15 years of reserves priced at what price? That is the question you need to ask yourself. Right now Permian Basin Trust is trading at an average price of say $80 a barrel.
But what if the average price over the next ten years is $100 or $120 or $140 a barrel? Then PBT is severely undervalued. And this undervaluation doesn't even account for the fact that reserve estimates at all the trust like SBR, PBT and so on have always been vastly to small. Basically they own a huge piece of property and it is to find small incremental amounts of oil on an almost endless basis. At $120 a barrel average oil price, Permian Basin Trust has a life span in my estimates of 25 years. Perhaps higher if 10 years from now the price of oil is over $150 a barrel.
So what event would push the price of oil permanently higher? Peak Oil. From all the visible evidence that I can see in the Weekly Petroleum Status Reports, oil supplies peak about 5 months ago in the US and have been steadily dwindling at 4 to 5 million barrels a week down. Matter of fact of all the major oil producers I believe 14 out of 16 reported decreases averaging over 5% in oil production (Do your own due diligence, you can search google for a blog on Barrons that point this out as well as look at the production numbers).
If we truly are experiencing Peak Oil (what else can explain dwindling supplies in times of such weak demand world wide?) then over the next two years we will have 7 to 8% less oil world wide than we have right now. In the US we will see stock piles dwindle to under 300 million barrels within 3 months.
As far as the big picture goes your argument is reasonable and probably correct. But US inventories cannot be used as an indicator of peak oil. You need to look at global production/export statistics. I do believe we are at or close to peak oil, however you are looking at the wrong metrics to identify it.
You can add to that list VOC a new trust with an expiration around the 2030 time frame. The first year of production is hedge at $94 a barrel, the remaining years starting in 2012 are unhedge meaning you can capture the full benefit of higher oil prices over the next 18 years leading to 2030.
VOC has extremely steep decline curves shown in the prospectus. Yes, oil prices may rise through 2030 but VOC will be producing less and less oil (much less after the first few years) over that period. This is all in the prospectus.