Don't take my word for it. And don't listen to Biotech. He says ban on steaming will not affect current production. The company says it will. READ THE FILING. It's on their website.
Pending Initiative in Santa Barbara County
A local initiative in Santa Barbara County was circulated for signature during the first half of 2014 and has recently obtained sufficient signatures to place proposed amendments to the Santa Barbara County Comprehensive Plan and the Santa Barbara County Code on the ballot in Santa Barbara County in November 2014. It is also possible that the Santa Barbara County Board of Supervisors could elect to adopt the measure without change in the coming weeks. If enacted, these amendments would either directly or indirectly prohibit utilization of waterflooding, cyclic steam injection, acid use for stimulation or maintenance, water injection, and a variety of other methods, on future well sites as well as potentially materially reducing or prohibiting utilization of such recovery techniques from currently producing wells, within Santa Barbara County. If enacted, the proposed amendments would also prohibit the use of hydraulic fracturing in Santa Barbara County, although PCEC has never used hydraulic fracturing in Santa Barbara County and has no plans to do so.
The current and future production of PCEC’s Orcutt properties, including the Diatomite formation, which are located in Santa Barbara County, are substantially dependent on PCEC’s ability to successfully implement or continue utilizing traditional waterflooding, cyclic steam injection and other currently utilized recovery methods. For example, production utilizing cyclic steaming represented 1,660 Boe/d and 1,631 Boe/d of average net production for the year ended December 31, 2013 and the three months ended March 31, 2014, respectively, or 38% and 38%, respectively, of PCEC’s average daily net production attributable to the Underlying Properties for such p
Sentiment: Strong Sell
Joe, are you short the stock? BTW, PCEC (which is not ROYT and probably has many more properties in various stages of production than ROYT) must be ultra conservative (i.e., not realistic) in its filings. All companies do that and it is for the most part nonsense which they write just to look responsible if they are hit with frivolous lawsuits. Don't consider every remotely possible speculation you read in a company filing to be gospel.
I have the read filing and your comments along with Biotech's. Always suspicious of anyone who wants to tell others who they shouldn't listen to (my 47 percenter brother-in-law has told me to not listen to Fox for example). Oh, and BTW, I also read an article by Liz Hoffman at the Independent dated June 14, 2014:
"If approved by voters in November, the ordinance would prohibit enhanced extraction methods - most notably fracking, cyclic steaming, and acidizing - but not affect existing projects, including Santa Maria's Energy's 136 wells. The measure's stipulation that certain future projects could qualify for exemptions presents some issues........."
Looking the PV-10 stuff in the filings I can throw out the future development and still put a number on the trust if the ballot proposal is approved.
My point was that you shouldn't take someone's opinion as fact. Some on this board claim that the initiative absolutely will not affect existing production. But the company clearly states in their filing that that if the initiative passes it "WOULD have a material adverse impact on production and adversely affect our ability to pay distributions." The company is trying to warn their unit holders, but some people are intent upon sticking their heads in the sand. What part of "material adverse impact" do people not understand? The insiders warn us, then dump their own shares. Yet some people claim they know better. All I can say is GOOD LUCK!
Sentiment: Strong Sell
The initiative itself is not designed to back-date and revoke already-approved wells. SEC filing is meant to be conservative to cover all grounds against frivolous investor lawsuits. The existing wells are not to be impacted by the initiative, if enacted. Furthermore, any attempt to retroactively apply steam injection ban on already-approved sites is, in practical sense, futile, as the county has already given approval and permit to begin with.
Well, let me tell you that this part of the clause my be grounds to have the whole thing thrown out in court:
" as well as potentially materially reducing or prohibiting utilization of such recovery techniques from currently producing wells, within Santa Barbara County."