Reserve Royalty Income Trust ('The Trust') is Pleased to Announce an Oil Royalty Acquisition, a Working Interest Asset Disposition and its Quarterly Cash Distribution to Unitholders
CALGARY, Dec. 20, 2017 /CNW/ - Mr. Rick (Buck) Braund, Chairman and CEO, and Mr. Randy Best, President & COO, on behalf of the Board of Directors of The Trust, are pleased to announce the acquisition of a 2.5% Gross Overriding Royalty on long life, low decline, medium gravity oil production in the Wainwright area of Alberta for total cash consideration of $14.5 Million. In a separate transaction The Trust sold approximately 450 boe/day of non-operated, working interest natural gas and liquids production in the Deep Basin area of Alberta for cash consideration of $14.2 Million. These two transactions were effective October 1, 2017 and are consistent with The Trust's long term strategy of becoming a pure play oil and gas royalty company.
The Trust is forecasting 2018 operating cash flow of $8 Million of which 80% will come from royalty income. The other 20% of operating cash flow will continue to be derived from its liquids rich, natural gas, working interest production in the Deep Basin. 2018 forecast production is 1,550 boe/day comprised of 6,500 GJ/day of natural gas, 200 bbl/day of oil and 300 bbl/day of natural gas liquids. Net debt at year end 2017 is forecast to be $2.5 Million with undrawn debt capacity of $27.5 Million.
The Trust is also pleased to announce that its Board of Directors has declared a quarterly distribution of Cdn. $0.01 per unit to be paid on January 30, 2018 to unitholders of record on December 31, 2017.
Reserve Royalty Income Trust was formed in late 2013 as a private, mutual fund trust. The Trust has invested approximately $140 Million to acquire royalty and low decline, non-operated, working interest oil and natural gas production and related facilities. The Trust currently pays $0.04/unit annually, paid quarterly on a tax effective basis to its unitholders. Since inception The Trust has distributed $18.5 Million to unitholders. In 2018 The Trust will continue to acquire fee title lands and gross overriding royalties on dependable, long-life, oil and natural gas assets.
Reserve Royalty Income Trust's distribution policy is reviewed quarterly by its Board of Directors and is based on future commodity prices, current operations and investment opportunities.
SOURCE Reserve Royalty Income Trust
