Reserve Royalty Income Trust (the "Trust") - Working Interest Asset Sale, Corporate Reorganization and Cash Distribution

CALGARY, AB, Dec. 1, 2020 /CNW/ - Mr. Rick (Buck) Braund, Chairman and CEO, and Mr. Randy Best, President & COO, on behalf of the Board of Directors of The Trust, announce the following:

WORKING INTEREST ASSET SALE

Effective October 1, 2020, the Trust completed the sale of the Trust's non-operated, working interest natural gas and liquids production, wells, lands and facilities in the Deep Basin areas of Alberta and British Columbia for cash consideration, before closing adjustments, of $6.1 million, which equates to 5.0x twelve month trailing cash flow. The sale eliminates $6.7 million of future abandonment obligations from the Trust's balance sheet and includes 710 boe/d of non-operated minority interest production and a 6.0% average working interest ownership in the Elmworth gas facility.

RE-FOCUS AS A PURE PLAY ROYALTY TRUST

The Trust, proforma the sale, is in a strong financial position with no debt to re-focus as a low-cost pure play oil and gas royalty Trust with forecasted production of approximately 500 boe/d for 2021 and over 130,000 acres of undeveloped royalty lands.

The working interest asset sale better positions the Trust to execute on strategic value-add royalty income opportunities and facilitates the re-organization of the business to reduce administrative costs. The sale also improves the Trust's ability to be positioned in the A&D oil and gas royalty market as a "consolidation" target.

As part of the re-organization to a pure play royalty Trust, the Trust announces the retirement of Mr. Randy Best from the position of President & COO. Mr. Best was a founding officer of the Trust alongside Mr. Braund who stated that "Reserve Royalty has been very fortunate to have Randy serve as the President since inception of the Trust. He has been a highly effective executive and business partner and we will miss his strong daily leadership but look forward to his continued counsel in his ongoing capacity as a director of the Trust."

DISTRIBUTION

The Board of Directors declares a distribution of Cdn. $0.005 per unit to be paid on December 31, 2020 to unitholders of record on December 15, 2020. We anticipate re-instituting the quarterly distribution program in the first quarter of 2021 subject to market conditions and Board approval.

SOURCE Reserve Royalty Income Trust

For further information, please contact: Rick (Buck) Braund, Chairman & CEO, telephone: [phone], email. [email protected] or Mark Munro, CFO, telephone: [phone], email. [email protected]

Related Links

http://reserveroyalty.ca/