NXG Cushing® Midstream Energy Fund (NYSE: SRV) Announces Distributions

Rhea-AI Summary

NXG Cushing® Midstream Energy Fund (NYSE: SRV) has announced a special distribution of $0.31477 per common share, payable on December 31, 2024, to shareholders of record on December 27, 2024. This special distribution comes in addition to the previously announced December distribution of $0.45 per share.

The special distribution is being made to meet the Fund's 2024 distribution requirements as a regulated investment company for U.S. federal income tax purposes. It is estimated that 100% of the special distribution will consist of long-term capital gain. The Fund is a non-diversified, closed-end management investment company that invests at least 80% of its net assets in midstream energy investments under normal market conditions.

Positive

• Special distribution of $0.31477 per share announced
• Additional regular distribution of $0.45 per share for December
• 100% of special distribution expected to be long-term capital gain

Negative

• None.

Insights

Financial Analyst

The special distribution of $0.31477 per share, combined with the regular December distribution of $0.45, signals strong capital gains performance for the fund in 2024. The 100% long-term capital gains composition indicates successful investment exits at profitable valuations. For investors, this distribution helps optimize tax efficiency while maintaining the fund's regulated investment company status.

The fund's focus on midstream energy infrastructure, particularly companies involved in natural gas, crude oil and renewable energy services, provides investors with exposure to both traditional and emerging energy sectors. The requirement that portfolio companies derive at least 50% of their business from midstream services ensures focused exposure to this critical infrastructure segment.

Market Research Analyst

The timing and structure of this special distribution reflect strategic portfolio management and tax planning. For investors, the fund's hybrid approach to both traditional and transformational infrastructure presents an interesting value proposition in the evolving energy landscape. The inclusion of carbon sequestration, solar and wind alongside conventional midstream assets demonstrates adaptation to energy transition trends while maintaining exposure to essential current infrastructure.

The fund's non-diversified status and closed-end structure allow for concentrated positions and potentially enhanced returns, though investors should note the inherent risks and the tendency for closed-end funds to trade at discounts to NAV.

DALLAS, Dec. 17, 2024 /PRNewswire/ -- The NXG Cushing® Midstream Energy Fund (NYSE: SRV) (the "Fund") declared a special distribution of $0.31477 per common share. This special distribution will be payable to common shareholders pursuant to the table below:

Record Date	Ex-Dividend Date	Payment Date	Distribution Amount
December 27, 2024	December 27, 2024	December 31, 2024	$0.31477

This special distribution is in addition to the Fund's previously announced December distribution of $0.45 per share. This special distribution is being paid to allow the Fund to meet its 2024 distribution requirements as a regulated investment company for U.S. federal income tax purposes. 

It is estimated that 100% of the special distribution will consist of long-term capital gain. The sources the distribution are only estimates and are provided to you pursuant to regulatory requirements and are not being provided for tax reporting purposes. The final determination of such sources will be made and reported to shareholders in early 2025 for the 2024 dividends, after the end of the calendar year when the Fund determines its earnings and profits for the year. The final tax status of a distribution may differ substantially from this information.

The distribution shall be paid on the payment date unless the payment of such distribution is deferred by the Fund's Board of Trustees upon a determination that such deferral is required in order to comply with applicable law or to ensure that the Fund remains solvent and able to pay its debts as they become due and continue as a going concern.

ADDITIONAL INFORMATION ABOUT THE FUND

The Fund is a non-diversified, closed-end management investment company with an investment objective of seeking a high after-tax total return from a combination of capital appreciation and current income. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets, plus any borrowings for investment purposes, in a portfolio of midstream energy investments. The Fund considers midstream energy investments to be investments that offer economic exposure to securities of midstream energy companies, which are companies that engage provide midstream services in the energy infrastructure sector, including the gathering, transporting, processing, fractionation, storing, refining and distribution of natural resources, such as natural gas, natural gas liquids, crude oil refined petroleum products, biofuels, carbon sequestration, solar, and wind. The Fund considers a company to be a midstream energy company if at least 50% of its assets, income, sales or profits are committed to, derived from or otherwise related to midstream energy services. The Fund's shares are traded on the New York Stock Exchange under the symbol "SRV."

There can be no assurance that the Fund will achieve its investment objectives. Investments in the Fund involve operating expenses and fees. The net asset value of the Fund will fluctuate with the value of the underlying securities. It is important to note that closed-end funds trade on their market value, not net asset value, and closed-end funds often trade at a discount to their net asset value.

ABOUT NXG Investment Management

Cushing® Asset Management, LP ("Cushing") is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts. Cushing is doing business as NXG Investment Management. The Firm provides Next Generation investment strategies to investors seeking long-term growth in companies focused on traditional and transformational infrastructure.

Contact: 
Blake Nelson
NXG Investment Management
214-692-6334
www.nxgim.com

IMPORTANT INFORMATION

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.

This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the Fund and NXG Investment Management believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the company's reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the Fund and Cushing do not assume a duty to update this forward-looking statement.

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SOURCE NXG Investment Management

FAQ

What is the total distribution amount for SRV shareholders in December 2024?

SRV shareholders will receive a total distribution of $0.76477 per share in December 2024, consisting of a special distribution of $0.31477 and a regular distribution of $0.45.

When is the record date for SRV's special distribution in December 2024?

The record date for SRV's special distribution is December 27, 2024.

What is the tax classification of SRV's special distribution for 2024?

The special distribution is estimated to consist of 100% long-term capital gain, with final tax status to be determined and reported to shareholders in early 2025.

What is SRV's primary investment focus?

SRV invests at least 80% of its net assets in midstream energy investments, focusing on companies that provide services in the energy infrastructure sector.

When will SRV pay the special distribution announced in December 2024?

SRV will pay the special distribution on December 31, 2024.