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MV Oil Trust Message Board

  • gpd8252 gpd8252 Jun 30, 2011 7:41 AM Flag

    July Dividend

    Aprils dividend was $0.825 which was made up of $0.675 core dividend plus $0.15 of special one time payments. The one time payments were 80% of semgroup settlement of $1.25 million plus MV Partners return of cap-ex of $750k.
    My estimate of July dividend is the $0.675 core April dividend plus 20% or $0.81 per share.
    This estimate is based on an average price received for oil of slightly less than $78/barrel for their oil during the quarter. It looks like the July dividend will be based on cash received by the trust during April-June which is derived from MV Partners production in Dec 2010 - Feb 2011.
    Reading the latest 10-Q makes me think that there is a 4 month delay between MV Partners production of oil and cash received by the trust. I had always thought that the delay between production and cash received was only one month but careful reading of the latest 10-Q causes me to change my mind. I think the "big" dividend for production of March - May will be in October.

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    • Liza, I may have to revise my statement on MVO receiving WTI pricing. When MVO was hedged, they were getting WTI pricing. Now that their production is not hedged, and MV Purchasing handles the sale of their oil, I'm not sure where they sell it. It wouldn't be much of a stretch to think they would truck their oil to Lousianna to get an extra $20/barrel for it. Based on their average oil price for the last quarter, they must have been selling their oil somewhere other than Cushing. Or they just have a good person handling the sales.

    • Cash covering revenues from March and April - when oil bubbled to its high - could likely be received by July 12.

      "The announced distributable amount is based on the amount of cash received or expected to be received by the Trustee from the underlying properties on or prior to the record date."

    • It's what the company documents say.
      I too was not aware of this time lag until gpd pointed it out. But reading the references he provided, they do appear to support his position. You are only looking at the date when income is received by the trust and ignoring what they say about the dates of production for that income. Since price would presumably be set at time of production, not at time of payment, the production date is the important one, not date of payment.
      It appears there is up to 4 months delay between production and when MVO receives payment. Read the references gpd posted earlier.

    • Actually the most relevant quote to this argument is buried in the boilerplate of every distribution announcement:

      "The announced distributable amount is based on the amount of cash received or expected to be received by the Trustee from the underlying properties on or prior to the record date."

      Therefore, the distribution is not necessarily based on the expiry of any specific monthly or quarterly cutoff - just whatever cash the trust expects to have on the record date.

    • In a few days we'll see who's right. If I'm wrong, I'll be the first to admit it.

    • gpd, you and liza are lucky! You're both absolutely clueless on how your investment derives it's quarterly distribution, yet you are going to get a pleasant surprise shortly.

      The JAN 7 8-K clearly includes the one-time semgroup payment and the $750k return of cap-ex provision, yet you've choosen to add those two amounts to the APRIL 8-K so that you can justify the higher distribution in April. Here is the JAN 7 8-K:


      Austin, Texas, January 7, 2011 — MV Oil Trust (NYSE Symbol — MVO) announced the Trust distribution of Net Profits for the fourth quarterly payment period ended December 31, 2010.

      Unitholders of record on January 18, 2011 will receive a distribution amounting to $7,762,500 or $0.675 per unit payable January 25, 2011.

      Volumes, price and Net Profits for the payment period were:

      Volume (BOE) 235,300
      Proceeds (BOE) $67.91
      Gross Proceeds $15,979,596
      Costs $6,990,693
      Net Profits $8,988,903

      Percentage applicable to Trust’s 80% Net Profits Interest $7,191,122

      Decrease in MV Partners’ Reserve for Future $750,000 Capital Expenditures(1)

      Total cash proceeds available for the Trust $7,941,122

      Provision for estimated Trust expenses $(178,622)

      Net cash proceeds available for distribution $7,762,500


      (1) Although MV Partners has released $750,000 reserved for future capital expenditures, it can reserve at any time up to an aggregate of $1.0 million.

