Cathedral Energy Services Issues Distribution, Reduces Capital Budget
Cathedral Energy Services Income Trust announced that the Trustees have approved a distribution for February 2009 of $0.04 per Trust Unit in the form of cash. This is a decrease of $0.03 per Trust Unit from the Trust's January 2009 distribution. The distribution will be paid on March 16, 2009 to Unitholders of record on February 28, 2009.
In light of the current and forecast market conditions, the Administrator of the Trust's operating entities determined that a reduction in distributions was a prudent measure to manage liquidity, further strengthen the Trust's strong balance sheet and better position itself to take advantage of opportunistic transactions which may present themselves. The Administrator of the Trust reviews the level and nature of distributions (cash, in-kind or a combination of cash and in-kind) on an on-going basis giving consideration to many factors including current performance; historical and future trends in the business and the expected sustainability of those trends; enacted tax legislation which will affect future taxes payable; long-term debt repayments; and maintenance capital expenditures required to sustain performance and future growth capital expenditures.
In addition, recognizing the expected lower activity levels, the Trust has taken several initiatives to improve operating results and further
strengthen its balance sheet. During the fourth quarter of 2008 the approved capital budget of $51.4 million was reduced by approximately $0.6 million with an additional $3.6 million being deferred until 2009, resulting in total capital expenditures of approximately $47.2 million in 2008. The initial 2009 capital budget of $17.0 million together with the $3.6 million deferred from 2008 for a total of $20.6 million has been reduced by $9.5 million to $11.1 million. The revised 2009 capital expenditure program of $11.1 million includes approximately $0.5 million of maintenance capital. In addition, the Trust's operating entities are undertaking a detailed review of all operating costs and general and administrative expenditures and have initiated cost reductions to enhance profitability.