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

November 05, 2010 | About:
10qk

10qk

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Eastern American Natural Gas Trust Depos (NGT) filed Quarterly Report for the period ended 2010-09-30.

Eastern American Natural Gas Trust Depos has a market cap of $136.1 million; its shares were traded at around $22.749 with and P/S ratio of 15.4. The dividend yield of Eastern American Natural Gas Trust Depos stocks is 4.5%.NGT is in the portfolios of Jim Simons of Renaissance Technologies LLC.

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 $1,548,548 for the three months ended September 30, 2010 as compared to $1,562,297 for the three months ended September 30, 2009. This decrease was due to a $31,464 increase in General and Administrative Expenses for the three months ended September 30, 2010 ($189,167 as compared to the three months ended September 30, 2009 of $157,703). The increase in General and Administrative Expenses was due primarily to an increase in professional fees. The decrease in Distributable Income was also partially due to a decrease in production of gas attributable to the Net Profits Interests for the three months ended September 30, 2010 (383 MMcf) as compared to the three months ended September 30, 2009 of (411 MMcf). The effect of the decrease in gas volumes was offset by an increase in the price payable to the Trust under the Gas Purchase Contract as discussed below ($5.374 per Mcf for the three months ended September 30, 2010 as compared to $4.967 per Mcf for the three months ended September 30, 2009), resulting in an increase in Royalty Income for the three months ended September 30, 2010 to $2,060,682 as compared to the three months ended September 30, 2009 of $2,040,357. Taxes on Production and Property were $158,320 for the three months ended September 30, 2010 as compared to $158,245 for the three months ended September 30, 2009.

September 30, 2010 than for the corresponding three month period ended September 30, 2009 due to an increase in the average spot market price for gas delivered at the Henry Hub near Henry, Louisiana ($4.585 per Dth for the three months ended September 30, 2010 as compared to $4.215 per Dth for the three months ended September 30, 2009).

The Trust's Distributable Income was $4,386,132 for the nine months ended September 30, 2010 as compared to $5,000,116 for the nine months ended September 30, 2009. This decrease was due to a decrease in Royalty Income for the nine months ended September 30, 2010 to $6,280,721 as compared to the nine months ended September 30, 2009 of $6,761,212. The decrease in Royalty Income was partially due to a decrease in the price payable to the Trust under the Gas Purchase Contract as discussed below ($5.488 per Mcf for the nine months ended September 30, 2010 as compared to $5.631 per Mcf for the nine months ended September 30, 2009). This decrease was also partially due to a decrease in production of gas attributable to the Net Profits Interests for the nine months ended September 30, 2010 (1,145 MMcf) as compared to the nine months ended September 30, 2009 (1,204 MMcf). The decline in production is primarily attributable to natural production declines. Taxes on Production and Property were $480,320 for the nine months ended September 30, 2010 as compared to $516,063 for the nine months ended September 30, 2009. The decrease in taxes is due directly to the decrease in Royalty Income as discussed above. General and Administrative Expenses were $920,345 for the nine months ended September 30, 2010 as compared to $732,076 for the nine months ended September 30, 2009. The increase in General and Administrative Expenses was due primarily to an increase in professional fees. Operating expenses for the nine months ended September 30, 2009 include expenses of $26,620 for a recomplete on one of the existing wells, due to a casing leak. During the nine months ended September 30, 2010, no such recompletions occurred.

The price payable to the Trust for gas production attributable to the Net Profits Interests was $5.488 per Mcf for the nine months ended September 30, 2010 and $5.631 per Mcf for the nine months ended September 30, 2009. The price per Mcf was lower for the nine months ended September 30, 2010 than for the corresponding nine month period ended September 30, 2009 due to a decrease in the average spot market price for gas delivered at the Henry Hub near Henry, Louisiana ($4.689 per Dth for the nine months ended September 30, 2010 as compared to $4.819 per Dth for the nine months ended September 30, 2009).

market for United States Treasury obligations were $984.20 and $971.30, respectively. On September 30, 2010, the closing price of the Treasury Obligations, as quoted on such market, was $984.20.

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