A small increase in the price of natural gas contributed in net proceeds to the Trust of $479,091 for this quarter compared to net proceeds to the Trust of $77,767 in the last quarter.
Termination and Liquidation of the Trust
Pursuant to the terms of the Trust Agreement, the Trust will terminate no later than December 31, 2012 or upon the first to occur of certain events, including (i) the disposition by the Trust of all royalty interests; (ii) following an affirmative vote in favor of termination of the Trust by the holders of record of more than 50% of the then outstanding Units; (iii) such time as the ratio of cash received by the Trust with respect to the royalty interests (excluding the effect on cash distributions received by the Trust in respect of the royalty interests of excess capital costs) to administrative costs of the Trust is less than 1.2 to 1.0 for three (3) consecutive calendar quarters, and (iv) March 1 of any calendar year if, based on a reserve report as of December 31 of the prior year, it is determined that, as of such date, the net present value (discounted at 10 percent) of the estimated future net revenues (calculated in accordance with criteria established by the Securities and Exchange Commission) 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 is equal to or less than $30 million. As indicated in the notes to the financial statements of the Trust included in the Trust's most recent annual report on Form 10-K filed with the Securities and Exchange Commission, the 2009 commodity price outlook has resulted in uncertainty regarding the Trust's ability to avoid a termination event pursuant to the terms of the Trust Agreement.
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".
For additional information, including the latest financial reports on Williams Coal Seam Gas Royalty Trust, please visit our website at http://www.wtu-williamscoalseamgastrust.com/.
SOURCE Williams Coal Seam Gas Royalty Trust
