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Dominion Resources Black Warrior Trust T Reports Operating Results (10-Q)

August 08, 2012 | About:
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10qk

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Dominion Resources Black Warrior Trust T (DOM) filed Quarterly Report for the period ended 2012-06-30.

Dominion Resources Black Warrior Trust has a market cap of $52.6 million; its shares were traded at around $6.6 with a P/E ratio of 7.5 and P/S ratio of 6.3. The dividend yield of Dominion Resources Black Warrior Trust stocks is 7.8%.

Highlight of Business Operations:

The Trust received royalty income amounting to $1,291,584 during the second quarter of 2012 compared to $2,077,474 during the second quarter of 2011. This revenue was derived from the receipt of cash on production of 500,158 mcf at an average price of $2.58 per mcf after deducting production taxes of $75,400 compared to 533,858 mcf at an average price received of $3.89 per mcf after deducting production taxes of $128,047 in the second quarter of 2011. The Trust received royalty income amounting to $3,026,946 during the six months ended June 30, 2012 compared to $4,164,988 during the six months ended June 30, 2011. This revenue was derived from the receipt of cash on production of 1,026 Mmcf at an average price received of $2.95 per mcf after deducting production taxes of $181,643 compared to 1,117 Mmcf at an average price received of $3.73 per mcf after deducting production taxes of $261,292 in the six months ended June 30, 2011. For the three and six-month periods ended June 30, 2012, the Trust was negatively impacted by the decrease in natural gas prices and production, as compared with the three and six-month periods ended June 30, 2011. Natural gas prices are influenced by many factors such as seasonal temperatures, domestic demand and other factors that are beyond the control of the Trustee. The decrease in production volumes is attributed to declining production. Production taxes are based on revenues rather than production volumes. Accordingly, production taxes did not fluctuate proportionately to the decrease in volumes.

Independent petroleum engineers estimate the net proved reserves attributable to the Royalty Interests. In accordance with FASB guidance, estimates of future net revenues from proved reserves have been prepared using the average market gas prices over the prior 12-month period or applicable contract price as of December 31, as appropriate, and related costs. Numerous uncertainties are inherent in estimating volumes and the value of proved reserves and in projecting future production rates and the timing of development of non-producing reserves. Such reserve estimates are subject to change as additional information becomes available. The reserves actually recovered and the timing of production may be substantially different from the reserve estimates.

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