** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q**

 

 

**(MarkOne)**

**    **
| **ý** |   | **QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934** |
|------------|--------|---------------------------------------------------------------------------------------------|

 

**For the quarterly period ended June30, 2002**

 

**OR**

 
| **o** |   | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|--------|----------------------------------------------------------------------------------------------------|

** **

**For thetransition period from                 to**

 

 

**Commission File Number 1-11748**

 

 

**EASTERN AMERICAN NATURAL GAS TRUST**

(Exact name ofregistrant as specified in its charter)

 

 

| **Delaware**                     |   | **36-7034603**      |
|----------------------------------|--------|---------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer    |
| incorporation or  organization)  |   | Identification No.) |

 

 

| **Bank of New York**                                       |
|------------------------------------------------------------|
| **Care of BNY Midwest Trust Company**                      |
| **2 North Lasalle Street**                                 |
| **Chicago, Illinois 60602**                                |
| (Address of principal  executive offices)                  |
| (Zip Code)                                                 |
|                                                       |
| **(312) 827-8553**                                         |
| (Registrant’s telephone  number, including area code) |

 

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports) and (2) has been subjectto such filing requirements for the past 90 days.

 

Yes   ý             No   o

 

As of August 12, 2002, 5,900,000 Units of BeneficialInterest in Eastern American Natural Gas Trust were outstanding.

 

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# **PART I — FINANCIALINFORMATION**

## ** **

## **             ITEM 1.   Financial Statements**

 

**EASTERNAMERICAN NATURAL GAS TRUST**

** **

**STATEMENTSOF DISTRIBUTABLE INCOME**

*(Unaudited)*

 
|                                                                       |   | **Six Months  Ended** |      | **Three  Months Ended** |   |
|----------------------------------------------------------------------------|--------|-----------------------|-----------|-------------------------|--------|
|                                                                       |   | **June 30**           |      | **June 30**             |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
|                                                                       |   | **2002**              |      | **2001**                |   | **2002** |   | **2001** |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Royalty Income                                                             |   | $                     | 3,963,220 |                    | $      | 8,147,876 |   | $ | 2,191,952 |   | $ | 3,840,489 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Operating  Expenses:                                                       |   |                  |      |                    |   |   |   |   |   |
| Taxes on  production and property                                          |   | 271,167               |      | 550,493                 |   | 150,032 |   | 258,760 |   |
| Operating cost  charges                                                    |   | 251,274               |      | 256,554                 |   | 125,637 |   | 128,277 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Total Operating  Expenses                                                  |   | 522,441               |      | 807,047                 |   | 275,669 |   | 387,037 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Net Proceeds to  the Trust                                                 |   | 3,440,779             |      | 7,340,829               |   | 1,916,283 |   | 3,453,452 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| General and  Administrative Expenses                                       |   | (320,465              | )         | (306,687                | )      | (155,015 | ) | (143,750 | ) |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Interest Income                                                            |   | 1,017                 |      | 2,952                   |   | 316 |   | 1,445 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Cash Proceeds on  Sale of Net Profits Interests                            |   | 492,043               |      | 0                       |   | 188,605 |   | 0 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Distributable  Income                                                      |   | $                     | 3,613,374 |                    | $      | 7,037,094 |   | $ | 1,950,189 |   | $ | 3,311,147 |   |
|                                                                       |   |                  |      |                    |   |   |   |   |   |
| Distributable Income  Per Unit (5,900,000units authorized and outstanding) |   | $                     | 0.6124    |                    | $      | 1.1927 |   | $ | 0.3305 |   | $ | 0.5612 |   |

 

 

**The accompanying notes are an integral part of thesefinancial statements.**

 

2

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**EASTERN AMERICAN NATURAL GAS TRUST**

 

**STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS**

 
|                                                            |   | **June 20,  2002** |       | **December  31, 2001** |   |
|-----------------------------------------------------------------|--------|--------------------|------------|------------------------|--------|
|                                                            |   | **(Unaudited)**    |       |                   |   |
|                                                            |   |               |       |                   |   |
| Assets:                                                         |   |               |       |                   |   |
|                                                            |   |               |       |                   |   |
| Cash                                                            |   | $                  | 316        |                   | $      | 1,201 |   |
| Net Proceeds  Receivable                                        |   | 2,104,888          |       | 1,957,988              |   |
| Net Profits  Interests in Gas Properties                        |   | 93,162,180         |       | 93,162,180             |   |
| Accumulated  Amortization                                       |   | (52,200,932        | )          | (49,992,199            | )      |
|                                                            |   |               |       |                   |   |
| Total Assets                                                    |   | $                  | 43,066,452 |                   | $      | 45,129,170 |   |
|                                                            |   |               |       |                   |   |
| Liabilities and  Trust Corpus:                                  |   |               |       |                   |   |
|                                                            |   |               |       |                   |   |
| Trust General  and AdministrativeExpenses Payable               |   | $                  | 155,015    |                   | $      | 172,034 |   |
| Distributions  Payable                                          |   | 1,950,189          |       | 1,787,155              |   |
| Trust Corpus  (5,900,000 Trust Unitsauthorized and outstanding) |   | 40,961,248         |       | 43,169,981             |   |
|                                                            |   |               |       |                   |   |
| Total  Liabilities and Trust Corpus                             |   | $                  | 43,066,452 |                   | $      | 45,129,170 |   |
|                                                                 |        |                    |            |                        |        |  |  |  |  |

 

 

**The accompanying notes are anintegral part of these financial statements.**

 

3

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**EASTERN AMERICAN NATURAL GAS TRUST**

 

**STATEMENT OF CHANGES IN TRUST CORPUS**

*(Unaudited)*

 
|                                                    |   | **Six Months**     |       | **Six Months**     |   |
|---------------------------------------------------------|--------|--------------------|------------|--------------------|--------|
|                                                    |   | **Ended**          |       | **Ended**          |   |
|                                                    |   | **June 30,  2002** |       | **June 30,  2001** |   |
|                                                    |   |               |       |               |   |
| Trust Corpus,  Beginning of Period                      |   | $                  | 43,169,981 |               | $      | 47,650,950 |   |
| Distributable  Income                                   |   | 3,613,373          |       | (7,037,094         | )      |
| Distributions  Payable to Unitholders                   |   | (3,613,373         | )          | 7,037,094          |   |
| Amortization of  Net Profits Interests inGas Properties |   | (2,208,733         | )          | (2,220,866         | )      |
|                                                    |   |               |       |               |   |
| Trust Corpus,  End of Period                            |   | $                  | 40,961,248 |               | $      | 45,430,084 |   |

 

 

**The accompanying notes are anintegral part of these financial statements.**

 

 

4

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**EASTERN AMERICAN NATURAL GAS TRUST**

 

**NOTESTO UNAUDITED FINANCIAL STATEMENTS**

 

NOTE 1.Organization of the Trust

 

The Eastern AmericanNatural Gas Trust (the “Trust”) was formed under the Delaware Business TrustAct pursuant to a Trust Agreement (the “Trust Agreement”) among EasternAmerican Energy Corporation (“Eastern American”), as grantor, Bank of MontrealTrust Company, as Trustee (“Trustee”), and Wilmington Trust Company, asDelaware Trustee (the “Delaware Trustee”). The Trust was formed to acquire and hold net profits interests (the “NetProfits Interests”) created from the working interests owned by EasternAmerican in 650 producing gas wells and 65 proved development well locations inWest Virginia and Pennsylvania (the “Underlying Properties”).  The Net Profits Interests consisted of aroyalty interest in 322 wells and a term interest in the remaining wells andlocations.  Prior to or on May 15, 2013,the Trustee is required to sell the royalty interests and liquidate the Trust.

 

On March 15, 1993,5,900,000 Depositary Units were issued in a public offering at an initialpublic offering price of $20.50 per Depositary Unit.  Each Depositary Unit consists of beneficial ownership of one unitof beneficial interest (“Trust Unit”) in the Trust and a $20 face amountbeneficial ownership interest in a $1,000 face amount zero coupon United StatesTreasury Obligation (“Treasury Obligation”) maturing on May 15, 2013.

 

        Effective May 8, 2000, The Bank of New York acquired thecorporate trust business of the Bank of Montreal Trust Company / HarrisTrust.  Consequently, the Bank of NewYork serves as Trustee.

 

The Net ProfitsInterests are passive in nature, and neither the Trustee nor the DelawareTrustee has management control or authority over, nor any responsibilityrelating to, the operation of the properties subject to the Net ProfitsInterests.  The Trust Agreementprovides, among other things, that the Trust shall not engage in any businessor commercial activity or acquire any asset other than the Net ProfitsInterests initially conveyed to the Trust; the Trustee may establish a reservefor payment of any liability which is contingent, uncertain in amount or thatis not currently due and payable; the Trustee is authorized to borrow fundsrequired to pay liabilities of the Trust, provided that such borrowings arerepaid in full prior to further distributions to Unitholders; and the Trusteewill make quarterly cash distributions to Unitholders from funds of the Trust.

