to reiterate the point made by prior poster, an engineering firm reports on the value of remaining proven reserves was published in the full year 10-Q. this value is required by SEC to be based on natuarl gas prices obtained in the last 12 months (lowest prices in decades and now substantially higher) and are identifyed in the report as $79.1 Million as standardized DISCOUNTED value of the revenues from the poroduction of these proven reserves thru 2030. the discount rate applied ot this revenue stream is 10%.
applying nat gas prices that are more realistic or even in line with current pricing and modest price increase and a lesser more realistic discount rate of 6% will yeild a standardized discounted value well above $100M
The market cap of the ECT Marcellus Trust I at the close of todays oversold condition is just over $52M.
I am a buyer at these levels. If it goes down more I may sell my golf clubs or the wifes jewelry and buy some more.
are you dumb? the current market cap is $203 million, even after todays close. So it's still 2x overvalued, and your analysis would be inline with the seeking alphas projections of $6.50/share fair value.
I don't necessarily buy into the $6.50 figure in the latest article, but read the earlier article on SA by Daniel R Moore entitled "ECA Marcellus Trust Is An Expensive Natural Gas Play - Income Investors Beware".
His articles are pretty balanced and don't appear to be biased in either direction, rather simply valuation and reserve analyses from the trust's SEC filings. He has been doing a series of similar valuations on SDT, SDT, PER, WHZ, CHKR and ECT. Today he came out with a negative report on CHKR, but a positive one on SDR which indicates he is not negative across the board. Some of this article's conclusions are used in the latest article however Daniel Moore did not have the $6.50 price target, even though it came to the conclusion that is was greatly overvalued (before the recent crash).
So if Ect distributes 100 million over 17 years that would average about 6 million a year. Since there are 4.5 million shares outstanding that would be about 1.33 a year for 17 years which comes to about twice as much as the currrent price meaning a yearly yield of 6%. Not bad if that's how it plays out.
omg, you have no business investing if that is a serious attempt at analysis. your share count is wrong. the distributions won't be steady. and if 100m is distributed you still lose 50% of your money since current market cap is 200m. moreover, you lose 17 years worth of investing time. hows that for a negative real return?