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Hugoton Royalty Trust Message Board

  • canudigm canudigm Sep 20, 2013 3:44 PM Flag

    Everything I said has come true

    On August 15 I wrote on this board:
    " Based on simple math I estimate the next distribution to be about 0.08 cents, and the September distribution to be just under 0.07."
    I was very close on both distributions.

    On August 4 I wrote on this board:
    "Currently, development costs are being deducted at a rate of $ 6,000,000 per year. Development costs have swung from a surplus to a deficit, and XTO is advising costs to be $ 6 - 8 mil. That tells me that in the near future, development costs will increase and cut further into your distribution."
    In HGT's August 20th press release it stated:
    "XTO Energy has advised the trustee that as a result of increased development activity it increased the monthly development cost deduction from $500,000 to $600,000 beginning with the August 2013 distribution and it expects it to remain at that level through the December 2013 distribution. "

    This is just too easy.
    New predictions:
    1) October distribution will be lower again.
    2) Stock will face selling pressure going into arbitration hearing in November.

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    • On August 15 I wrote on this board:
      " Based on simple math I estimate the next distribution to be about 0.08 cents, and the September distribution to be just under 0.07."
      I was very close on both distributions.

    • Other new predictions:
      1) The November distribution will be higher than both this and the next one and we go to at least 8 cents after that.
      2) Stock moves quickly back to 8.75 on the Nov arbitration resulting in less than the initial charge.
      3) Canudigm decides to "fight it" and take the short into the winter...We get a cold winter, natural gas goes to 4.50-4.75 and he ends up capitulating and covering around $11.

    • Afraid it isn't quite that simple. Do your math on the current 8K and you'll get 7.6. You have to read down into the legal disclosures to see that B of A is deducting an extra 400K (equivalent to another penny of distribution) over each of four months starting with this one, thus the 6.6 distribution. The unexpected deduction is to handle legal expenses involved in a NEW Arbitration (not the almost finished and still uncertain 28.5M Frankhouser Settlement Arbitration) . Anyone have any more info on the Sandra Goebel (a unitholder) Arbitration which is against both XTO and the Trustee, B of A? Would unitholders benefit directly from the $59M demand if she is successful or do unitholders just get stuck with B of A's legal bill?

      Regardless, unlike many other royalty trusts, projecting the unit price and distribution for HGT is much more complex than predicting gas volumes and prices ... unless you have an arbitration and lawsuit crystal ball.

 
HGT
10.20+0.21(+2.10%)Jul 11 4:01 PMEDT

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