 

NOTE 2.  Basis of Presentation

 

        The information furnished is based upon certain estimates ofproduction for the periods presented and is therefore subject to adjustment infuture periods to reflect actual production for the periods presented.  The information furnished reflects alladjustments which are, in the opinion of the Trustee, necessary for a fairpresentation of the results for the interim periods presented.  The

 

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accompanying financialstatements are unaudited interim financial statements, and should be read inconjunction with the audited financial statements and notes thereto included inthe Trust’s Annual Report on Form 10-K for the year ended December 31, 2001.

 

NOTE 3.  Trust Accounting Policies

 

The Trust servesas a pass-through entity, with items of depletion, interest income and expense,and income tax attributes being based upon the status and elections ofUnitholders.  Thus, the Statements ofDistributable Income show Distributable Income, defined as Trust incomeavailable for distribution to Unitholders before application of thoseUnitholders’ additional expenses, if any, for depletion, interest expense, andincome taxes.  The Trust uses theaccrual basis to recognize revenue, with Royalty Income recognized as reservesare extracted from properties and sold. Expenses are also presented on an accrual basis.  Actual cash receipts will vary from theaccrual of revenues due to, among other reasons, the payment provisions of thegas purchase contract between the Trust and Eastern Marketing Corporation  (a subsidiary of Eastern American), whichrequires payment with respect to gas production for a calendar quarter to bemade to the Trust on or before the tenth day of the third month following suchquarter.

 

Net ProfitsInterests in Gas Properties are periodically assessed to determine whethertheir net capitalized cost is impaired. The Trust will determine if a writedown is necessary to its investmentin the Net Profits Interests in gas properties to the extent that totalcapitalized costs, less accumulated amortization, exceed undiscounted futurenet revenues attributable to proved gas reserves of the UnderlyingProperties.  The Trust will then providea writedown to the extent that the net capitalized costs exceed the discountedfuture net revenues attributable to proved gas reserves of the UnderlyingProperties.   Any such writedown wouldnot reduce distributable income, although it would reduce Trust Corpus.

 

Amortization ofthe Net Profits Interests in Gas Properties is calculated on aunits-of-production basis, whereby the Trust’s cost basis in the properties isdivided by total Trust proved reserves to derive an amortization rate perreserve unit.  Such amortization doesnot reduce distributable income, rather it is charged directly to Trust Corpus.

 

NOTE 4. IncomeTaxes

 

The Trust is agrantor trust and is not required to pay federal or state income taxes.  Accordingly, no provision for federal orstate income taxes has been made.  Allincome is taxed to the Unitholders of the Trust.

 

6

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ITEM 2.  Management’s Discussion and Analysis ofFinancial Condition and Results of Operations

** **

CautionaryStatement

 

        The Trustee and Eastern American, itsofficers or its agents on behalf of the Trust may, from time to time, makeforward-looking statements (other than statements of historical fact).  When used herein, the words “anticipates,”“expects,” “believes,” “intends” or “projects” and similar expressions areintended to identify forward-looking statements.  To the extent that any forward-looking statements are made, theTrust is unable to predict future changes in gas prices, gas production levels,economic activity, legislation and regulation, and certain changes in expensesof the Trust.  In addition, the Trust’sfuture results of operations and other forward looking statements contained inthis item and elsewhere in this report involve a number of risks anduncertainties.  As a result ofvariations in such factors, actual results may differ materially from anyforward-looking statements.  Some ofthese factors are described below.  TheTrustee and Eastern American, disclaims any obligations to update forwardlooking statements and all such forward-looking statements in this document areexpressly qualified in their entirety by the cautionary statements in thisparagraph and by the statements in the Annual Report on Form 10-K.

 

General

 

The Trust does notconduct any operations or activities. The Trust’s purpose is, in general, to hold the Net Profits Interests,to distribute the cash proceeds to Unitholders which the Trust receives inrespect of the Net Profits Interests (net of Trust expenses), and to performcertain administrative functions in respect of the Net Profits Interests andthe Depositary Units.  Accordingly, theTrust derives substantially all of its income and cash flows from the NetProfits Interests.  The Trust has nosource of liquidity or capital resources other than the cash flows from the NetProfits Interests.

