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Whiting USA Trust I Whiting USA Message Board

  • macbride247 macbride247 Dec 10, 2012 11:11 AM Flag

    Questions RE:Trusts

    Someone on this board states their are 8-9 more distributions left which would more than pay you back if you bought shares today. I'm not a holder but with Trusts what happens to your original investment when the Trust expires?

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    • It's gone. The distributions are all the value there is. No final value.

    • Look at the trend of leasing cost and higher trust management fees as of late. See the Whiting website. The NI calculation seems to be getting hit by encroachment in cost. At these prices, I can't even think it is a breakeven. My rule would be count every remaining dividend at .25 and then buy. 10-11 dividends to go would mean a price of 2.50 to 2.75 for me to buy.

      Sentiment: Strong Sell

    • This is speculations! Their website stating that Trust will expire in August 2015, therefore there still 11 distributions. Many institutions involved in this trust. One way or another price will go up to amount divided by number of distributions plus some persentage (depending on price you get it). Trust will expire with zero value, but people will still make money

      Sentiment: Hold

      • 2 Replies to spikecactus
      • The date is a moving target based on when they reach the production limits defined in the trust agreement. If it goes longer then each distribution will be lower. If it finishes sooner then each distribution will be higher. It's the remaining production that determines how much royalty income is yet to be produced. That is updated in each distribution announcement press release.

      • Spikey,
        Please learn to read. It does not say it expires in Aug 2015.

        It says, "Based on the Trust’s reserve report for the underlying properties as of December 31, 2011, the 9.11 MMBOE of reserves (8.20 MMBOE to the 90% net profits interest) are projected to be produced from the underlying properties by August 31, 2015, which reflects expected year over year decline rates ranging from approximately 8% to 9% between 2012 and 2015. However, the rate of future production cannot be predicted with certainty, and 9.11 MMBOE (8.20 MMBOE to the 90% net profits interest) may be produced before or after the currently projected date."

        If you need a translation, declining production rates may stretch the termination of the trust until 2015 or beyond. That only means smaller distributions stretched out over a longer period of time.

        Furthermore, it specifically states the 9.11 MMBOE may be produced before or after the projected date. Translation, August 2015 is just a guess.

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