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San Juan Basin Royalty Trust Message Board

  • bobbobwhite bobbobwhite Aug 10, 2004 1:45 PM Flag

    Can someone tell me

    why Yahoo states SJT distributions at 11.9% when the TTM distr. is 5.8% according to Yahoo's own divi chart? Maybe even less going forward. What is correct?

    Thanks for a learned answer.

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    • But your response did not answer my question:

      Your response only addressed the obvious relationship between the distributions and the price of nat gas.

      How did the poster arrive at the conclusion that "For 99.9% of the people on this board the long term outlook for natgas is the driving principle."

      If you (or the original poster) have some evidence about the 99.9% of the people on the board, I'd love to hear it.

      I know that the original poster's comment does NOT apply to me.

    • Your question was "I wonder how you arrived at that conclusion". My answer explains that conclusion.

    • impiety, your explanation has nothing to do with my question, which was about people on the board.

    • Concern over new LNG as a depressant on future NG prices is not well founded. The current impact of LNG is about 1.5% of total NG supply. Even imagining a large increase in LNG facilities (say a double of supply) wouls still result in a relative drop in the bucket- perhaps absorbing a portion of the increase in demand.

    • Thanks for your insight, Hubris.

      I am inclined to disagree with your thought that 99.9% of the people holding SJT are motiavted primarily by long-term NG rates. My impression is that there is now an element of "tulip time" buying which is tied to the rise in crude prices and futures, even though the futures for NG have been fairly flat in the last few months.

      Undoubtedly, there are investors who are drawn by the favorable return and tax advantages, and who may sometimes be misled by a few abnormal high distributions.

      As for me, I have a five year horizon, and I would be among those who would lighten my position in SJT if it ever becomes apparent that imported LNG can be a significant source of supply, especially for power generation in the southwest and California markets.

      All of which is one man's opinion and worth exactly what you pay for it.

    • "For 99.9% of the people on this board the long term outlook for natgas is the driving principle."

      I wonder how you arrived at this conclusion.
      ===========================================
      The conclusion is drawn from the relationship between the Trust's ability to pay royalties and the price of natgas. If natgas price decreases the Trust's payout must be decreased as well. If the price increases the payout increases.

    • <I've been hearing of rumblings of new Nat Gas import terminals being built so that large supplies of Nat Gas in other parts of the worlds can be imported>

      I have heard these rumblings, as well. However, I have heard more recent rumblings (a couple of months ago) of strong NIMBY resistance to these terminals because of fears they could become targets for terrorists. I think it will be a long time before these new terminals come on-line. They wild card is what happens to the Chinese economy. It could begin to soak up NG and oil like mad.

      I frankly don't think that the current prices of energy are temporary spikes. The long-term outlook for prices is inexorably upward.

      Wobble

    • Isn't Nat Gas supply limited because of very limited ability to import from other parts of the world? I've been hearing of rumblings of new Nat Gas import terminals being built so that large supplies of Nat Gas in other parts of the worlds can be imported. This I think would have an affect on the long term outlook on Nat Gas prices.

    • "For 99.9% of the people on this board the long term outlook for natgas is the driving principle."

      I wonder how you arrived at this conclusion.

      "Natgas will become increasingly linked with global energy markets as LNG ramps up over the next five years and the gas prices underpinning the value of SJT will be affected."

      I agree with your reluctance to specify a direction in the value of SJT, as predictions of the future of LNG and other components of the global gas and energy market 5 years out are speculations that an investor probably cannot rely on at this time.

    • Since I do not know the source of your data I must assume they are culled from Platts Gas Daily or perhaps from the ICE trading publication. In either case it would be unwise to assume a correlation between the data you are referencing and what SJT produces. The reason is SJT volumes are relatively static over a period of time while daily data reported for pricing purposes can vary significantly from day to day or month to month. Price/transaction reporting to Platts Gas Daily is still a voluntary matter and some entities transacting in the San Juan Basin may simply choose not to report. In addition many transactions are indexed to Platts Gas Daily so that they are not themselves reported as a transaction volume included in the price report itself. I must repeat myself and caution that there is no meaningful inference to be drawn from looking at daily data. For 99.9% of the people on this board the long term outlook for natgas is the driving principle. I still get the impression that people look at the dividend as supporting the price when they should be looking the forward curve for natty.

      This trust is one of the purest commodity plays on natgas, much more so than oil majors or E&P's due to the fact it is not burdened with reserve replacement issues and enormous cost structures to support; but be forewarned if you feel uncomfortable with commodities. Natgas will become increasingly linked with global energy markets as LNG ramps up over the next five years and the gas prices underpinning the value of SJT will be affected.

      Respectfully....

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SJT
11.97-0.17(-1.40%)Mar 31 4:02 PMEDT