On speculative trusts the yield usually hovers around 20-25%. Assuming an average monthly dividend of 12.5 cents (which is about the average over the past 6 months), the stock price needs to dip down to $7.50 in order for it to be priced at 20% yield like its competitors. I am not saying anyone should buy or sell here, but the broader market and the speculative nature of ROYT tells me the stock price has a long way to go down before it plateaus. And I would not expect a bounce; if you look at the historical charts, ROYT doesn't bounce; it drops a lot and then flattens. With the future looking like nothing but declining monthly dividends, I'd say ROYT is not worth investing in anymore at this time. SDR, SDT, WHZ have better yields than ROYT. GLTAL.
Price will depend on PV10 value which was $13/unit as of 12/31/2013; div received since then is about 0.84/unit; subtract this and you get fair value $12.16; use 20% discount because of fools selling and the lowest value I get is $9.75/unit
PV-10 is an inaccurate measure of future potential of ROYT. For a perpetual trust, it is anyone's guess what the oil price will be in 15-30 years. I bet it will be $200 or higher per barrel in that time frame, if not higher. The key is low depletion rate in the California wells that provides great upside, and the improvement in environmentally-friendly drilling technology in the future.
Haha. For those who missed early 2009 panic in great investment opportunities, ROYT is "it." Whatever *danger* is out there, it is already discounted enough. Buy in chunks until the end of the year, and you'll have a monthly-paying 15% trust company for life. Don't cry later for missing it out. You can NEVER time the exact bottom.
What is "speculative" about the following language, except for stupid and scare-tactic morons against ROYT?
The initiative itself, in sub-section (c) in page 26, states the following:
The provisions of this Initiative shall not be applicable to any person or entity that has obtained, as of the Effective Date of this Initiative, a vested right, pursuant to State law, to conduct a High-Intensity Petroleum Operation.
At a minimum, the "vested right" can be interpreted as allowing already-approved operations. Furthermore, it's not a sure thing the language above *stops* new well drilling for the already-leased (i.e. hence "vested" mineral rights). I see the court allowing new drilling operations for companies that already have deeds and rights to operate in the region. How do you define "the vested right to conduct a High-Intensity Petroleum Operation?" It is clear that any reasonable definition of this term only provides upside to ROYT's yield protection and potential. Furthermore, if PCEC does not drill new wells, PCEC is less leveraged and better capitalized for existing well operations. This is not necessarily a negative for the ROYT unit holder whose majority of profits come from existing wells only, due to the structure of the trust for the life of the trust.
There is panic selling, and then there is valuation selling. I think this is valuation selling. There is a not a single near-term catalyst for ROYT, but only a negative catalyst at least until November, and maybe until March 2015. If you want to invest here between now and then, go for it. But why invest in a stock which will be trapped in a downtrend until November, and which might drop even farther if the vote doesn't go in favor of ROYT? You can call me stupid or whatever else, but the facts are in: ROYT is a speculative stock in a sector which detests speculation and thrives instead on stability. The situation spells, "Sell".
I agree. There’s a VERY real outcome that the reserves of this trust become permanently impaired because of regulations. The insiders dumped stock on you retail folks when they saw the warning signs on the wall. Heck the company even prepared a presentation to sell this junk onto the market during the secondary.
With a PV-10 of 501mm and dropping each day, the current price is way too rich. Don’t be picking up pennies in front of a freight train.
If you analyze the actual reserves estimates, the bs you are pulling is purely out of your hope in bear raid. At some point, the 15%+ yield will favor the trust holder who comes in and buys late. I'm buying into November, in small chunks. Call me November 2015 and ask how my ladders have worked out.