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San Juan Basin Royalty Trust Message Board

  • jimnii2003 jimnii2003 Sep 8, 2011 11:11 AM Flag

    reserve life

    I am thinking about buying a oil/gas royalty trust for the dividend yield, but the depletion rate and expected reserve life is a concern. I would like to find one that has a long reserve life or a large amount of acreage with a high probability of increasing the reserve life. I have been trying to find this info on internet but have been largely unsuccessful. I would greately appreciate any information regarding reserve life comparison for the Trusts such as DMLP, HGT, SJT, CRT SBR, ETC. I did find that DMLP had purchased additional acrage in the Bakken, etc., eventhough I understood that Royal Trusts were not permitted to add additional acreage. Can anyone explain this?

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    • DMLP is organized a bit differently. It is kind of a trust/MLP hybrid. The others you mention do have that limitation. HGT, SJT, CRT, SBR are probably all pretty long life. The best you can do is read the annual reports for each (should be available on their websites). But the reserve reports are usually very conservative (and increased prices means more reserves can be produced economically). I wouldn't worry about reserve life for any of these. Same goes for MTR and PBT.

      One thing I have observed is that CRT seems to get the best price for their gas. I assume it must be because they have higher liquids content. So when gas prices go low, CRT still maintains a pretty good distribution.

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