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Chesapeake Granite Wash Trust Message Board

  • fpsully fpsully Feb 8, 2013 8:40 AM Flag

    CHKR Safety Net Pays Off Again

    While I was disappointed by CHKR's 4Q12 distribution of $0.67, at the bottom of their range at the subordination limit, it's still a nice yield going forward as CHKR is currently selling at $18.12. But they didn't quite earn it - they only earned $0.60 per unit. What happens in this case is that the subordinated units owned by CHK get a smaller distribution to make up for the shortfall so that we common unit holders get the subordinated amount. Thus there is a tangible floor to our distributions. In fact, for the next year the subordinated amounts total $2.76 per unit, guaranteeing us a yield of at least 15.2% in the coming year. Not bad. And if oil and NG prices recover, the yield could be even higher.

    Cheers,
    Sully

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    • been watching all the trusts chkr the only one to have incresed revenue for last quar when oil/gas prices depressed.. whz sdr sdt per ect all buried their investors.. going forward sure looks like chkr will meet minimum dist. and maybe even exceed if any kind of ramp up in production. so were sitting on a 15% dist. note the min. dist are shown on their 10Q's nice minimums for the next 3 yrs.

      Sentiment: Buy

    • Okay, I'm not surprised that the safety net was used (again), but I was expecting .63 div. Why .67 and is there a dividend schedule written somewhere? Thanks. ($40,000 & long)

      Sentiment: Strong Buy

    • This is true, but it is an improvement. Going forward, CHKR will have higher dividends as natural gas stays above 3 dollars. Whether it goes to 4-6 dollars in 2014-2016 is another story. The good news is the exporting of Nat Gas, Nat Gas trucks (as opposed to diesel), and the shut down of coal plants. The bad news is the defense cuts that will happen and if we do not have an hot summer. CHKR will not have a problem staying at the subordinate, but good news is necessary for increased distributions.

      Sentiment: Buy

      • 1 Reply to kdawg2sweet
      • I think you should review the prospectus again. Their projected distributions are based on certain levels of nat gas prices, but also they disclosed that their basis differentials will increase. Someone posted about why they are selling gas below the NYMEX spot price. There is disclosure about this in the prospectus.

        I recently sold the last of my position. This seems to be following a pattern in SDT and PER although the only thing they have in common is that they are trusts. CHKR just bumped into resistance on Friday and looks to be in a declining pattern. I would not add any unitl the RSI reaches very oversold (

 
CHKR
9.03+0.19(+2.15%)May 1 4:02 PMEDT