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MV Oil Trust Announces Trust Fourth Quarter Distribution
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
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Rhea-AI Summary
MV Oil Trust (NYSE:MVO) announced a net profit distribution of $4,715,000, equating to $0.410 per unit for the quarter ending December 31, 2022. Unitholders of record as of January 17, 2023 will receive this payment on January 25, 2023. The Trust reported a total production volume of 156,781 BOE at an average price of $80.31 per BOE, leading to gross proceeds of $12,590,781. However, $263,541 was withheld to build a reserve for future expenses.
Positive
Distribution amounting to $4,715,000 or $0.410 per unit indicates healthy cash flow.
Total gross proceeds of $12,590,781 highlight solid performance in oil production.
Strong average price of $80.31 per BOE suggests favorable market conditions.
Negative
Withholding $263,541 to build a cash reserve could imply future financial uncertainties.
The estimated cash flows are dependent on actual drilling results and market conditions.
HOUSTON--(BUSINESS WIRE)--
MV Oil Trust (NYSE: MVO) announced the Trust distribution of net profits for the quarterly payment period ended December 31, 2022.
Unitholders of record on January 17, 2023 will receive a distribution amounting to $4,715,000 or $0.410 per unit payable January 25, 2023.
Volumes, average price and net profits for the payment period were:
Volume (BOE)
156,781
Average price (per BOE)
$
80.31
Gross proceeds
$
12,590,781
Costs
$
6,107,904
Net profits
$
6,482,877
Percentage applicable to Trust’s 80%
Net profits interest
$
5,186,301
MV Partners reserve for capital expenditures
$
--
Total cash proceeds available for the Trust
$
5,186,301
Provision for current estimated Trust expenses
$
(207,760
)
Amount withheld for future Trust expenses
$
(263,541
)
Net cash proceeds available for distribution
$
4,715,000
As previously disclosed, in November 2021, the Trustee notified MV Partners, LLC (“MV Partners”) that the Trustee intends to build a reserve for the payment of future known, anticipated or contingent expenses or liabilities, commencing with the distribution payable in the first quarter of 2022. The Trustee intends to withhold a portion of the proceeds otherwise available for distribution each quarter to gradually build a cash reserve to approximately $1.265 million. This amount is in addition to the letter of credit in the amount of $1.8 million provided to the Trustee by MV Partners to protect the Trust against the risk that it does not have sufficient cash to pay future expenses. The Trustee may increase or decrease the targeted amount at any time, and may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested as required by the Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds. The Trustee has elected to withhold $263,541 from the proceeds otherwise available for distribution this quarter, for a total amount of $1,001,460 withheld to date.
This press release contains forward-looking statements. Although MV Partners has advised the Trust that MV Partners believes that the expectations contained in this press release are reasonable, no assurances can be given that such expectations will prove to be correct. The announced distributable amount is based on the amount of cash received or expected to be received by the Trustee from the underlying properties on or prior to the record date with respect to the quarter ended December 31, 2022. Any differences in actual cash receipts by the Trust could affect this distributable amount. Other important factors that could cause these statements to differ materially include the actual results of drilling operations, risks inherent in drilling and production of oil and gas properties, the ability of commodity purchasers to make payment, the effect, impact, potential duration or other implications of the COVID-19 pandemic, actions by the members of the Organization of Petroleum Exporting Countries, and other risk factors described in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission. Statements made in this press release are qualified by the cautionary statements made in these risk factors. The Trust does not intend, and assumes no obligations, to update any of the statements included in this press release.