 

The Net ProfitsInterests were created pursuant to conveyances (the “Conveyances”) from EasternAmerican to the Trust.  In connectiontherewith, Eastern American assigned its rights under a gas purchase contract(the “Gas Purchase Contract”) which obligates Eastern Marketing Corporation, asubsidiary of Eastern American, to purchase all of the natural gas producedfrom the Underlying Properties which is attributable to the Net ProfitsInterests.

 

The Conveyances and theGas Purchase Contract entitle the Trust to receive an amount of cash for eachcalendar quarter equal to the Net Proceeds for such quarter.  “Net Proceeds” for any calendar quartergenerally means an amount of cash equal to (a) 90% of a volume of gas equal to(i) the volume of gas produced during such quarter attributable to theUnderlying Properties less (ii) a volume of gas equal to “Chargeable Costs” forsuch quarter, multiplied by (b) the applicable price for such quarter under theGas Purchase Contract.  “ChargeableCosts” is that volume of gas which equates in value, determined by reference tothe relevant sales price under the Gas Purchase Contract or the Conveyances, asapplicable, to the sum of the “Operating Cost Charge”, “Capital Costs” and“Taxes”. The “Operating Cost Charge” for 2002 is based on an annual rate of$503,354, and for 2001 was an annual rate of $513,106. In subsequent years, theOperating Cost Charge will fluctuate based on the index of average weeklyearnings of Crude Petroleum and Gas Production Workers (published 

 

7

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by the United States Department of Labor, Bureau of Labor Statistics),but not more than 5% per year.  TheOperating Cost Charge was not increased as Development Wells were completed butwill be reduced for each well that is sold (free of the Net Profits Interests)or plugged and abandoned.  “CapitalCosts” means Eastern American’s working interest share of capital costs foroperations on the Underlying Properties, but only for items having a usefullife of at least three years, and not including any capital costs incurred indrilling the Development Wells.  “Taxes”means ad valorem taxes, production and severance taxes, and other taxes imposedon the Trust’s interest in the Underlying Properties, or production therefrom.

 

Pursuant to theGas Purchase Contract, Eastern Marketing is obligated to purchase such gasproduction at a purchase price per Mcf equal to the Index Price.  The Index Price for any quarter isdetermined solely by reference to the Variable Price component.  The Variable Price for any quarter is equal tothe Henry Hub Average Spot Price (as defined) per MMBtu plus $0.30 per MMBtu,multiplied by 110% to effect a fixed adjustment for Btu content.  The Henry Hub Average Spot Price is definedas the price per MMBtu determined for any calendar quarter equal to the priceobtained with respect to each of the three months in such quarter, in themanner specified below, and then taking the average of the prices determinedfor each of such three months.  Theprice determined for any month of such quarter is equal to the average of (i)the final settlement price per MMBtu for Henry Hub Gas Futures Contracts (asdefined), as reported in *The Wall Street Journal*, for suchcontracts which expired in each of the five months prior to such month, (ii)the final settlement price per MMBtu for Henry Hub Gas Futures Contracts, asreported in *TheWall Street Journal*, for such contracts which expire during suchmonth and (iii) the closing settlement price per MMBtu of Henry Hub Gas FuturesContracts determined as of the contract settlement date for such month, asreported in *TheWall Street Journal*, for such contracts which expire in each of thesix months following such month.  AHenry Hub Gas Futures Contracts is defined as a gas futures contract for gas tobe delivered to the Henry Hub which is traded on the New York MercantileExchange.

 

Accordingly, theIndex Price payable to the Trust for production may be higher or lower based onthe fluctuations in natural gas futures prices during the relevant calculationperiod.  The price payable to the Trustwill have a direct impact, positively or negatively, on the quarterlydistributions payable by the Trust to its unit holders.

 

Eastern Americanhad a disagreement with the Trust over Eastern American’s obligation to drillcertain Development Wells that were closely offset by third parties.  The Trust agreed that in lieu of drillingthese closely offset Development Wells that Eastern American could provide theTrust, on an annual basis commencing on April 1, 1997, and over the remaininglife of the Trust, a volume of gas which is equal to the projected volumes ofthe wells as if they had been drilled. These volumes have been estimated by Ryder Scott Company, independentpetroleum engineers.  During the quarterended June 30, 2002, an additional volume of 5,260 Mcf was delivered to theTrust, as compared to 5,833 Mcf for the quarter ended June 30, 2001.  These additional volumes fulfill EasternAmerican’s obligation to provide volumes for Development Wells that had beenclosely offset by third parties.

