HOUSTON--(BUSINESS WIRE)--Dec. 22, 1998--Freeport-McMoRan Oil and Gas Royalty Trust (NYSE:FMR) announced that the Trust has received notices from Unitholders certifying they own in excess of 10% of the Trust's units and requesting that the Trustee call a special meeting of Unitholders. The Trustee expects to receive a written shareholder proposal to be voted on at the special meeting. The notice indicates that the matter to be proposed for action at the meeting will be to "consider and vote upon a proposal to amend the royalty Trust Indenture to change Section 3.02(b), regarding the number of successive years in which cash per year received by the Trust is calculated to determine whether the Trustee of the Trust must sell the Trust assets, from three successive years to five successive years." Subject to receipt of the shareholders proposal contemplated by the notice, the Trustee will call a special meeting of Unitholders and will solicit proxies from Unitholders in connection with the meeting.
An amendment to the Royalty Trust Indenture requires approval by the vote of holders of a majority of the Units represented at a meeting at which a quorum of Unitholders are present in person or by proxy, and it also requires the express written approval of the Trustee. Based on the Trustee's preliminary understanding of the shareholder proposal to be considered at the special meeting and on the Trustee's preliminary estimates of the likely expenses to be incurred by the Trust if the life of the Trust is extended, the Trustee believes at this time that if the shareholder proposal is approved by the required vote of Unitholders the Trustee will give its written approval.
The Trust also announced that for the month of November, 1998, the Trust's Class A costs exceeded Gross Proceeds by $1,780,658, increasing the cumulative Class A carry-forward to $25,661,295. Accordingly, there will be no distribution for the month of December 1998. In addition, net current month Trust administrative expenses of $7,410 will be paid from the Trust administrative expense reserve resulting in approximately $1.4 million remaining in the expense reserve.
For the month, Gross Proceeds included oil and condensate revenues of approximately $0.4 million and gas revenues of approximately $0.2 million from sales volumes of 28,018 barrels and 84,884 mcf, respectively, net to the Trust's interest. Class A costs included approximately $1.7 million of development costs and $0.4 million in operating costs, net to the Trust's interest, both primarily for West Cameron Block 498. |
