| Delaware (State or other jurisdiction of incorporation or organization) | | | 27-6522024 (I.R.S. Employer Identification No.) | |
| The Bank of New York Mellon Trust Company, N.A., Trustee Global Corporate Trust 601 Travis Street, 16th Floor Houston, Texas (Address of principal executive offices) | | | 77002 (Zip Code) | |
| Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | | Smaller reporting company ☒ | | | Emerging growth company ☐ | |
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| PART I | | | | | | | | |||
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| PART II | | | | | | | | |||
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| PART III | | | | | | | | |||
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| PART IV | | | | | | | | |||
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| | | | | A-1 | | |
Proved reserves | | Proved Gas Reserves (MMcf) | | Estimated Future Net Cash Flows | | Discounted Estimated Future Net Cash Flows(1) | | | Proved Gas Reserves (MMcf) | | Estimated Future Net Cash Flows | | Discounted Estimated Future Net Cash Flows(1) | | ||||||||||||||||||||||||
| | (Dollars in thousands) | | | | | | | | (Dollars in thousands) | | |||||||||||||||||||||||||||
Royalty Interests: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Proved Developed | | | | 23,059 | | | | $ | 114,019 | | | | $ | 58,193 | | | | | | 19,803 | | | | $ | 25,990 | | | | $ | 14,004 | | |
| | High | | Low | | | High | | Low | | ||||||||||||||||
Calendar Quarter 2023 | | | | | | | | | | | | |||||||||||||||
First Quarter | | | $ | 2.05 | | | | $ | 1.17 | | | |||||||||||||||
Second Quarter | | | $ | 1.48 | | | | $ | 1.10 | | | |||||||||||||||
Third Quarter | | | $ | 1.18 | | | | $ | 0.67 | | | |||||||||||||||
Fourth Quarter | | | $ | 0.79 | | | | $ | 0.34 | | | |||||||||||||||
Calendar Quarter 2022 | | | | | | | | | | | | | | | | | | | | | | | ||||
First Quarter | | | $ | 1.54 | | | | $ | 0.63 | | | | | $ | 1.54 | | | | $ | 0.63 | | | ||||
Second Quarter | | | $ | 3.32 | | | | $ | 1.46 | | | | | $ | 3.32 | | | | $ | 1.46 | | | ||||
Third Quarter | | | $ | 3.50 | | | | $ | 1.29 | | | | | $ | 3.50 | | | | $ | 1.29 | | | ||||
Fourth Quarter | | | $ | 2.91 | | | | $ | 2.03 | | | | | $ | 2.91 | | | | $ | 2.03 | | | ||||
Calendar Quarter 2021 | | | | | | | | | | | | |||||||||||||||
First Quarter | | | $ | 0.40 | | | | $ | 0.19 | | | |||||||||||||||
Second Quarter | | | $ | 0.55 | | | | $ | 0.27 | | | |||||||||||||||
Third Quarter | | | $ | 0.72 | | | | $ | 0.47 | | | |||||||||||||||
Fourth Quarter | | | $ | 1.05 | | | | $ | 0.46 | | |
| | | | Valuation of | |
| Description of the Matter | | | At December 31, | |
| | | | circumstances indicate that its carrying amount may not be recoverable, pursuant to Accounting Standards Codification 360, Property, Plant and Equipment (“ASC 360”). The Trust determines whether an impairment charge is necessary |
to its investment in the Auditing | | ||||
| How We Addressed the Matter in Our Audit | | | To test the | |
| | | 2022 | | | 2021 | | ||||||
ASSETS: | | | | | | | | | | | | | |
Cash | | | | $ | 2,169,420 | | | | | $ | 1,703,483 | | |
Royalty income receivable | | | | | 2,387,846 | | | | | | 2,636,468 | | |
Royalty interest in gas properties | | | | | 352,100,000 | | | | | | 352,100,000 | | |
Accumulated amortization | | | | | (339,477,839) | | | | | | (338,156,565) | | |
Net royalty interest in gas properties | | | | | 12,622,161 | | | | | | 13,943,435 | | |
Total Assets | | | | $ | 17,179,427 | | | | | $ | 18,283,386 | | |
LIABILITIES AND TRUST CORPUS: | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Distributions payable to unitholders | | | | $ | 2,187,332 | | | | | $ | 2,390,496 | | |
Trust corpus; 17,605,000 common units authorized, issued and outstanding | | | | | 14,992,095 | | | | | | 15,892,890 | | |
Total Liabilities and Trust Corpus | | | | $ | 17,179,427 | | | | | $ | 18,283,386 | | |
| | | 2023 | | | 2022 | | ||||||
