NEW YORK, March 27, 2014 /PRNewswire/ -- Russian Hill
Capital, LP ("Russian Hill"), would like to make investors aware of
new language that The Bank of New York Mellon Trust Company (the
"Trustee") has included in the latest annual report for Whiting
USA Trust I ("WHX" or the
"Trust"). Russian Hill believes that the following new
language from WHX's annual report is an acknowledgement that WHX is
overpriced and that investors bear significant risk: "To
the extent that the Trust units are trading at a price
substantially in excess of the aggregate distributions that may be
reasonably expected to be made prior to the termination of the
Trust, the market price decline in Trust units is likely to include
one or more abrupt substantial decreases." [i]
The only assets that WHX holds are the net profits interest (the
"NPI") in various oil and natural gas properties. The NPI
entitles WHX to receive 90% of the net proceeds from the sale of
9.11 million barrels of oil or oil equivalent ("MMBOE"), meaning
8.20 MMBOE are allocated to the Trust. To date, 7.12 of these
8.20 MMBOE have been produced and sold. Russian Hill
estimates that the proceeds from the sale of the remaining 1.08
MMBOE will be less than $2.10.
Since WHX is currently trading at $5.35, Russian Hill has taken a short position in
WHX and expects that the stock will soon see one of the "abrupt
substantial decreases" that the Trustee has warned about in WHX's
annual report.
Also included in the annual report is the fact that the
expected date of termination of the Trust has advanced to
March 31, 2015 (from June 30, 2015).[ii] This means that
investors will now receive only four (4) more distributions instead
of five (5).
Russian Hill believes the new language in the annual report was
long overdue. The substantial risk of loss that investors
carry should have been highlighted much earlier and more
prominently than in ambiguous disclosure in an annual report.
Acknowledging that investors may be subject to "abrupt substantial
decreases" in the value of their holdings and that they will
receive fewer distributions than they had previously expected are
both pieces of materially significant information that
Russian Hill believes should have been the subject of a press
release and 8-K. Russian Hill encourages investors to contact
the Trustee[iii] and Whiting Petroleum[iv] (WHX's parent company)
for guidance on the value of their shares.
Forward Looking Statements
This press release contains "forward-looking statements."
Generally, the words "anticipate," "believe," "estimate,"
"expect," "intend," "may," "predict," "project," "plan," and
similar expressions identify forward-looking statements.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements to differ materially from any future
results, performance, or achievements expressed or implied by such
forward-looking statement. Consequently, no reliance should
be placed on any forward-looking statements contained herein and
the reader should consider any such forward-looking statements only
as Russian Hill's current beliefs as of the date of this press
release. Even if these beliefs change because of future
events or circumstances, Russian Hill declines any obligation to
publicly update or revise any such forward-looking statements.
[i] WHX 10-K p.9:
http://www.sec.gov/Archives/edgar/data/1417003/000119312514096064/d633645d10k.htm
[ii] WHX 10-K p.9:
http://www.sec.gov/Archives/edgar/data/1417003/000119312514096064/d633645d10k.htm
[iii] Bank of New York Mellon Trust Company (713) 483-6792 or (512)
236-6599
[iv] Whiting Petroleum Corporation (303) 837-1661
SOURCE Russian Hill Capital, LP