ECA Marcellus Trust I Announces Quarterly Distribution
MWN-AI** Summary
ECA Marcellus Trust I (OTC Pink: ECTM) has announced a per-unit distribution of $0.020 for the quarter ending June 30, 2025. Expected to be paid on or before August 29, 2025, this distribution will be allocated to shareholders who are on record as of August 25, 2025. Since 2019, the Trust has been strategically building a cash reserve to cover future expenses and liabilities by setting aside funds from its quarterly distributions.
In November 2021, the Trustee decided to raise the targeted cash reserve from approximately $1.8 million to $3.8 million. Initially, from Q1 2019 to Q4 2022, it withheld $90,000 or 10% of the quarterly distribution to reach the initial target. Now that the initial goal has been met, the Trust will withhold $90,000 each quarter until reaching the new target of $3.8 million. This cash reserve might be adjusted at the Trustee's discretion without prior notice to unitholders.
The Trust holds royalty interests in natural gas properties managed by Greylock Energy LLC in Pennsylvania’s Marcellus Shale. The distributions’ amounts vary based on fluctuating natural gas prices, production proceeds, and operational costs, which are influenced by external market factors. Low prices can reduce proceeds, leading to lower or no distributions.
Additionally, the Trust’s distributions are subject to U.S. taxation regulations, especially for non-U.S. investors. Forward-looking statements regarding future distribution amounts underscore the inherent risk involving changing market conditions and operational expenses. Unitholders are encouraged to review the Trust's annual reports and filings for comprehensive risk disclosures.
MWN-AI** Analysis
ECA Marcellus Trust I (OTC Pink: ECTM) recently announced a quarterly distribution of $0.020 per unit for the period ending June 30, 2025, which shows a stable, albeit modest cash return for unitholders. As investors consider the implications of this distribution, several important factors should be noted.
First, the Trust has been diligently building a cash reserve, now targeted at approximately $3.8 million. This conservative approach reflects an acknowledgment of the volatility inherent in the natural gas market. Since distributions may fluctuate based on the performance of Greylock Energy LLC and prevailing natural gas prices, this cash reserve strategy suggests the Trustee prioritizes long-term sustainability. The steady withholding of $90,000 from distributions reinforces this praiseworthy fiscal discipline.
However, potential investors and existing unitholders must remain cognizant of the volatile nature of natural gas prices, directly impacting future distributions. Recent market trends indicate increasing pressure on energy prices due to geopolitical tensions and shifting demand dynamics. This could lead to periods where distributions may be reduced or wholly suspended.
Moreover, the Trust's classification as a publicly traded partnership (PTP) affects non-U.S. unitholders substantially through higher withholding tax rates, which could deter foreign investment or affect overall returns for non-resident investors.
In summary, while ECA Marcellus Trust I’s distribution gives a nod to cash flow stability and active reserve management, prospective investors should carefully weigh the risks of commodity price volatility and tax implications when considering exposure to this trust. Monitoring energy market trends and the Trust's ongoing reserve policy will be critical for informed investment decisions moving forward.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
ECA MARCELLUS TRUST I (OTC Pink: ECTM) announced today that the Trust’s distribution for the quarter ended June 30, 2025, will be $0.020 per unit, which is expected to be distributed on or before August 29, 2025, to holders of record as of the close of business on August 25, 2025.
Since the first quarter of 2019, the Trustee has been gradually building a cash reserve for the payment of future known, anticipated or contingent expenses or liabilities of the Trust by withholding cash reserve amounts from each quarterly distribution. In November 2021, the Trustee notified Greylock Energy LLC that the Trustee had determined to increase the targeted cash reserve from the initially stated amount of approximately $1.8 million, to approximately $3.8 million. From the first quarter of 2019 through the fourth quarter of 2022, the Trustee withheld an amount from each distribution equal to the greater of $90,000 or 10% of the funds otherwise available for distribution each quarter. Since achieving the initial target of $1.8 million in the quarter ended December 31, 2022, the Trustee has been withholding, and currently plans to continue to withhold, $90,000 per quarter until a total of approximately $3.8 million in cash reserves is withheld. The Trustee may increase or decrease the targeted amount at any time and may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested as required by the trust agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities of the Trust eventually will be distributed to unitholders, together with interest earned on the funds. The Trustee has elected to withhold approximately $90,000 this quarter.
