DALLAS, Oct. 28 /PRNewswire-FirstCall/ -- Williams Coal
Seam Gas Royalty Trust (NYSE: WTU) announced today that it has
completed a sale of the assets of the Trust in connection with the
termination of the Trust. As previously announced, the
trustee solicited bids for the Trust's royalty interests in June
and requested updated bids from previous bidders in October to
confirm the highest acceptable offer. Following receipt of
updated bids and determination of the highest acceptable offer,
Williams Production Company, LLC ("WPC") had the right under the
Trust Agreement to acquire the royalty interests at a purchase
price of 105% of the highest acceptable offer. Williams
exercised this right and purchased the royalty interests for a
purchase price of $23,100,000.
The effective date of the sale of the royalty interests is
September 1, 2010. On
November 4, the trustee will announce
the fourth quarter distribution, which will include only the months
of July and August through the effective date of the sale.
The trustee will announce the date for a closing of the books
for the final distribution, as well as the amount of the final
distribution, which will include the proceeds from the sale, less
any remaining trust expenses once the final distribution amount has
been determined.
Pursuant to the terms of the Trust Agreement, the Trust
terminated effective March 1, 2010
because the reserve report as of December
31, 2009, reflected that, as of such date, the net present
value (discounted at 10 percent) of the estimated future net
revenues for proved reserves attributable to the royalty interests
but using the average monthly Blanco Hub Spot Price for the past
calendar year less certain gathering costs was equal to or less
than $30 million thereby triggering a
termination of the Trust.
Following termination, the trustee has continued to act as
trustee of the Trust until all Trust assets are sold and the net
proceeds from such sales distributed to unitholders in accordance
with the procedures set forth in the Trust Agreement. These
procedures are described in more detail in the Trust's most recent
annual report on Form 10-K and quarterly report on Form 10-Q filed
with the Securities and Exchange Commission.
Prior to the sale of assets, the Trust owned net profits
interests in certain proved coal seam gas properties owned by WPC
and located in the San Juan Basin
of northwestern New Mexico (the
"Working Interest Properties") and southwestern Colorado, including WPC's 35 percent net
profits interest in 5,348 gross acres in La Plata County, Colorado (the "Farmout
Properties").
The Trust is a grantor trust formed by The Williams Companies,
Inc., parent company of WPC, and was designed to provide
unitholders with quarterly cash distributions and tax credits under
Section 29 of the Internal Revenue Code, which has expired as of
12/31/2002, from certain coal seam gas properties. The units are
listed on The New York Stock Exchange under the symbol "WTU."
Additional information including the Trust's cash distribution
history, current and prior year financial reports, a link to
filings made with the Securities and Exchange Commission and more
can be found on its website at
http://www.wtu-williamscoalseamgastrust.com/.
SOURCE Williams Coal Seam Gas Royalty Trust
Copyright . 28 PR Newswire