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Dorchester Hugoton, Ltd. (DHULZ) Message Board

  • rrb1981 rrb1981 Apr 27, 2001 9:31 PM Flag

    Nat gas up!!!

    Natural Gas going up should add to the bottom line and mean that the raised distribution is that much stronger and stable. Why is this company not a target for a bigger Oil company. The fields are in the central US which means they are equidistant from all the major markets. Currently this gas gets bought by Duke and Williams. Maybe they would like to land the source of the gas.

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    • the tabulated spot prices for nat. gas since the start of the year - using the price differential of $0.97 in the 4th quarter for the 1st quarter results in 1st quarter earnings of about $0.58. But if the differential is halfway between the $0.97 and the "normal" of about $0.30, the 1st quarter earnings estimate would be the same as the 4th quarter or $0.62 per unit. That means that the quarterly distribution is covered by 237%. That is quite a bit for a PTP. As I said before, if nat. gas prices stay above $5 for the yearly average, DHULZ should earn at least $2.00 while paying out only $1.08.
      Perhaps Friday's late day stock price movement indicates that there is a growing group of investors who are beginning to realize what is happening to DHULZ earnings versus indicated payout.
      It has to be good - how can it be bad?

      • 1 Reply to JAVELIN2625
      • ok, let me see if I follow you, basically by comparing the current prices of nat gas now with those of 4th quarter we will either 1) stay the same or 2) have a small to large increase in revenue assuming that the volume of gas is the same? If so, it would be wise to load up as the distribtuion might have to be raised again right? Can you run by the 237% coverage again, is that for the year or the 1st quarter. Anyway, good luck to all.