I am gratified that SBR has been going up lately. I have been accumulating and the dividend is turgid. Anybody have any thoughts on what is going on lately. The rise in the price of crude has to be helping this stock.
Variability of the production numbers again caused a drop in the distribution and today was X-divi day..so the rebound in Crude didn't help much..I'm thinking this stock is a buy on further weakness anticipating next month's production will be back up again...Probably a good use of time would be to figure out what a moving average of production is. Anybody done that work yet...?
I have used regression analysis, moving averages, correlation with prior periods, and correlation with oil and gas pricing. Either lacking the necessary skills or predicting production is a crap shoot.
One thing in favor for long term holders is that the annual report of proved reserves contained in the SBR financials is strikingly similiar to those several years ago. I believe that as energy prices have increased this affects the proved reserves since some of the high cost of production oil and gas becomes profitable to extract as prices increase. In fact total proved reserves for oil and gas have changed from 1999 to 2006 by .85% and (3.63%) respectively. Pretty fantastic give that we own a "depleting" asset.
Also, assuming that production does not fall off a cliff, future distributions for the next few months should be very nice since the current months distribution is based on production and pricing from a few months earlier when oil began its climb.
Will be interesting what the distribution is this month. Usually gets announced between 11:00 AM and 12: PM ET on the 3rd business day of the month which is today. Last month at $.43 was great.
While the price of oil and gas certainly affects the distribution, the production numbers tend to have the most effect on the distribution amount. I have tried to predict production based on past numbers and have failed miserably.