 

Eastern Americanhas fulfilled its obligation with respect to the drilling of the DevelopmentWells. Since the inception of the Trust, Eastern has drilled a total of 59Development Wells, which 

 

8

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are online andproducing.  (See the Trust’s Form 10-Kfor the fiscal year ended December 31, 2001 for a more complete description ofthe Development Wells.)

 

During the quarterended March 31, 2002, a Coal Lessee contacted Eastern American and inquired asto whether it would sell the Western Pocahontas # 7, # 8 and # 10 Wells whichare wells in which the Trust owns a Net Profits Interest.

 

The Coal Lessee stated that the wells would materiallyinterfere with the Coal Lessee’s proposed mining operations.

 

Eastern Americanreviewed the Trust Agreement and production from these wells to determine if itcould cause the Trust to sell its Net Profits Interest in the Wells.  Upon review, it was discovered that the NetProfits Interest associated with the Western Pocahontas # 7 well accounted formore than .25% of the total production from the Underlying Properties for theprior twelve (12) month period.  EasternAmerican advised the Coal Lessee that it could not sell this well.

 

Subsequent theretothe Coal Lessee insisted that the well needed to be plugged in order for themto proceed with their proposed mining operations.  The Coal Lessee took the position that the coal estate was thedominate estate and, that under the applicable oil and gas lease and case law,that the Coal Lessee could cause the Trust and Eastern American to plug andabandon the well so long as the Coal Lessee fairly compensated the Trust andEastern American.  Eastern American andthe Trust did not necessarily agree with the Coal Lessee position, however theCoal Lessee threatened to institute a Declaratory Judgment Action to determinethe respective interest of the parties.

 

As a result, andin an effort to avoid litigation, the Trust and Eastern American entered into aSettlement Agreement and Release of All Claims with the Coal Lessee pursuant towhich Eastern agreed to sell the Western Pocahontas # 7 well for the amount of$426,187 during the quarter ended March 31, 2002.  The Trust’s share of the proceeds of $303,438 was distributed tothe Trust during the quarter ended March 31, 2002.

 

During the quarterended June 30, 2002, the Coal Lessee purchased the two additional wells, theWestern Pocahontas # 8 and #10, in which the Trust owns a net profits interestfor the amount of $209,561.  The Trust’sshare of the proceeds of $188,605 was included in the Distributed Income of theTrust during the quarter ended June 30, 2002.

 

 

9

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Comparison of Results ofOperations for Three Months Ended June 30, 2002 and Three Months Ended June 30,2001

 

The Trust’s distributableincome was $1,950,189 for the three months ended June 30, 2002 as compared to$3,311,147 for the three months ended June 30, 2001.  This decrease was due to a decrease in the price payable to theTrust under the Gas Purchase Contract as discussed below ($3.776 per Mcf forthe three months ended June 30, 2002; $6.372 per Mcf for the three months endedJune 30, 2001).  This decrease was alsodue to a decrease in production of gas attributable to the Net ProfitsInterests for the three months ended June 30, 2002 (582 Mmcf) as compared tothe three months ended June 30, 2001 (604 Mmcf).  The decline in production is primarily attributable to naturalproduction declines and the required plugging and abandonment of  wells. Taxes on production and property were $150,032 for the three monthsended June 30, 2002 as compared to $258,760 for the three months ended June 30,2001.  This decrease was due to thedecrease in Royalty Income for the three months ended June 30, 2002 ($2,191,952)as compared to the three months ended June 30, 2001 ($3,840,489).  The distributable income includes CashProceeds on Sale of Net Profits Interest of $188,605 for the quarter ended June30, 2002, while no such sales were recognized in the corresponding priorquarter.

 

The price payableto the Trust for gas production attributable to the Net Profits Interests was$3.776 per Mcf for the three months ended June 30, 2002 and $6.372 per Mcf forthe three months ended June 30, 2001. The price per Mcf was lower for the three months ended June 30, 2002than for the corresponding three month period ended June 30, 2001 due to adecrease in the average spot market price for gas delivered at the Henry Hubnear Henry, Louisiana ($3.133 per Dth for the three months ended June 30, 2002;$5.493 per Dth for the three months ended June 30, 2001).