The Trust was formed to own royalty interests in natural gas properties now held by Greylock Energy LLC and certain of its wholly owned subsidiaries (“Greylock”) in the Marcellus Shale formation in Greene County, Pennsylvania. The Trust is entitled to receive certain amounts of the proceeds attributable to Greylock’s interest in the sale of production from the properties. As described in the Trust's filings, the amount of the quarterly distributions is expected to fluctuate from quarter to quarter, depending on the proceeds received by the Trust as a result of production and natural gas prices and the amount of the Trust's administrative expenses, among other factors. The amount of proceeds received or expected to be received by the Trust (and its ability to pay distributions) has been and will continue to be directly affected by the volatility in commodity prices, which are subject to a variety of factors that are beyond the control of the Trust or Greylock. Low natural gas prices will reduce proceeds to which the Trust is entitled, which will reduce the amount of cash available for distribution to unitholders and in certain periods could result in no distributions to unitholders.
Pursuant to Section 1446 of the Internal Revenue Code of 1986 (the “IRC”), withholding tax on income effectively connected to a United States trade or business allocated to non-U.S. persons (“ECI”) should be made at the highest marginal rate. Under IRC Section 1441, withholding tax on fixed, determinable, annual, periodic income from United States sources allocated to non-U.S. persons should be made at a 30% rate unless the rate is reduced by treaty. Nominees and brokers should withhold at the highest marginal rate on the distribution made to non-U.S. persons. The Tax Cuts and Jobs Act (the “TCJA”), enacted in December 2017, treats a non-U.S. holder’s gain on the sale of Trust units as ECI to the extent such holder would have had ECI if the Trust had sold all of its assets at fair market value on the date of the exchange. The TCJA also requires a transferee of units to withhold 10% of the amount realized on the sale of exchange of units (generally, the purchase price) unless the transferor certifies that it is not a nonresident alien individual or foreign corporation, or other exception is available. Pursuant to final Treasury Regulations issued in 2020, this withholding obligation applies to transfers of units in publicly traded partnerships such as the Trust (which is classified as a partnership for federal and state income tax purposes) occurring on or after January 1, 2022. This release is intended to be a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b) by ECA Marcellus Trust I, and while specific relief is not specified for Section 1441 income, this disclosure is intended to suffice.
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical facts, are "forward-looking statements" for purposes of these provisions. These forward-looking statements include the amount and date of any anticipated distribution to unit holders. The anticipated distribution is based, in part, on the amount of cash received or expected to be received by the Trust from Greylock with respect to the relevant quarterly period. Any differences in actual cash receipts by the Trust could affect this distributable amount. Other important factors that could cause actual results to differ materially include expenses of the Trust and reserves for anticipated future expenses. Statements made in this press release are qualified by the cautionary statements made in this press release. Neither Greylock nor the Trustee intends, and neither assumes any obligation, to update any of the statements included in this press release. An investment in Common Units issued by ECA Marcellus Trust I is subject to the risks described in the Trust's Annual Report on Form 10-K for the year ended December 31, 2024, and all of its other filings with the Securities and Exchange Commission. The Trust's annual, quarterly and other filed reports are or will be available over the Internet at the SEC's web site at http://www.sec.gov .
View source version on businesswire.com: https://www.businesswire.com/news/home/20250815175420/en/
ECA Marcellus Trust I
The Bank of New York Mellon Trust Company, N.A., as Trustee
Sarah Newell
1(512) 236-6555
601 Travis Street, 16 th Floor
Houston, TX 77002
FAQ**
How does the fluctuation in natural gas prices impact the distribution amount for ECA Marcellus Trust I Unit ECTM, and what measures are in place to mitigate this risk for unitholders?
What considerations led the Trustee of ECA Marcellus Trust I Unit ECTM to increase the cash reserve target from approximately $1.8 million to $3.8 million, and how might this affect future distributions?
Can you explain the potential implications of Section 1446 and IRC Section 1441 regarding tax withholding for non-U.S. investors in ECA Marcellus Trust I Unit ECTM, especially concerning recent regulatory changes?
What specific forward-looking factors should investors in ECA Marcellus Trust I Unit ECTM monitor that could affect future distributions and the overall financial health of the Trust?
**MWN-AI FAQ is based on asking OpenAI questions about ECA Marcellus Trust I Unit (OTC: ECTM).
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