Amadeusz Juskowiak

Lle royalty lrt revenues may be escrowed

LL and E Royalty Trust said Louisiana Land and Exploration Co LLX the working interest owner for its oil and natural gas properties is entitled to start placing all or part of the revenues that would otherwise accrue to the trust

LL and E said Louisiana Land has not yet escrowed any amounts and will monitor the siutuation to determine the necessity of doing so The trust said If the working interest owner does begin to escrow funds the effect on the royalties paid to the trust would be significant Royalties from the properties are the trusts only source of income

The trust said independent petroleum engineers preliminary annual estimates of future net revenues and the discounted present value of future net revenues from proved oil and natural gas reserves attributable to properties in which the trust has an interest are off 64 pct and 56 pct respectively from those estimated in 1986 due to the drop in oil and natural gas prices

It said however that oil and natural gas reserves have actually increased in physical amount The cost estimates reflect prices and costs only through September 30

The trust said using the September figures the engineers determined estimated future net revenues to the trust from total proved reserves of about 57 mln dlrs Usingprices received in January 1987 however it said the estimate would have been about 87 mln dlrs LL and E noted that there has been some weakening in prices since January

The trust said the most significant portion of the drop in estimated future revenues cale from the Jay Field in Alabama and Florida a fall to seven mln dlrs from 92 mln dlrs in 1986 as prices recieved from Jay in September were near production costs after expenses of nitrogen injection