History
Floated in 2011 with SandRidge's Andrews County royalties, the Trust was delisted in 2020, forced to dissolve in 2021, and sold its remaining royalty interests to Montare.
2011: Listing and IPO
SandRidge Permian Trust was created to hold perpetual royalty interests (a right to a share of production) in oil and gas properties in Andrews County, Texas, which SandRidge's subsidiary contributed. On August 9, 2011 the New York Stock Exchange cleared its securities for listing. On August 12 the Trust and SandRidge signed an underwriting agreement to sell 30,000,000 common units at $18.00 each, with an option for 4,500,000 more. The IPO closed on August 16 with 34,500,000 common units sold. In exchange for the royalty interests, SandRidge's subsidiaries received 4,875,000 common units, 13,125,000 subordinated units and about $584 million of net IPO proceeds. SandRidge also agreed to a drilling obligation, a hedging arrangement through March 31, 2015, and a $300,000 annual administrative services fee.
2012-2019: A change of sponsor
The record is quiet for these years. The next major event came on November 1, 2018, when SandRidge sold all its interests in the underlying properties, and all its Trust units, to Avalon Energy, LLC. Avalon took over SandRidge's obligations under the Trust Agreement and the Administrative Services Agreement. The Trust said it expected to continue without disruption. This ended SandRidge's role set up at the IPO.
2019-2020: Delisting and a bid
On December 27, 2019 the NYSE warned that the average unit price had been below $1.00 over 30 trading days. The Trust had six months to recover and said it would not attempt a reverse split. It did not regain compliance by September 5, 2020, so the NYSE suspended trading and began delisting. The units moved to the OTC Pink market, a less liquid venue, as 'PERS'.
In October 2020 PEDEVCO's subsidiary, SRPT Acquisition, LLC, made an unsolicited offer of 0.4 PEDEVCO share per unit. The Trustee took no position. Also in October, Avalon sold wells to Montare Resources I, LLC for about $4.9 million, and the Trust released part of its royalty interests. These were about 32% of the interests' fair value but about 76% of August 2020 production. Montare had been buying Trust units in the market.
2021: Dissolution and sale
Avalon had failed to pay about $4.65 million due in May 2020. On March 1, 2021 it agreed to repay that sum with interest, starting with $984,375 from the February distribution. Meanwhile an arbitration panel ruled on February 25, 2021 that the Trust must dissolve, because cash available for distribution was about $2.4 million over four quarters, below the $5.0 million threshold. Winding up began after February 26.
On June 18, 2021 the Trust sold all its remaining royalty interests to Montare for $6,000,000. Montare, already a holder of about 9.4% of the units and with a support agreement with Avalon, is a related party. Montare also agreed to pay about $3.2 million to take over the Trust's claim on Avalon, which had paid $1,352,875. The proceeds, less expenses and reserves, were to be distributed in August 2021, with no regular distributions after that. On September 9, 2021 the Trust terminated the registration of a class of its securities, ending its reporting obligation for them.
Written from the 12 story beats below (2011 to 9 Sept 2021), which come from the company's own announcements and filings.