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Tel Offshore Trust Message Board

  • snogreen snogreen Aug 15, 2006 8:29 AM Flag

    I'd avoid TELOZ

    I can't fathom why anyone would risk owning TELOZ. There are plenty other safer energy plays for you. I urge you all to read the 10-K and 10-Q. I think TELOZ is dead money, and might even be totally "dead meat". Problem basically is this.Near as I can see TELOZ has small interests in a LOT of offshore wells. About 200? (see 10-k). These properties were drilled in 1970's for most part. They are old. They need a lot of upkeep $$$ and face increasing costs and declining production. Forget what hurricnes cost to repair. Insurance may be neglible and slow in coming. I urge you all to study 10-K. Future value of revenues to TELOZ is about $48 million. But here is the major negative of TELOZ. TELOZ has only reserved about $6.4 million for special costs...such as plug, abandon and dismantleing OFFSHORE platforms and wells. These costs have skyrocketed to companies. Offshore well shut downs costs millions and millions per well.

    Say that TELOZ has interests in 200 OFFSHORE wells and platforms. TELOZ has reserved $6.4 million future costs. That works out to about $30,000 per well. That is NO WHERE near enough. TELOZ could EASILY face shut down expenses of at least (their share)$500k to $1 million per offshore well. Maybe more! If TELOZ has interest in 200 wells? That could top $200 million! All future revenues for TELOZ are about $48 million! (currently). So why do you want to own TELOZ. OLd offshore wells that are at the end of useful life, that is, compared to what they produced in the 1970's and 1980's. Maintaince costs only go up. Production goes down. Shut down and dis-mantle costs could easily top what teh whole value of future revenues are for TELOZ. And TELOZ has only reserved $6.4 million? I URGE you all to read what the operator, Chevron.told the trusteee. From the latest 10-Q:

    <Chevron, in its capacity as Managing General Partner of the Partnership, has advised the Trust that additional deposits to the Special Cost Escrow account may be required in future periods in connection with other production costs, other abandonment costs, other capital expenditures and changes in the estimates and factors described above. Such deposits could result in a significant reduction in Royalty income in the periods in which such deposits are made, including the possibility that no Royalty income would be received in such periods. >>

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    • This is a very well thought out explanation and my guess, on the money. There certainly superior trusts out there, e.g. BPT. However, it will pop up on the announcement of the reinstatement of royalty distributions. 25% aint chicken feed!

    • This is a very well thought out explanation and my guess, on the money. There certainly superior trusts out there, e.g. BPT. However, it will pop up on the announcement of the reinstatement of royalty distributions. 25% aint chicken feed!

    • look at cne pwe pwi pgh pvx aav,,,,,,all good yields but they are canadian......tru lrt are the 2 us ones i know of also the prudhoe bay one is a u.s also like the coal ones the oil-shippers>>>>fro vlcc,,,,,,and look at NEW......IT HAS A GREAT YIELD WHEN IT'S BELOW $40/SHARE!!!

    • How much Chevron bigs paying you Snogreen?

    • Thank you for the inspiration which lead to nice gains.If you like jazz I'd like to send you a CD.Jim

    • ast6965 asks me: "When you get a chance, could you please send a quick list of AmRoys that you favor."

      Despite the impression I might have left here over the years, I don't recommend stocks to others. However, I do not believe any of the trusts, excepting one or two are buys now.

      That said, I generally do like the gassy trusts, both US and Canadian, but I think they will go lower before going higher... but that is barring any major Gulf storms or another warm winter.


    • Isn't it so nice of snogreen to repeatedly spend so much time studying TELOZ's 10Q's and 10K's and report to us the error of our ways! Especially repeatedly using so much of his time on a security that he believes is almost worthless.

      Too bad snogreen is so totally naive about O&G and is such a poor reader. I pointed out previously to him how TELOZ does not have 200+ wells but why learn the facts when you can bash by twisting the facts to suit your personal needs.

      Too bad snogreen is so new and inexperienced with O&G investing that he doesn't understand the huge difference between the costs of dismantling a PLATFORM and simply plugging a well. As naive as he is, he likely believes a drilling platform must be dismantled to plug a well or maybe that each well has its own drilling platform.

      This party apparently hasn't read of all the NEW wells that have been drilled over the past several years on TELOZ lands.

      Yet this same party it totally enamored with LRT, a trust I wouldn't touch with a ten foot pole, no make that a 20 foot pole. Even EXXON-Mobile has given up on the Jay field there are such POOR drilling results, and that is about all LRT has left. But the pumpers there have so much faith in the reserve report is is silly.

      If one believe the TELOZ reports, TELOZ went completely dry about 7-8 years ago. Yet unlike LRT, where new drilling is done for now, Chevron continues to drill new wells on the LRT properties.

      Keep up your bashing and posting your misinformation, snogreen. But you better buy quick here because I'm getting ready to back up the truck. You are fortunate that apparently no one is taking you up on reading the 10Q and 10K's here. Otherwise they would see all the serious errors in your posts and just how misinformed you really are about TELOZ and also about LRT, I might add.

      But then, what do I know. I've only been doing this for almost 40 years now and almost bought the whole package LRT leases, pre-hurricanes, when it almost went under a few years ago.

      Unfortunately it seems many of the longs and non-bashers here are also misinformed about this trust.

      So snogreen, about the ONLY thing I agree with you on is that everyone should read the 10Q's and 10K's. Only hopefully their reading comprehension is much, much better than yours.


    • You are flat wrong if you think that the terms of the trust spell everything out 100%. Decisions are made within those terms. Decisions like the recent one to pocket some money to look for more oil. Why do you act like it is absolutely critical to be perfectly clear who makes these decisions when posting on this board? The decisions are made by an entity that I will refer to as TELOZ. TELOZ will do this and TELOZ will do that. If it makes you happy to say 'the managing group at Chevron through the trustee' will do this and 'the managing group at Chevron through the trustee' will do that then have at it!

    • No you don't understand. The "dude" is given information regarding revenues for a particular quarter and how much of those revenues were deposited in Teloz's name in the various reserve accounts. The levels of funding of those accounts is determined by the managing parter (Chevron) If and when there are excess revenues over and above those required to fund reserve accounts it is distributed as a dividend, as required by the trust. The "dude" just passes on this information making no dicisions. It is all laid out in the terms of the trust. end of story.

    • I know all that, but thanks for bringing up something entirely irrelevant!

      Just to make you happy... within the terms of the trust, a decision was made to suspend dividends through 2006. A decision could be made to restart dividends. When that happens, can I say 'TELOZ is paying difidends'? Or should I say 'the dude who passes on information Chevron is giving him is paying dividends'?

      You think a magic 8 ball makes the decisions? Are you so pessimistic that you think that the decisions made regarding the trust are not made in the interests of the trust? Who's interests are they being made in?

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