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Hugoton Royalty Trust Message Board

  • geezer31 geezer31 Apr 23, 2014 11:38 AM Flag

    Can someone explain

    The decision so far says HGT will get (and pay) about $4 million in the May distribution. That's about 11 cents per share. So....why is the stock up more than a buck? Is there some recurring revenue as a result of this case, or are the amounts listed in the press release (about $7 million total, or 17 cents per share) the end? If it's the end, why is the stock up over a dollar? If there will be some recurring revenue as a result of the decision, what is it? Thanks!

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    • Yes, you are missing a few things Geezer31, but I commend you on trying to understand a Trust, they all vary, have quirks, declining proudtion, end of life etc...but those are other issues you need to watch for in a trust.

      IN this case, the return to the trust currenlty is only the $0.11, but this is just what was withheld already from a $37M Settlement XTO was trying to pass off as a production cost. This works out to slightly less than a $1 per share, but the "shares" had already sold off from $14 to $7 on the uncertainty, and the reality of a "dividend" stock...i.e. no dividends or low dividends for a few years, and dividend holders don't want it....

      So $1 plus legal fees and part of the $6 it was down on potential uncertainty for dividend investors...

      I don't see it going back to $14...,but so far the pop is not unreasonable.

    • Its up because the uncertainty is lifted and the pay out is safe. If they would have lost unit holders wouldn't have received a pay out for about a year or so. So now hopefully if gas prices stay high we can see it trade closer to its target price of $14 and get paid a nice dividend while waiting. Not to mention the pay out of the special dividend of 11 cents in May if it is correct figure others have posted. All is good.

    • It was a burden that has been on HGT's shoulder for several years and could have potentially permanently damaged the trust. However, things went their way and that burden has now been lifted and they won't have to deal with it again.

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