Chesapeake Granite Wash Trust Announces Distribution Of $0.0303 Per Common Unit

HOUSTON, May 3, 2019 /PRNewswire/ -- Chesapeake Granite Wash Trust (NYSE:CHKR) (the "Trust") today announced that its common unit distribution for the quarter ended March 31, 2019 (which primarily relates to production attributable to the Trust's royalty interests from December 1, 2018 through February 28, 2019) will be $0.0303 per common unit. The distribution will be paid on May 30, 2019 to common unitholders of record at the close of business on May 20, 2019.

During the three-month production period ended February 28, 2019, sales volumes and realized prices were both lower than initial Trust estimates.

The following table provides supporting documentation, as provided by Chesapeake Energy Corporation ("Chesapeake") to the Trust, for the calculation of distributable income available to unitholders for the production period from December 1, 2018 through February 28, 2019.

     Sales volumes:


          
            Oil (mbbl)                           23


          
            Natural gas (mmcf)                  546


                   Natural gas liquids (mbbl)           45


                        Total oil equivalent volumes
                         (mboe)                        158




      Average price received per production
       unit:(1)


          
            Oil                                      $
       46.43


          
            Natural gas                               $
       1.34


          
            Natural gas liquids                      $
       16.30




      Distributable income calculation (in
       thousands except per unit income):


                   Revenue less production taxes(1)         $
       2,328


                   Trust administrative expenses     (841)


                   Cash withheld to increase cash
                    reserves(2)                       (70)



                   Distributable income available to
                    unitholders                             $
       1,417



                   Calculated distributable income
                    per unit(3)                            $
       0.0303

     
     (1) Includes the effect of certain
              marketing, gathering and
              transportation deductions.



     
     (2) Commencing with the distribution to
              unitholders payable in first quarter
              2019, the Trustee intends to begin
              withholding the greater of $70,000
              or 3.5% of the funds otherwise
              available for distribution each
              quarter to gradually increase
              existing cash reserves by a total of
              approximately $850,000. 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.



     
     (3) Based on 46,750,000 common units
              issued and outstanding.

Due to the timing of the payment of production proceeds to the Trust, quarterly distributions generally include royalties attributable to sales of oil, natural gas liquids and natural gas for three months, including the first two months of the quarter just ended and the last month of the prior quarter.

The Trust was formed by Chesapeake in June 2011 and owns royalty interests in certain oil and natural gas properties in the Colony Granite Wash play in Washita County, Oklahoma. The Trust is entitled to receive proceeds from the sale of production attributable to the royalty interests. As described in the Trust's filings with the Securities and Exchange Commission (the "SEC"), the amount of Trust revenues and the quarterly distributions to Trust unitholders will fluctuate from quarter to quarter, depending on the sales volume of oil, natural gas liquids and natural gas attributable to the Trust's royalty interests and the prices received for such sales and the amount of the Trust's administrative expenses, among other factors.

For additional information regarding the Trust and its results of operations and financial condition, please refer to the Trust's SEC filings.

ABOUT CHESAPEAKE GRANITE WASH TRUST:

Chesapeake Granite Wash Trust (NYSE:CHKR) is a Delaware statutory trust formed by Chesapeake to own certain royalty interests in oil, natural gas liquids and natural gas wells in Washita County, Oklahoma producing from the Colony Granite Wash play within the broader Granite Wash formation of the Anadarko Basin. The common units do not represent interests in and are not obligations of Chesapeake. The common units are listed on the New York Stock Exchange under the symbol CHKR. Further information is available at www.chkgranitewashtrust.com where the Trust routinely posts announcements, updates, investor information and news releases.

Pursuant to IRC Section 1446, withholding tax on income effectively connected to a U.S. 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 U.S. 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 the Trust, and while specific relief is not specified for Section 1441 income, this disclosure is intended to suffice. For distributions made to foreign partners, nominees and brokers should withhold at the highest effective tax rate.

This news release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this news release, other than statements of historical facts, are "forward-looking statements" for purposes of these provisions. The anticipated distribution discussed herein is based, in part, on the amount of cash received or expected to be received by the Trust from Chesapeake with respect to the relevant quarterly period. Any differences in actual cash receipts by the Trust could affect this distributable amount. Other important factors that could cause actual results to differ materially include expenses of the Trust and reserves for anticipated future expenses. Neither Chesapeake nor the Trustee intends, and neither assumes any obligation, to update any of the statements included in this news release. An investment in common units issued by the Trust is subject to the risks described in the Trust's Annual Report on Form 10-K for the year ended December 31, 2018, as well as other risks identified in the Trust's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. The Trust's annual, quarterly and other filed reports are or will be available at the SEC's website at www.sec.gov. The Trust does not intend, and assumes no obligations, to update any of the statements included in this news release.

TRUSTEE CONTACT INFORMATION:
The Bank of New York Mellon Trust Company, N.A.
Sarah Newell
512-236-6555
sarah.newell@bnymellon.com

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SOURCE Chesapeake Granite Wash Trust