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San Juan Basin Royalty Trust Message Board

  • lizahuang54321 lizahuang54321 Jan 19, 2012 4:06 PM Flag

    do the math

    Gas prices from the last distribution announcement below. Current NG price is $2.30 and dropping >5% per day. Do the math...coming distributions are going to be half of what they have been recently.

    "Dividing revenues by production volume yielded an average gas price for October 2011 of $4.63 per Mcf ($4.24 per MMBtu) as compared to $4.84 per Mcf ($4.43 per MMBtu) for September 2011. "

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    • thanks for link liza

      I agree a dime or two difference in spot price and sale price makes no difference to the big downward effect the tumble in gas price will have on distribution (whereas a premium of $ $1.60 would) and thus, presumably, unit price if NG prices remain depressed near their current levels when the low distributions arrive

      I see no evidence SJT getting significant premium for their gas or reason for rebound in NG prices soon so I'm sticking to my strategy of waiting for unit price to come down to my target price before buying

    • There is nothing there that says they are getting a premium over the spot price.

      I think you are over-analyzing this. We know the prices received by the trust will be going down significantly in the next couple of distribution announcements. No need to try to predict it to the nearest dime.

      As for the SJ hub price, I posted a link to it in a reply below.

      "is the nymex henry hub price lower than the San Juan Basin gas price?? Or, do the contracts with buyers (Chevron, etc) stipulate a premium over index price????"

      I don't think either of those statements would be true. In previous years, SJ hub used to be typically lower than Henry Hub, but since some new pipelines were constructed they have been pretty close this year.

    • In general the quoted sales price in the trust announcements does include the liquids (some trusts like PBT are specifically highlighting that in the distribution announcement now). However my understanding is that SJT (and HGT) have minimal liquids - it's pretty much all dry gas.

      I don't see the point of trying to figure this to the nearest penny. The previous poster said his calculations showed a 0.17c discrepancy to what the price should be. That's not all that material when the price drops from $4.50 to $2.50. We may not know to the nearest dime but we know the prices received by the trust will be significantly lower in the next couple of distributions.

      And for the previous poster who requested a link to the hub prices, look here in the West section (I assume it's the EP-SJ hubs)
      http://intelligencepress.com/features/intcx/gas/

    • it's all about the liquids content i think. the spread is much greater now i believe.

      but the resident shorts should have a good answer.

      i don't think the prices recieved are going to be as low as that person's report says.

    • ok I just saw found average selling prices for the San Juan Hub:

      http://seekingalpha.com/article/338481-san-juan-royalty-trust-current-natural-gas-prices-will-slash-dividend

      price/MMBtu

      July 2011 $4.45
      Aug 2011 $4.69
      Sep 2011 $4.43

      so the avg for third quarter at the hub was $4.55

      so SJT's reported avg sale price of $4.72 for Q was a 0.17 premium over San Juan Basin index.

      anyone have a link to San Juan Basin NG index?

    • from bottom of p.9 of most recent 10Q, from September 2011:

      BROG (principal operator of SJT properties) enters contracts for the sale of all gas produced from the Underlying Properties with..."the sale of such gas at prices which fluctuate in accordance with the published indices for gas sold in the San Juan Basin of northwestern New Mexico"

      BUT this 10Q also reports the average price per Mcf in 3 months ended sep 30 2011 was $4.72, whereas the NYMEX henry hub price for July-Sep 2011 ranged from $4.6-$3.6 MMBtu in that period:

      http://www.oilnergy.com/1gnymex.htm#year

      so it looks like SJT is getting a premium over Henry Hub index

      SO I am confused. is the nymex henry hub price lower than the San Juan Basin gas price?? Or, do the contracts with buyers (Chevron, etc) stipulate a premium over index price????


      (annual report also says, for those interested in lag of gas price affecting dsitribution: "Proceeds from production in the first month are received by BROG in the second month, paid by BROG to the Trustee in the third month, and distributed the fourth month to Unit Holders of record as of the last business day of each month")

    • Liz... Oppppps... I was in era.... I meant to say 2014 ..."View all Topics | View all Messages < Newer Topic | Older Topic >
      Re: do the math 9-Feb-12 01:41 pm
      Liz
      We might see as early as 2014. jmo.

      Wonder if this might be a favorable time to try and dollar average...
      Thanks Lots...
      Dave the Vet..

    • how about cut and pasting the relevant text.
      I had a quick look at the 10-k from march 2011 and didn't immediately find what you are talking about.

    • how about just reading the last 10k and helping me out? :-)

      it's in the engineer's report at the end where they do the pv10 calcuation.

    • "do you have ideas on why the 10k report says that they expect to earn 0.60 to 1.50 more per btu than the posted index price?"

      I hadn't seen that. I am sceptical. Can anyone confirm?

      "the dividend was much higher than the bears had thought."

      Not sure if that is correct. The latest distribution announcement reflects production from December. NG didn't start accelerating downwards till January. I'd expect each of the next 2 distributions to be lower than the one before.

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