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Eastern American Natural Gas Trust Depos Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

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Eastern American Natural Gas Trust Depos (NGT) filed Quarterly Report for the period ended 2010-06-30.

Eastern American Natural Gas Trust Depos has a market cap of $133.1 million; its shares were traded at around $22.57 with and P/S ratio of 15. The dividend yield of Eastern American Natural Gas Trust Depos stocks is 3.9%. Eastern American Natural Gas Trust Depos had an annual average earning growth of 0.6% over the past 10 years.

Highlight of Business Operations:

The "Operating Cost Charge" for 2010 is based on an annual rate of $658,604, and for 2009 was based on an annual rate of $648,448. As provided in the Conveyances, the Operating Cost Charge will fluctuate based on the lesser of (A) five percent (5%) or (B) a percentage, not less than zero percent (0%), equal to the percentage increase, if any, in the average weekly earnings of Crude Petroleum and Gas Production Workers for the last calendar year, as shown by the index of average weekly earnings of Crude Petroleum and Gas Production Workers, as published by the United States Department of Labor, Bureau of Labor Statistics, based on a December-to-December comparison.

The Trust's Distributable Income was $1,529,559 for the three months ended June 30, 2010 as compared to $1,483,679 for the three months ended June 30, 2009. This increase was due to an increase in Royalty Income for the three months ended June 30, 2010 of $2,067,206 as compared to the three months ended June 30, 2009 of $2,055,259. The increase in Royalty Income was related to an increase in price payable to the Trust under the Gas Purchase Contract as discussed below ($5.367 per Mcf for the three months ended June 30, 2010 as compared to $5.160 per Mcf for the three months ended June 30, 2009). Offsetting this increase was a decrease in production of gas attributable to the Net Profits Interests for the three months ended June 30, 2010 (386 MMcf) as compared to the three months ended June 30, 2009 of (398 MMcf). This increase was partially offset due to Taxes on Production and Property were $156,423 for the three months ended June 30, 2010 as compared to $156,816 for the three months ended June 30, 2009. General and Administrative Expenses were $216,577 for the three months ended June 30, 2010 as compared to $226,031 for the three months ended June 30, 2009. The decrease in General and Administrative Expenses was due primarily to a decrease in professional fees.

The price payable to the Trust for gas production attributable to the Net Profits Interests was $5.367 per Mcf for the three months ended June 30, 2010 and $5.160 per Mcf for the three months ended June 30, 2009. The price per Mcf was higher for the three months ended June 30, 2010 than for the corresponding three month period ended June 30, 2009 due to an increase in the average spot market price for gas delivered at the Henry Hub near Henry, Louisiana ($4.579 per Dth for the three months ended June 30, 2010 as compared to $4.391 per Dth for the three months ended June 30, 2009).

The Trust's Distributable Income was $2,837,583 for the six months ended June 30, 2010 as compared to $3,437,817 for the six months ended June 30, 2009. This decrease was due to a decrease in Royalty Income for the six months ended June 30, 2010 to $4,220,039 as compared to the six months ended June 30, 2009 of $4,720,854. The decrease in Royalty Income was due to a decrease in the price payable to the Trust under the Gas Purchase Contract as discussed below ($5.545 per Mcf for the six months ended June 30, 2010 as compared to $5.963 per Mcf for the six months ended June 30, 2009). This decrease was also partially due to a decrease in production of gas attributable to the Net Profits Interests for the six months ended June 30, 2010 (762 MMcf) as compared to the six months ended June 30, 2009 (793 MMcf). The decline in production is primarily attributable to natural production declines. Taxes on Production and Property were $322,000 for the six months ended June 30, 2010 as compared to $357,819 for the six months ended June 30, 2009. The decrease in taxes is due directly to the decrease in Royalty Income as discussed above. General and Administrative Expenses were $731,178 for the six months ended June 30, 2010 as compared to $574,373 for the six months ended June 30, 2009. The increase in General and Administrative Expenses was due primarily to an increase in professional fees. Operating expenses in 2009 include expenses of $26,620 for a recomplete on one of the existing wells, due to a casing leak.

The price payable to the Trust for gas production attributable to the Net Profits Interests was $5.545 per Mcf for the six months ended June 30, 2010 and $5.963 per Mcf for the six months ended June 30, 2009. The price per Mcf was lower for the six months ended June 30, 2010 than for the corresponding six month period ended June 30, 2009 due to a decrease in the average spot market price for gas delivered at the Henry Hub near Henry, Louisiana ($4.741 per Dth for the six months ended June 30, 2010 as compared to $5.121 per Dth for the six months ended June 30, 2009).

United States Treasury obligations were $974.10 and $943.80, respectively. On June 30, 2010, the closing price of the Treasury Obligations, as quoted on such market, was $973.4.

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