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Hugoton Royalty Trust Message Board

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  • buymois buymois Nov 27, 2012 1:46 PM Flag

    Latest Dividend

    Not sure why this should go up much when you are looking at such an iffy dividend situation in a few months. You can buy MTR which has had a $.15 dividend the last three months and seemingly does not have any of the dividend obstacles hanging over them that HGT has. Three times the dividend at only 2.6 times the price of HGT, without the uncertainty.

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    • MTR is trading 40% higher than HGT on a PV10 basis. On a $ per Mboe it also trades multiples higher. The HGT divs will revert back (barring legal setbacks). Both are buys, but the inherent upside is much larger with HGT (as well a the risk). I don't think its an obvious choice.

      • 5 Replies to jaqsports
      • MTR revenues are 35% from liquids (oil) and HGT revenues are 22% from liquids, which means more revenues from higher value oil for MTR (this would probably distort the $ per Mboe number you quote). I'm not convinced the unaudited PV10 numbers for a small trust like MTR are very accurate. I do accept them as a minor piece of evidence but not be all and end all evidence as far as I am concerned.

      • jaqsports, I don't know when trust is expected to end. MTR was formed in 1979 and I'm quite certain that over the years there have been estimates that the trust would end long before now, so I don't put much stock in these end of trust estimates. It would be based on the unaudited PV10 analysis, which I don't believe are very accurate for these trusts.

      • I don't think end of trust estimates mean too much. MTR was formed in 1979 and I'm quite positive that somewhere along the line they estimated that it would end long before 2012. It's kind of linked to the PV10 analysis, which I don't put much stock in for small trusts.

      • Tried to respond a couple of times, but it gets blocked for some reason.
        yes, I meant liquids.
        I agree HGT might be a good speculative play - I think it's kind of like a biotech with a couple of promising drugs in phase II trials.

      • I meant liquids. I don't put much stock in the end of trust estimates. MTR was established in 1979 and I am quite certain that there were estimates made along the way that the trust would end way before 2012. It seems to me that it's linked in to the PV10 analysis, which I don't pay too much attention to for small trusts. I have invested in HGT over the years (just not currently) and I agree that it could be a good speculative play. To me it's equivalent to investing in a biotech that has a couple of fairly promising drugs in Phase II trials.

    • we are expecting a 10+ price after the settlement is paid off. That would be about 50% gain in 18 months (or so). Do the math.

2.38-0.18(-7.08%)Sep 30 4:00 PMEDT