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MV Oil Trust Message Board

  • lizahuang54321 lizahuang54321 Jul 5, 2013 4:30 PM Flag

    distribution announced


    volumes and price almost identical to Q1.
    Increased costs did us in again.

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    • A basic explanation of why costs skyrocketed from ~5.7 to ~8.5 million is needed. Was it for new horizontal wells or did the operator give itself a 2.8 million dollar bonus?

      • 1 Reply to rvp67rai
      • The one before that was $8.2m. The one before that was $7.2m. The one before that was $8.4m.
        So instead of asking why the Q2 costs skyrocketed, you could just as well ask why the Q1 costs were much lower than usual. Looks to me like an upwards trend with Q1 being unusually low.

        Also it's not just MVO - many of the trusts are reporting higher costs over the last year. Perhaps do you think drilling for oil might be getting more expensive?

        It's a huge jump to assume there is something underhanded going on. Oil drilling costs have been increasing 9% per year recently.

    • I don't get it. Price went up at the open..... Down a bit to 31, then steady or up. What gives? People are expecting 80 - 90 Cents and we get 67?

      It seems to me this thing has to go down sooner or later - and since investors are supposed to be "forward thinking", it would seem to be sooner. The fundamental problem I see is that the owners interests are not aligned with the operators interests and no one is forcing them to be careful with our money? Why wouldn't they let production diminish only to ramp it up in 2026????

    • Liza you are correct, it is the increased costs that killed the distribution. The operator of the properties for the Trust, MV Partners (consisting of Murfin Drilling and Vess Oil Co.) are essentially free to spend any amount that they deem necessary to "benefit the trust." We the shareholders only find out about the excessive spending by the operator after the fact. The share price of MVO will get killed on monday morning due to the huge miss on expected distribution.

      I have been in MVO for quite some time now and it is beginning to smell like a fish that has been sitting on the dock in the afternoon sun for hours. The operator collects all the assets of MVO upon the dissolution of the trust on 06-30-26 and so there is no reason for them to not spend the current shareholders money to keep all properties up to "tip top shape" for when they assume ownership.

      There is nothing illegal here since it was all spelled out in the IPO prospectus, but the ethics of this is starting to have an ugly odor.

      • 1 Reply to silurian3
      • I thought most of you people did your homework on these Royalty Trusts but yet not one of you seem to go back and compare this quarter's expenses in 2013 to the same quarter's expenses in 2012. This distribution is for the expenses that were paid in April, May and June. This period includes 1/2 of the Ad Valorem taxes paid for the year and the production and property tax number is comparable with the same period in 2012 taking into consideration the change in production between the years. This period is also when development costs tend to increase due to more activity since most like to drill in warmer weather and not during the harse winter weather that Kansas tends to have at times. So comparing this quarter's costs with last quarter's costs as a general rule makes little sense. My hope is that the Trustee breaks out some of these costs in greater detail in the future so that I, as an investor, can have more information available to make a better informed decision. Finally, the comments I keep reading about the #$%$" operators make little sense in my opinion as if one took the time to read the financial information filed annually, you might just see that the operators and their related parties own a substantial portion of the outstanding units and they paid full price for them at the IPO date.

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