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McMoRan Exploration Co. Message Board

  • bcfbubba bcfbubba Jan 17, 2013 8:10 AM Flag

    McKenzie has started selling TISDZ again

    Within the last 3 days, he has sold about 57,000 units - all @ $ .80. It has to be a money need as his last sales were in August @ $ 1.25. Still, with FCX's capital, the TISDZ leases will be drilled & developed which is good for both TISDZ & MMR RT.

    You cannot like MMR RT without liking TISDZ as 1/2 of the potential TCF's for MMR RT are on TISDZ leases. The extremely major difference is that TISDZ can effectively never be called.

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    • I beg to differ regarding the merits of TISDZ over MMR RT. I have in the past expressed my view that TISDZ is not all that great an investment. In fact, I used to like it and held it for over a year before I decided to sell all of it, at a loss. I want to share my views, which is ofcourse entirely subjective...in no order of priority:
      - TISDZ only has royalty on three properties, BBE, BBW and Laffite (not sure about Calico Jack or its status)...and MMR's UD acerage is a lot more than this. MMR RT is a clear winner
      - MMR is shifting towards onshore, as it is (a) less deep, (b) cheaper cost, (c) possibly larger structures, (d) easier to get to the target zones, (e) less hastle with regulator/authorities, (f) less engineering risk
      - BBW target zones are indeed quite deep (except for the copula plays) and could take more than 5 yrs to produce from the zones discovered in 2008 post XOM drilling.
      - MMR likely to focus on development on Davy, since they are close to derisking that structure and getting more data points esp after DJ2 is done. TISDZ has nothing to do with DJ production, MMR RT has. DJ could have another 50 wells and run for 30 yrs or more, hopefully
      - TISDZ has this issue about lapse in MMR's leases. What if some of the leases are lapsed and then MMR gets it again from the regulator, i.e. a technical lapse but for all intent and purposes TISDZ is out of the game.
      - MMR really doesnt want TISDZ to get any royalty...whilst they are all out for MMR RT's rights.

      Yes, MMR RT can get called, but by then you'd have made 10x on your investment or 8x (assuming you can get in at just over $1 when the MMR RT's trade in summer this year). 10x is pretty good, I dont see TISDZ going 10x .. and its also the speed at which the trust goes up. I bet that MMR RT will appreciate faster than TISDZ. Its a simple fact about which one receives cashflow faster and in what amount.

    • Thank you @bcfbubba for the McKenzie update. I too love the fact that TISDZ can not be called unlike the MMR RT. I would be voting 10,763+ times "NO" on a TISDZ call. once it starts producing some income, in for the long haul on this one.

      Sentiment: Strong Buy

    • Thanks !! Agree with all you said about TISDZ but I have enough for now. McKenzie has an almost unlimited supply of TISDZ at around 8.3 million units. No reason to buy TISDZ until those trade imho.