Torch Energy Royalty Trust Announces 1997 Year-End Reserves
HOUSTON, March 27 /PRNewswire/ -- Torch Energy Royalty Trust (NYSE: TRU - news) announced today that 1997 year-end reserves were 42.0 billion cubic feet equivalent (BCFE) compared to 1996 year-end reserves of 58.2 BCFE. The reduction in reported reserves is composed of 1997 production of 7.5 BCFE and a negative reserve revision of 8.7 BCFE. The Trust's 8.7 BCFE reserve revision, composed primarily of revisions to the Chalkley Field (3.8 BCFE) and the Cotton Valley Fields (3.6 BCFE), resulted from steeper decline curves used to estimate reserves at year-end 1997.
In addition, a negative reserve revision for the Robinson's Bend Field (1.0 BCFE) was attributable to lower year-end 1997 pricing. The December 1997 year-end NYMEX price for natural gas was $2.68 per MMBtu, compared to $3.70 for the same period in 1996. The Trust's interest in the Robinson's Bend Field does not bear operating costs until 2003, at which time cash flows from the Robinson's Bend Field will be reduced substantially by the deduction of such operating expenses. Beginning in 2003, if natural gas prices do not substantially exceed prices received at year-end 1997, the Trust anticipates that all of the cash flows from the Trust's interest in the Robinson's Bend properties will be used to pay operating expenses and, as a result, the Trust will not receive net profits payments attributable to it's interest in the Robinson's Bend Field.
The Royalty Trust's properties are depleting assets consisting of net profits interests in proved developed oil and gas properties located in Texas, Alabama and Louisiana. Approximately 97% of the estimated reserves are gas.
Torch Energy Advisors Incorporated, the administrative agent for the Royalty Trust, is an employee-owned company headquartered in Houston, Texas that provides outsourcing services to the energy industry. Included are: administrative accounting and financial services; upstream and mid-stream property operations; exploration and exploitation services; corporate and property acquisitions, due diligence and divestitures; and hydrocarbon marketing and risk management. In addition, Torch provides capital in the form of debt and equity to independent producers for acquisition and development opportunities through Torch Energy Finance Company. Through its majority owned subsidiary, The Procurement Centre, Torch provides complete procurement services.
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurances that certain projections will be achieved. Such forward-looking statements include, without limitation, estimates with respect to the future year-end NYMEX price, future reserves and production levels. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are referenced in the Trust's annual report and 10-K for year-end 1997 and current reports including the 1993 offering prospectus filed with the Securities and Exchange Commission.
SOURCE: Torch Energy Royalty Trust |
