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MESA OFFSHORE TRUST ANNOUNCES ADDITIONAL DRILLING

 MESA OFFSHORE TRUST ANNOUNCES ADDITIONAL DRILLING
 HOUSTON, March 31 /PRNewswire/ -- Mesa Offshore Trust (the "trust")


today announced certain information regarding additional drilling on the trust's royalty properties and the funding of its ongoing administrative expenses.
 As previously disclosed, MESA Inc. ("Mesa"), the operator of the trust's royalty properties, has been engaged in exploratory and development drilling on the trust's South Marsh Island 155 property. Primarily as a result of such drilling, the costs of which are subject to recovery by Mesa before any royalty income is paid to the trust, no payments of royalty income are expected to be made to the trust until at least late 1992 or early 1993. In addition, due to a lack of royalty income in recent periods, the trust is currently unable to pay its ongoing administrative expenses. The trust announced today, however, that Mesa has advised the trust that Mesa intends to fund the general and administrative expenses of the trust until such time as the trust can obtain alternative financing or royalty income payments to the trust are resumed. Amounts so advanced by Mesa will be recovered by Mesa before any royalty income is paid to the trust. At March 25, 1992, unpaid administrative expenses of the trust totaled approximately $135,000.
 As previously announced, Mesa has advised the trust that it has completed the first of two planned exploratory wells on the royalty properties. The first exploratory well did not encounter commercial quantities of oil or gas and was subsequently plugged and abandoned. Pending further evaluation, Mesa has advised the trust that the drilling of the second planned exploratory well has been deferred. The drilling rig from the first well was moved to drill a development well on the South Marsh Island block 155 "A" platform. As previously disclosed, Mesa has advised the trust that this well has been drilled to a total depth of 11,518 feet. Mesa has further advised the trust that the well penetrated over 150 feet of net hydrocarbon bearing pay in the objective interval and that approximately 40 feet of pay was indicated in a shallower zone.
 Once the well is completed and all well testing has been conducted and evaluated, Mesa has informed the trust that the well will be produced through existing production facilities. The completed well cost is estimated at $4.2 million ($2.7 million net to the trust). Mesa has also informed the trust that preliminary flow testing of the well indicates that the well will produce in commercial quantities. The trust has been advised by Mesa that Mesa expects to have completed all well testing by mid-April 1992 and that at such time more definitive information regarding the well's productive capabilities should be available.
 Until the development well is completed and all well testing has been conducted and evaluated, it will be difficult to estimate the well's impact on the potential termination of the trust. However, Mesa has advised the trust that it anticipates that the reserves developed by the development well will significantly affect reserves and future net revenue attributable to the trust.
 It is possible that production from this well could result in the resumption of royalty income payments to the trust in late 1992 or early 1993. However, accrued trust expenses, including repayment of funds advanced by Mesa, would be paid out of future royalty income payments before any distributions are made to unitholders. In addition, after any payments of royalty income resume to the trust, the trustee anticipates reestablishing an expense reserve further delaying any resumption of distributions to unitholders. It is also possible that a resumption of royalty income payments above the termination threshold level prescribed in the indenture would result in the extension of the life of the trust without being sufficient to provide for significant unitholder distributions. Therefore, favorable results from the drilling of the development well might not affect the trustee's decision to continue to pursue the sale of the trust estate as discussed below.
 As previously announced, the trustee has been pursuing and evaluating various alternatives to address the trust's lack of royalty income. The trustee is pursuing the possiblity of borrowing funds on behalf of the trust, using the trust's assets as security, to cover the trust's administrative expenses until royalty income payments are resumed. At the present time, the trust has been unable to secure such financing from a third party lender, although Mesa has agreed to advance funds to the trust, as discussed above.
 In addition, the trustee is pursuing cost-cutting measusres such as the possiblitiy of transferring the listing of the trust units from the New York Stock Exchange to the Pacific Stock Exchange to reduce the amount of listing fees paid by the trust, as well as having the reserve reports for the royalty properties prepared by Mesa rather than DeGolyer and MacNaughton, independent petroleum engineering consultants. Listing the trust units on the Pacific Stock Exchange rather than the New York Stock Exchange would mean a reduction of over $50,000 in annual listing fees paid by the trust.
 In addition to such cost-cutting measures, the trustee is evaluating the possibility of terminating the trust and selling the trust estate pursuant to a unitholder vote or a court order. Under the terms of the indenture governing the trust, the trust will terminate, without any action by the unitholders or the trustee, in the event the total amount of cash received by the trust per year falls below certain levels for three successive years. It is possible that the cash received by the trust will fall below such level for 1992 due to the recovery by Mesa of the South Marsh Island drilling costs.
 If trust income also remained at below such threshold levels for 1993 and 1994, the trust would terminate at the end of 1994. During such three-year period, the trust would continue to accrue routine administrative expenses of up to $650,000 per year for fees of the trustee, printing and mailing costs, stock exchange listing fees, and fees for accounting, engineering, legal and other professional services. Distributions to unitholders during such period are expected to be minimal or nonexistent. Such accrual of expenses would also have the ulltimate effect of depleting the trust estate so that upon the termination of the trust and sale of the trust assets, after payment of accrued expenses, there might be little or no funds remaining for distribution to unitholders. The trustee is therefore evaluating alternatives for earlier termination of the trust.
 A sale of the trust estate pursuant to a unitholder vote would require a vote in favor of such sale by at least a majority of the outstanding trust units at a meeting of unitholders called for such purpose. Meetings of unitholders may be called by the trustee or by unitholders owning at least 10 percent of the outstanding trust units. The costs of holding such a meeting, including proxy solicitation, attorney fees, printing and mailing costs and other expenses, could be at least $140,000.
 In addition, there is a risk that unitholder response would not be sufficient to obtain a majority vote. On the other hand, a sale of the trust estate pursuant to a court order would involve filing a petition in the appropriate court to request that court to direct the trustee to sell the trust estate in contravention of the indenture. The costs of such a proceeding, including court costs, attorney fees, notice to unitholders and other expenses, could be at least $65,000. Petitioning a court would not assure that the court would not in fact order a unitholder vote on such sale. Additional expenditures in either case would be necessary for costs of sale, including preparation of an information package for prospective buyers, fees of financial advisers and other expenses.
 -0- 3/31/92
 /CONTACT: David Snyder of Texas Commerce Bank, as trustee, 713-236-5100/
 (MOS) CO: Mesa Offshore Trust ST: Texas IN: OIL SU:


GK -- NY078 -- 3510 03/31/92 15:08 EST
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Date:Mar 31, 1992
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