ASSETS: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 2,660,054 | | | | | $ | 2,169,420 | | |
Royalty income receivable | | | | | 686,504 | | | | | | 2,387,846 | | |
Royalty interest in gas properties | | | | | 352,100,000 | | | | | | 352,100,000 | | |
Accumulated amortization | | | | | (340,685,825) | | | | | | (339,477,839) | | |
Net royalty interest in gas properties | | | | | 11,414,175 | | | | | | 12,622,161 | | |
Total Assets | | | | $ | 14,760,733 | | | | | $ | 17,179,427 | | |
LIABILITIES AND TRUST CORPUS: | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | |
Distributions payable to unitholders | | | | $ | 524,350 | | | | | $ | 2,187,332 | | |
Trust corpus; 17,605,000 common units authorized, issued and outstanding | | | | | 14,236,383 | | | | | | 14,992,095 | | |
Total Liabilities and Trust Corpus | | | | $ | 14,760,733 | | | | | $ | 17,179,427 | | |
| | Year Ended December 31, 2022 | | Year Ended December 31, 2021 | | | Year Ended December 31, 2023 | | Year Ended December 31, 2022 | | ||||||||||||||||
Royalty income | | | $ | 11,622,745 | | | | $ | 6,295,004 | | | | | $ | 2,884,833 | | | | $ | 11,622,745 | | | ||||
Net proceeds to Trust | | | $ | 11,622,745 | | | | $ | 6,295,004 | | | | | $ | 2,884,833 | | | | $ | 11,622,745 | | | ||||
General and administrative expense | | | | (1,123,128) | | | | | (1,107,241) | | | | | | (1,169,560) | | | | | (1,123,128) | | | ||||
Interest income | | | | 34,227 | | | | | 162 | | | | | | 119,685 | | | | | 34,227 | | | ||||
Income available for distribution prior to cash reserves | | | | 10,533,844 | | | | | 5,187,925 | | | | | | 1,834,958 | | | | | 10,533,844 | | | ||||
Cash reserves withheld by Trustee | | | | (404,389) | | | | | (419,061) | | | | | | (360,000) | | | | | (404,389) | | | ||||
Interest withheld on cash reserves | | | | (17,096) | | | | | (106) | | | | | | (88,573) | | | | | (17,096) | | | ||||
Distributable income available to unitholders | | | $ | 10,112,359 | | | | $ | 4,768,758 | | | | | $ | 1,386,385 | | | | $ | 10,112,359 | | | ||||
Distributable income per common unit (17,605,000 units authorized and outstanding for 2022 and 2021) | | | $ | 0.574 | | | | $ | 0.271 | | | |||||||||||||||
Distributable income per common unit (17,605,000 units authorized and outstanding for 2023 and 2022) | | | $ | 0.079 | | | | $ | 0.574 | | |
| | Year Ended December 31, 2022 | | Year Ended December 31, 2021 | | | Year Ended December 31, 2023 | | Year Ended December 31, 2022 | | ||||||||||||||||
Trust Corpus, Beginning of Period | | | $ | 15,892,890 | | | | $ | 17,133,939 | | | | | $ | 14,992,095 | | | | $ | 15,892,890 | | | ||||
Cash reserves withheld, including interest | | | | 421,485 | | | | | 419,167 | | | | | | 448,573 | | | | | 421,485 | | | ||||
Distributable income | | | | 10,112,359 | | | | | 4,768,758 | | | | | | 1,386,385 | | | | | 10,112,359 | | | ||||
Distributions paid or payable to unitholders | | | | (10,113,365) | | | | | (4,775,745) | | | | | | (1,382,683) | | | | | (10,113,365) | | | ||||
Amortization of royalty interest in gas properties | | | | (1,321,274) | | | | | (1,653,299) | | | | | | (1,207,987) | | | | | (1,321,274) | | | ||||
Impairment of royalty interest in gas properties | | | | — | | | | | — | | | | | | — | | | | | — | | | ||||
Trust Corpus, End of Period | | | $ | 14,992,095 | | | | $ | 15,892,890 | | | | | $ | 14,236,383 | | | | $ | 14,992,095 | | |
| | | Natural Gas (MMcf) | | |||
Balance at January 1, | |||||||
| | | | 24,729 | | | |
Revisions of previous estimates | | | | | 673 | | |
Production | | | | | (2,343) | | |
Balance at December 31, 2022 | | | | | 23,059 | | |
Revisions of previous estimates | | | | | (1,049) | | |
Production | | | | | (2,207) | | |
Balance at December 31, 2023 | | | | | 19,803 | | |
| | | 2022 | | | 2021 | | ||||||
Future cash inflows | | | | $ | 135,464 | | | | | $ | 82,810 | | |
Future production costs | | | | | (21,445) | | | | | | (23,492) | | |
Future net cash flows before discount | | | | | 114,019 | | | | | | 59,318 | | |