      As previously reported, the Trust’s second quarterly distribution included amounts from collections from SemCrude, L.P. and Eaglwing, L.P. for sales of oil during the 20-day period immediately prior to their bankruptcy in July 2008. As also previously reported, Vess Oil Corporation and Murfin Drilling Company, Inc., who are the operators of the underlying properties of MV Partners, LLC, filed proofs of claims in the bankruptcy case on a lease by lease basis on their own behalf and on behalf of various working interest owners (inclusive of MV Partners’ interests), overriding royalty owners and royalty owners. Vess Oil and Murfin Drilling received funds in late September 2010 for the collection of the sale of oil volumes to SemCrude and Eaglwing for the period prior to such 20-day period. Such funds represent the payout on such claims, less certain charges allowed by the bankruptcy court. The gross proceeds amount of $15,979,596 includes $1,274,477 received by MV Partners, LLC in the fourth quarter of 2010 as its allocated portion of the funds received by Vess Oil and Murfin Drilling in late September 2010. Consequently, Proceeds (BOE) also reflects such allocated portion of such funds while Volumes (BOE) represent actual volumes sold during the reporting period.

      This press release contains forward-looking statements. Although MV Partners, LLC has advised the Trust that MV Partners, LLC believes that the expectations contained in this press release are reasonable, no assurances can be given that such expectations will prove to be correct. The announced distributable amount is based on the amount of cash received or expected to be received by the Trustee from the underlying properties on or prior to the record date. Any differences in actual cash receipts by the Trust could affect this distributable amount. Other important factors that could cause these statements to differ materially include the actual results of drilling operations, risks inherent in drilling and production of oil and gas properties, the ability of commodity purchasers to make payment, and other risk factors

    • I believe that MVO prices their oil at WTI pricing. And I agree that July should be good but October will be better.

      Don't forget that April's dividend was $0.675 plus a $0.15 one time payment. The $0.15 was Semgroup settlement and return of cap-ex provision.

      I think the July dividend will be more than $0.675 but not anywhere near the $1.20 that has been talked about.

    • may be the largest to date but will not be fully un-hedged. For that you need to wait till the October distribution.
      The July distribution is based on cash received by the trust during April-June which is for production in Dec 2010 - Feb 2011. That is what MVO's releases state.
      The July distribution should be decent but October will be better due to being fully unhedged plus higher oil prices during the period March-May.
      Does anyone know where they sell their oil...more specifically are they getting WTIC or Louisiana Sweet prices? There's a significant difference.

    • This makes me wonder if we might see some selling pressure when people - to be perfectly honest, until five minutes ago, people like ME - are disappointed that the July distro announcement is much lower than they expected. While I expected something in the $1.05 range, I would be delighted to see an opportunity to get additional shares cheap. GLTA

    • Note 9 clearly states where April's $.82 payment was derived from:

      ------------------------- cut -------------------------
      Note 9—Subsequent Events

      The second quarterly distribution during 2011 was $0.82 per Trust unit and was made on April 25, 2011 to Trust unitholders owning Trust units as of April 15, 2011. Such distribution included the net proceeds of production collected by MV Partners from January 1, 2011 through March 31, 2011.

      --------------------------- paste ---------------------

      Proceeds from Dec Production(Hedged)was received in Jan
      Proceeds from Jan Production (un-Hedged) was received in Feb
      Proceeds from Feb Production (un-Hedged) was received in Mar

      The collection of these three months of proceeds was paid to unit holders on April 25. Since this payout took place on April 25 it will be recorded in the quarter ending June 30 which will be released sometime in Sept.

      Proceeds from Mar Production(un-Hedged)was received in Apr (at $100+ barrel less discount)
      Proceeds from Apr Production (un-Hedged) was received in May (at $100+ barrel less discount)
      Proceeds from May Production (un-Hedged) was received in Jun (at $100+ barrel less discount)

      The collection of these three months of proceeds WILL BE paid to unit holders on/or about July 28. This payout will be recorded in the quarter ending Sept 30 which will be released sometime in Dec/Jan.

      Based on previous volumes and cost, distribution should be in the $1.10 - $1.15 range.

      • 2 Replies to coach_63a
      • Like the other poster is saying, your reference says COLLECTED between Jan-March. It does not say for production during those months.

        This earlier quote (see below) posted in the previous thread does seem to imply that there is a 4 month delay between production and collection of receipts. I haven't researched this myself but based on the posted quotes, it sounds like gpd has it correct (assuming pricing is determined at time of production). Not that it matters too much...we will get the higher rate next time if not this time.

        "The cash received by the Trust from MV Partners during the quarter ended March 31, 2011 substantially represents the production by MV Partners from September 2010 through November 2010."

      • "Such distribution included the net proceeds of production collected by MV Partners from January 1, 2011 through March 31, 2011."

        This tells me that its the money they received during Jan-Mar, not the production of Jan-Mar.

        Guess we'll see who's right.

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