SandRidge Mississippian Trust I (OTCMKTS:SDTTU) is a statutory trust formed in November 2013 through an initial public offering sponsored by SandRidge Energy, Inc. The trust was established to own overriding royalty interests in a defined portfolio of oil and natural gas properties located in the Mississippian formation of the Anadarko Basin. Units of the trust are traded on the OTC Markets, allowing investors to participate in cash distributions generated from hydrocarbon production without direct operational involvement.
The trust’s primary business activity is the collection and distribution of net profits from the production of oil and gas derived from its acreage interests. SandRidge Mississippian Trust I holds overriding royalty interests generally ranging from 1 % to 3 % on a lease-by-lease basis. Revenues are generated when hydrocarbons are produced, sold and processed, after which operating expenses are deducted and the remaining cash is distributed to unitholders on a quarterly basis.
Properties underlying the trust’s interests are concentrated in Kingfisher, Canadian, Garfield and Blaine counties in west-central Oklahoma. This area is notable for its extensive development of horizontal drilling and hydraulic fracturing techniques in the Mississippian formation, which has bolstered production levels and extended the economic life of these wells. While production volumes may fluctuate with commodity prices and well performance, the trust structure ensures that unitholders benefit directly from royalty receipts.
The trust is managed by an independent trustee, which oversees financial and administrative matters on behalf of unitholders. As a passive mineral interest vehicle, SandRidge Mississippian Trust I does not engage in exploration, drilling or day-to-day field operations. The trust is designed to continue distributions until the underlying royalty interests are depleted or legal interests expire, at which point the trust will be dissolved and any remaining proceeds distributed to holders of record.
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