1 / 13

MNRTF Future Michigan Department of Natural Resources

MNRTF Future Michigan Department of Natural Resources. Presentation Parameters. The figures presented are projections and estimates based on historical trends. Many factors are outside of the Department’s control and may cause temporary fluctuations. Program Parameters.

rharman
Download Presentation

MNRTF Future Michigan Department of Natural Resources

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MNRTF Future Michigan Department of Natural Resources

  2. Presentation Parameters • The figures presented are projections and estimates based on historical trends. • Many factors are outside of the Department’s control and may cause temporary fluctuations.

  3. Program Parameters • Acquisition of land or rights in land • Development of public recreation facilities • Administration of the fund • Interest and earnings on corpus • Allows expenditure of 1/3 of revenue until corpus reaches $500 million

  4. MNRTF Corpus • As of September 30, 2006 • Corpus: $300.3 million • Stabilization Reserve: $12.2 million • Stabilization reserve was created in 2003 to help ensure the continuity of the MNRTF into the future

  5. Revenue Trends • Natural gas makes up roughly 80% of Michigan’s mineral revenue • Natural gas production is decreasing at a rate of 5 - 6% per year • Currently, prices are ~$6 - $7/mcf, and are projected to remain close to this level in the foreseeable future • Natural gas prices peaked at ~$14/mcf in 2005 after Hurricane Katrina

  6. Gas Production vs. Revenue

  7. Oil Production vs. Revenue

  8. Revenue Trends • Because of the anticipated completion of the Section 29 obligation, the MNRTF is projected to see an increase in expendable mineral revenue (1/3 of total mineral revenue) for application year 2008 projects • Estimated 1/3 of mineral revenue • FY2007: $12,150,900 • FY2008: $18,129,000 • Mineral revenue income to the MNRTF is projected to begin a decline after 2008

  9. Interest and Investment Income • As the corpus of the fund grows, investment income will grow; available investment income is projected to exceed expendable mineral revenue (1/3 total mineral revenue) sometime in the next three years

  10. MNRTF Growth • At current revenue estimates, • Corpus will reach $500 million in the next 10 to 15 years

  11. Estimated Revenue for Projects In this scenario, it is presumed the MNRTF $500 million cap will be reached in FY2016.

  12. Conclusions • The future growth of the MNRTF is closely tied to investment income and the growth of the corpus • Because of the importance of investment income to the amount available for projects, a strong stabilization reserve is essential to mitigate volatility

  13. Thank you Questions?

More Related