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Chesapeake Granite Wash Trust Message Board

  • paullessard314 paullessard314 Aug 13, 2013 10:22 AM Flag

    Decreased output = No dividend

    Did i get the jest that volumes may decline sufficiency that they may not make the stated dividend by the 4th q this year

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    • possibility of not making the subordination threshold amount but that does not equal "no dividend"

    • several reasons that the dividend will continue. First commodity prices are doing good not bad. NG may indeed get better and oil should at least hold its place above 90. The real question is not so much the price of commodities but what CHRK sells them for. The lagging price they get for NG which was up over 60 cents this quarter from last needs to continue to improve. But even without the money that CHK ponied up this quarter just production and sales alone would of resulted in a dividend. The dividend will be supported by CHK until this time in 2017 if drilling continues to slow down. At today's price I think one could expect at least a 15% average return over the next 4 years which would leave you only invested at 40% of the price you paid. After the chk kick in ends overall production, commodity price and ability of CHK the trustee to get a good price will then alone determind the value of the dividend and thus the stock. Where they are drilling the wells usually have a long life for oil so in 4 years with all wells drilled the production numbers even if lower than this quarter would produce a profit. Nothing wrong with pumping oil eithers as it is done today with positive cash flow and profit as a result. This is a LT term play. For those of us who bought in a higher prices expecting more of a positive results we may expect to regroup our orginal investment over the long haul in dividends which of course would prove to be a bad investment. I expect to get my investment back plus a small profit. You win some and lose some. If you buy in today at this cheap price I see no way that you will not make money if commodity prices at least hold. Howver 15 years is a long time to look down the road. We are married at the hip with CHK until at least the 2017 date passes and I doubt seeking a new trustee would be a waste of time and money after that.

      • 1 Reply to rogere1946
      • well said rogere.....well said. Was thinking of buying more...scaling down if she continues that way. I think NG has bottomed...ish..... It takes awhile for everyone to jump on board the nat gas train, but I think its happening. All the chesapeake employees I know own this stock. We might even get a little bump as investors flee a crashing market, seeking high yielding dividend paying stocks. We shall see, but I think you summarized the situation pretty well.

    • NO.....apparantly not. Hence the stock price rise today.

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