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Dorchester Hugoton, Ltd. (DHULZ) Message Board

  • rrb1981 rrb1981 Apr 20, 2001 1:54 PM Flag

    Only 10 years left of production?

    Thats not too great but I'll be more than happy to draw cash off for those 10 years. What happens when the wells go dry? Do they liquidate everything and split it up amongst share holders?

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    • Well I guess great minds think alike(hehe) well my father is a M.E. as well and he hopes to be re"tired" in about 4 or 5 years. DHULZ cetrainly seems like a sleeper to me, very little volume(maybe because management holds huge blocks) and the fact that not that many shares are oustanding in the first place. Overall, it looks pretty solid and I like the fact that its main customers (according to Hoovers)are Williams and Duke. Kind of wish we'd get in that "predicament" like Barrett Resources where RD Shell is trying to buy them and the share price shot up 10 points above the offered takeover price. Ok just wishful thinking.

    • I think I wrote "at least 10 years". The odds are very good that production will continue for far longer based on the prolific gas producing zones in Oklahoma, Kansas, and the adjacent states.
      The good thing about natural gas is that zone fracturing has proven to enhance production is virtually all cases (not all!). The bad thing about oil wells is that when they become "stripper wells" (less than 10 b/d), very little is possible to significantly enhance oil production.
      That is the main reason why I like investing in natural gas. Oil investing can be profitable but unfortunately the really attractive oil areas today are no longer in the U.S.

      I would hope that long before the DHULZ wells begin to produce poorly, a larger and more financially capable company will have come along and bought out the DHULZ properties, thus assuring that our investment is successful in addition to the annual distribution.

      • 1 Reply to JAVELIN2625
      • Well lets hope we have at least 10 solid years of production and then maybe another 10 years of declining production. I just want this one to milk it for the distribution and it has lots of upside if nat gas shoots up and stays up for say a year or two then distribution shoots up due to law mandating 95% of income must be passed on to unit holders. Sure would be nice if we would hit 10% either through anothr dist. increase or unit decrease(yikes, di I say that) in which case I'll buy more. Thanks again for info. By the way, do you reinvest distributions?