, this dividend works out to approximately 3.84%, so look for shares of ECA Marcellus Trust I to trade 3.84% lower — all else being equal — when ECT shares open for trading on 2/18/15.