 

Comparison of Results ofOperations for Six Months Ended June 30, 2002 and Six Months Ended June 30,2001

 

The Trust’s distributableincome was $3,613,374 for the six months ended June 30, 2002 as compared to$7,037,094 for the six months ended June 30, 2001.  This decrease was due to a decrease in the average price payableto the Trust under the Gas Purchase Contract as discussed below ($3.409 per Mcffor the six months ended June 30, 2002; $6.594 per Mcf for the six months endedJune 30, 2001).  This decrease was alsodue to a decrease in production of gas attributable to the Net ProfitsInterests for the six months ended June 30, 2002 (1,164 Mmcf) as compared tothe six months ended June 30, 2001 (1,234 Mmcf).  The decline in production is primarily attributable to naturalproduction declines and the required plugging and abandonment of wells.  Taxes on production and property were$271,167 for the six months ended June 30, 2002 as compared to $550,493 for thesix months ended June 30, 2001.  Thisdecrease was due to the decrease in Royalty Income for the six months endedJune 30, 2002 ($3,963,220) as compared to the six months ended June 30, 2001($8,147,876).  The distributable incomeincludes Cash Proceeds on Sale of Net Profits Interest of $492,043 for the sixmonths ended June 30, 2002, while no such sales were recognized in thecorresponding prior quarter.

 

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The average pricepayable to the Trust for gas production attributable to the Net ProfitsInterests was $3.409 per Mcf for the six months ended June 30, 2002 and $6.594per Mcf for the six months ended June 30, 2001.  The average price per Mcf was lower for the six months ended June30, 2002 than for the corresponding six month period ended June 30, 2001 due toa decrease in the average spot market price for gas delivered at the Henry Hubnear Henry, Louisiana ($2.799 per Dth for the six months ended June 30, 2002;$5.695 per Dth for the six months ended June 30, 2001).

 

### **PART II — OTHER INFORMATION**

### ** **

| ITEM 1. | Legal Proceedings.                                   |
|---------|------------------------------------------------------|
|    |                                                 |   |
|    |                                                 | None. |
|    |                                                 |   |
| ITEM 2. | Changes in Securities.                               |
|    |                                                 |   |
|    |                                                 | None. |
|    |                                                 |   |
| ITEM 3. | Defaults Upon Senior Securities.                     |
|    |                                                 |   |
|    |                                                 | None. |
|    |                                                 |   |
| ITEM 4. | Submission of Matters to a Vote of Security Holders. |
|    |                                                 |   |
|    |                                                 | None. |
|    |                                                 |   |
| ITEM 5. | Other Information.                                   |

 

For the calendarquarter ended June 30, 2002, the high and low closing prices of the TreasuryObligations (which have $1,000 face principal amount), as quoted in theover-the-counter market for United States Treasury obligations, were $566.40and $518.10 respectively.  On June 30,2002 the closing price of the Treasury Obligations, as quoted on such market,was $561.30.

 

**TheTrust provides Unitholders with the option to separate the related TreasuryObligation from the Trust Units.  Uponexercising this option, the Trustee transfers such Trust Units from the name ofthe Depositary to the name of the withdrawing Unitholder.  As of June 30, 2002, this option wasexercised on 7,900 Trust Units.  (Seethe Trust’s 10-K for the fiscal year ended December 31, 2001 for a morecomplete description of the Withdrawal of Trust Units and Restriction onTransfer.)**

** **

**11**

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** **
| ITEM 6. | Exhibits and Reports on Form 8-K. |
|---------|-----------------------------------|
|    |                              |   |
|    | (a)                               | Exhibits |
|    |                              |   |
|    |                              | None |
|    |                              |   |
|    | (b)                               | Reports on Form 8-K |
|    |                              |   |
|    |                              | No reports on Form 8-K were filed during the fiscal  quarter ended

June 30, 2002. |

 

### **SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 
|   | EASTERN AMERICAN  NATURAL GAS TRUST  |
|--------|--------------------------------------|
|   |                                 |
|   | By:  Bank of  New York, Trustee |
|   |                                 |
|   | /s/ Cassandra Shedd                  |
|   |                                 |
|   | Cassandra Shedd                      |
|   | Assistant Vice President             |
|   | Bank of New York                     |
|   | Title:  Agent                   |

 

Date: August 14, 2002

 

The Registrant, EasternAmerican Natural Gas Trust, has no principal executive officer, principalfinancial officer, board of directors or persons performing similarfunctions.  Accordingly no additionalsignatures are available and none have been provided.

 

The Registrant also has no chief executive officer orchief financial officer, and therefore this periodic report is not accompaniedby a written statement of any such person pursuant to Section 906 of theSarbanes-Oxley Act of 2002.

 

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