GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

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

August 07, 2009 | About:

Eastern American Natural Gas Trust Depos (NGT) filed Quarterly Report for the period ended 2009-06-30.

Eastern American Natural Gas Trust was formed to acquire and hold net profits interests created from the working interests owned by Eastern American in 650 producing gas wells and 65 proved development well locations located in West Virginia and Pennsylvania. Eastern American Natural Gas Trust Depos has a market cap of $140.1 million; its shares were traded at around $23.75 with and P/S ratio of 8.2. The dividend yield of Eastern American Natural Gas Trust Depos stocks is 5.6%. Eastern American Natural Gas Trust Depos had an annual average earning growth of 5.9% over the past 10 years. GuruFocus rated Eastern American Natural Gas Trust Depos the business predictability rank of 2.5-star.

Highlight of Business Operations:

The "Operating Cost Charge" for 2009 is based on an annual rate of $648,448, and 2008 was based on an annual rate of $617,564. 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 $1,483,679 for the three months ended June 30, 2009 as compared to $3,956,828 for the three months ended June 30, 2008. This decrease was due to a decrease in Royalty Income for the three months ended June 30, 2009 to $2,055,259 as compared to the three months ended June 30, 2008 of $4,679,117. The decrease in Royalty Income was related to a decrease in the price payable to the Trust under the Gas Purchase Contract as discussed below ($5.160 per Mcf for the three months ended June 30, 2009 as compared to $11.305 per Mcf for the three months ended June 30, 2008). This decrease was also related to a decrease in production of gas attributable to the Net Profits Interests for the three months ended June 30, 2009 (398 MMcf) as compared to the three months ended June 30, 2008 (413 MMcf). The decline in production is primarily attributable to natural production declines. Taxes on Production and Property were $156,816 for the three months ended June 30, 2009 as compared to $344,328 for the three months ended June 30, 2008. The decrease in taxes is due directly to the decrease in Royalty Income as discussed above. General and Administrative Expenses were $226,031 for the three months ended June 30, 2009 as compared to $223,570 for the three months ended June 30, 2008. The increase in General and Administrative Expenses was due primarily to an increase in professional fees. Operating expenses include expenses of $26,620 for a recomplete on one of the existing wells, due to casing leak.

The price payable to the Trust for gas production attributable to the Net Profits Interests was $5.160 per Mcf for the three months ended June 30, 2009 and $11.305 per Mcf for the three months ended June 30, 2008. The price per Mcf was lower for the three months ended June 30, 2009 than for the corresponding three month period ended June 30, 2008 due to a decrease in the average spot market price for gas delivered at the Henry Hub near Henry, Louisiana ($4.391 per Dth for the three months ended June 30, 2009 as compared to $9.977 per Dth for the three months ended June 30, 2008).

The Trust\'s Distributable Income was $3,437,817 for the six months ended June 30, 2009 as compared to $6,729,671 for the six months ended June 30, 2008. This decrease was due to a decrease in Royalty Income for the six months ended June 30, 2009 to $4,720,854 as compared to the six months ended June 30, 2008 of $8,227,008. 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 ($5.963 per Mcf for the six months ended June 30, 2009 as compared to $9.997 per Mcf for the six months ended June 30, 2008). 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, 2009 (793 MMcf) as compared to the six months ended June 30, 2008 (821 MMcf). The decline in production is primarily attributable to natural production declines. Taxes on Production and Property were $357,819 for the six months ended June 30, 2009 as compared to $606,450 for the six months ended June 30, 2008. The decrease in taxes is due directly to the decrease in Royalty Income as discussed above. General and Administrative Expenses were $574,373 for the six months ended June 30, 2009 as compared to $582,105 for the six months ended June 30, 2008. The decrease in General and Administrative Expenses was due primarily to a decrease in professional fees. Operating expenses include expenses of $26,620 for a recomplete on one of the existing wells, due to casing leak.

The price payable to the Trust for gas production attributable to the Net Profits Interests was $5.963 per Mcf for the six months ended June 30, 2009 and $9.997 per Mcf for the six months ended June 30, 2008. The price per Mcf was lower for the six months ended June 30, 2009 than for the corresponding six month period ended June 30, 2008 due to a decrease in the average spot market price for gas delivered at the Henry Hub near Henry, Louisiana ($5.121 per Dth for the six months ended June 30, 2009 as compared to $8.788 per Dth for the six months ended June 30, 2008).

United States Treasury obligations were $935.70 and $899.50, respectively. On June 30, 2009, the closing price of the Treasury Obligations, as quoted on such market, was $915.10.

Read the The complete Report

Rating: 4.3/5 (4 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide