Business & Finance
Business and Finance
Business and Finance
Tue, December 23, 2008
Mon, December 22, 2008 Mesa Offshore Trust Announces No Trust Income for December 2008
AUSTIN, Texas--([ BUSINESS WIRE ])--Mesa Offshore Trust (OTCBB:MOSH) announced that there will be no Trust income distribution for the month of December 2008 for Unitholders of record on December 31, 2008.
The Trust did not receive any Royalty income from the Working Interest Owner for the month of December 2008. On December 18, 2008, the Working Interest Owner informed the Trustee that there is no longer a deficit balance due for abandonment accrual for amounts expended and for projected future abandonment expenses for the properties in which the Trust has an interest. No Royalty income will be distributed to Unitholders until JPMorgan Chase Bank, N.A., in its capacity as Trustee (the "Trustee"), recoups Trust expenses being paid from the reserve that the Trustee has established for anticipated future expenses. As of December 22, 2008, approximately $4.0 million will be withheld by the Trustee from future Royalty income before Trust distributions to the Unitholders will resume. Trust expenditures for the month of December 2008 will be approximately $88,000. On December 3, 2007, the Trust entered into an Amended and Restated Promissory Note with JPMorgan Chase Bank, N.A. as lender (the "Lender"), which amended the Demand Promissory Note (the "Demand Note") dated September 28, 2007, relating to demand loans that may be advanced by the Lender from time to time in the principal amount of up to $3 million. On August 25, 2008, the Trustee executed an amended and restated Demand Note that among other things increased the aggregate principal amount available for borrowing to $4 million. The demand loans bear interest at the prime rate plus 2%, provided such rate shall in no event exceed the maximum legal rate of interest permitted by applicable law. As of December 22, 2008, approximately $3,544,000 had been advanced to the Trustee for Trust expenses under this Demand Note and the Trust had unpaid expenses of approximately $239,000.
The extent of future distributions from the properties in which the Trust has an interest will continue to be dependent on normal factors associated with oil and gas operations such as oil and gas production levels, prices and associated cost, accruals for future abandonment costs, timing and extent of capital expenditures.
