SandRidge Mississippian Trust II (SDR) (SDRMU) announced
in late January 2020 it would dissolve by the end of 2020.
SDR owns oil and natural gas royalty interests in the
Mississippian formation of southern Kansas and northern Oklahoma. These
interests entitle SDR to royalty payments out of the income from 273 oil and
gas wells drilled by SandRidge Energy (SD), the trust’s sponsor. Most of this royalty
income is then distributed to the owners of the trust’s units (shares).
Once the trust is dissolved, SandRidge Mississippian Trust
II’s unitholders will not get any more distributions. This will leave many of
them, including investors who bought units in the trust’s IPO, with a large
loss on their investment. This loss offers important lessons for future
investors, especially investors in IPOs, the oil and gas industry, and in high
yield stocks. (Read More)