10% discount to present value | | | | | (55,826) | | | | | | (28,190) | | |
Standardized measure of discounted future net cash flows(1) | | | | $ | 58,193 | | | | | $ | 31,128 | | |
| | | 2023 | | | 2022 | | ||||||
Future cash inflows | | | | $ | 38,466 | | | | | $ | 135,464 | | |
Future production costs | | | | | (12,476) | | | | | | (21,445) | | |
Future net cash flows before discount | | | | | 25,990 | | | | | | 114,019 | | |
10% discount to present value | | | | | (11,986) | | | | | | (55,826) | | |
Standardized measure of discounted future net cash flows(1) | | | | $ | 14,004 | | | | | $ | 58,193 | | |
| Standardized measure, January 1, 2021 | | | | $ | 8,731 | | |
| Net proceeds to the Trust | | | | | (6,295) | | |
| Revisions of previous estimates | | | | | 3,013 | | |
| Accretion of discount | | | | | 873 | | |
| Net change in price and production cost | | | | | 20,310 | | |
| Other | | | | | 4,496 | | |
| Standardized measure, December 31, 2021 | | | | $ | 31,128 | | |
| Net proceeds to the Trust | | | | | (11,623) | | |
| Revisions of previous estimates | | | | | 1,699 | | |
| Accretion of discount | | | | | 3,113 | | |
| Net change in price and production cost | | | | | 28,315 | | |
| Other | | | | | 5,561 | | |
| Standardized measure, December 31, 2022 | | | | $ | 58,193 | | |
| Standardized measure, January 1, 2022 | | | | $ | 31,128 | | |
| Net proceeds to the Trust | | | | | (11,623) | | |
| Revisions of previous estimates | | | | | 1,699 | | |
| Accretion of discount | | | | | 3,113 | | |
| Net change in price and production cost | | | | | 28,315 | | |
| Other | | | | | 5,561 | | |
| Standardized measure, December 31, 2022 | | | | $ | 58,193 | | |
| Net proceeds to the Trust | | | | | (2,885) | | |
| Revisions of previous estimates | | | | | (742) | | |
| Accretion of discount | | | | | 5,819 | | |
| Net change in price and production cost | | | | | (37,878) | | |
| Other | | | | | (8,503) | | |
| Standardized measure, December 31, 2023 | | | | $ | 14,004 | | |
| | 2022 | | 2021 | | | 2023 | | 2022 | | ||||||||||||||||
Audit fees(1) | | | $ | 171,500 | | | | $ | 156,000 | | | | | $ | 178,500 | | | | $ | 171,500 | | | ||||
Audit-related fees | | | | — | | | | | — | | | | | | — | | | | | — | | | ||||
Tax fees | | | | 205,000 | | | | | 205,000 | | | | | | 205,000 | | | | | 205,000 | | | ||||
All other fees | | | | — | | | | | — | | | | | | — | | | | | — | | | ||||
Total fees | | | $ | 376,500 | | | | $ | 361,000 | | | | | $ | 383,500 | | | | $ | 376,500 | | |
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| | | | ECA MARCELLUS TRUST I | | |||
| | | | By: | | | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee | |
| | | | By: | | | /s/ Sarah Newell Sarah Newell Vice President | |
| | Total Proved Developed Producing | | | Total Proved Developed Producing | | ||||||||
Net Reserves | | | | | | | | | ||||||
Gas – MMcf | | | | 23,059 | | | | | | 19,803 | | | ||
Income Data ($M) | | | | | | | | | | | | | ||
Future Gross Revenue | | | $ | 135,464 | | | | | $ | 38,466 | | | ||
Deductions | | | | 21,445 | | | | | | 12,476 | | | ||
Future Net Income (FNI) | | | $ | 114,019 | | | | | $ | 25,990 | | | ||
Discounted FNI @ 10% | | | $ | 58,193 | | | | | $ | 14,004 | | |
| | Discounted Future Net Income ($M) As of December 31, 2022 | | | Discounted Future Net Income ($M) As of December 31, 2023 | | ||||||||
Discount Rate Percent | | Total Proved | | | Total Proved | | ||||||||
9 | | | $ | 60,928 | | | | | $ | 14,635 | | | ||
12 | | | $ | 53,495 | | | | | $ | 12,912 | | | ||
15 | | | $ | 47,880 | | | | | $ | 11,600 | | | ||
18 | | | $ | 43,462 | | | | | $ | 10,562 | | |
Geographic Area | | | Product | | | Price Reference | | | Average Benchmark Price | | | Average Realized Price | | |||||||||
North America | | | | | | | | | | | | | | | | | | | | | | |
United States | | | | | Gas | | | | Henry Hub | | | | $ | | | | | $ | | |
| | | | /s/ Stephen E. Gardner Stephen E. Gardner, P.E. Colorado License No. 44720 Managing Senior Vice President | | | [SEAL] | |