1371782--3/16/2010--MV_Oil

related topics

{interest, director, officer}

{gas, price, oil}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{operation, international, foreign}

{regulation, change, law}

The amounts of the cash distributions by the trust are subject to fluctuation as a result of changes in oil, natural gas and natural gas liquid prices. Actual reserves and future net revenues may be less than current estimates of proved reserves, which could reduce cash distributions by the trust and the value of the trust units. Risks associated with the production, gathering, transportation and sale of oil, natural gas and natural gas liquids could adversely affect cash distributions by the trust. The trust and the public trust unitholders have no voting or managerial rights with respect to MV Partners, the operator of the underlying properties. As a result, public trust unitholders have no ability to influence the operation of the underlying properties. Shortages of oil field equipment, services and qualified personnel available to MV Partners could reduce the amount of cash available for distribution. MV Partners may transfer all or a portion of the underlying properties at any time, subject to specified limitations, and MV Partners may abandon individual wells or properties that it reasonably believes to be uneconomic. Under these circumstances, trust unitholders have no ability to prevent MV Partners from transferring the underlying properties to another operator, even if the trust unitholders do not believe that operator would operate the underlying properties in the same manner as MV Partners. The reserves attributable to the underlying properties are depleting assets and production from those reserves will diminish over time. Furthermore, the trust is precluded from acquiring other oil and natural gas properties or net profits interests to replace the depleting assets and production. The amount of cash available for distribution by the trust will be reduced by the amount of any production and development costs, taxes, costs and payments made with respect to the hedge contracts, capital expenditures and post-production costs. A purchaser's failure to pay MV Partners for purchased production could have a significant adverse impact on MV Partners', which in turn could result in MV Partners not having sufficient net proceeds attributable to the net profits interest for MV Partners to distribute cash to the Trust. The trustee may, under certain circumstances, sell the net profits interest and dissolve the trust prior to the expected termination of the trust. As a result, trust unitholders may not recover their investment. The disposal by the two members of MV Partners of their remaining trust units may reduce the market price of the trust units. The market price for the trust units may not reflect the value of the net profits interest held by the trust. Conflicts of interest could arise between MV Partners and the trust unitholders. The trust is managed by a trustee who cannot be replaced except at a special meeting of trust unitholders. Trust unitholders have limited ability to enforce provisions of the net profits interest. Courts outside of Delaware may not recognize the limited liability of the trust unitholders provided under Delaware law. The operations of the properties comprising the underlying properties may result in significant costs and liabilities with respect to environmental and operational safety matters, which could reduce the amount of cash available for distribution to trust unitholders. Governmental authorities may enact climate change regulations that could increase MV Partners' costs to operate. Regulation of greenhouse gases and climate change could adversely affect trust distributions The operations of the properties comprising the underlying properties are subject to complex federal, state, local and other laws and regulations that could adversely affect the cash distributions to the trust unitholders. The trust's net profits interest may be characterized as an executory contract in bankruptcy, which could be rejected in bankruptcy, thus relieving MV Partners from its obligations to make payments to the trust with respect to the net profits interest. If the financial position of MV Partners degrades in the future, MV Partners may not be able to satisfy its obligations to the trust. The trust's receipt of payments based on the hedge contracts depends upon the financial position of the hedge contract counterparties. A default by any of the hedge contract counterparties could reduce the amount of cash available for distribution to the trust unitholders.

Full 10-K form ▸

1371782--3/16/2010--MV_Oil_Trust