Page 57, 424B Filing.
"The expected increase in the annual decline rate over the course of this 20-year period is primarily a result of the assumption that no additional development drilling or other development expenditures will be made after 2014 on the Underlying Properties."
Couldn't help but chuckle as I read the WSCI 8-K filing today. I'm not the only shareholder less than pleased about the stock option rewards that mgt are handing themselves for non-performance. A surprisingly LARGE number of shares voted AGAINST the latest stock option plan.
Shareholders are simply tired of being treated like roadkill by incompetent corporate executives.
You doubled the plant size? Then, we need earnings to grow. PERIOD.
1. Production and Property Taxes will be about $1 M in Q1 and Q3, only about $300 - $400 K in Q2 and Q4. The payments vary because of timing of the due dates. Your assumptions include a level $1 M each Q. You're wrong.
2. They've told us that Q1 Development will be high because they simply can't move fast enough to shut down drilling and well improvement in this eroding price environment. They'll cut those costs severely by Q3/Q4. It appears you think these guys will barrel ahead at $3 to $4 M in Development costs every quarter. You're wrong.
In '15, they'll pump about 683 K barrels oil, 475 MMcf gas.. Assume oil at avg $55 for the year, gas at $3.75. Revenues will be about $39.5 M. Expenses will be about $28.7 M. Apply the 80%, back out about $800 K in Admin and you'll arrive at around .45 - .55 per share divy.
And that number is way conservative. They can apply any portion, or all, of their $1 M reserve at any point. Also, the Q1 reported numbers are sales from Sep - Nov .... when oil was in the 70 - 90 range. So, a .60 - .70 divy wouldn't be a shock.
Now, please, read the 424B filing. And if you can't present more rational views on the outlook, then go somewhere else on yahoo to post your junk.
Do yourself a huge favor. Read the 424B filing. Then, shut up and go away. Your ignorance with the numbers isn't adding any value here.
By the way. Merry Xmas.
Based on your example: If you buy a house this year for $250 K, then you're paying $250 K a year in rent.
They are spending now to drill and improve wells. That spending all but stops by YE 2016, then they milk the wells through 2030. Development costs today need to be viewed over a 16 - 18 year window.
Depletion is accounted for by estimated 6.2% annual drop in production through life of the trust. Life extend to the latter of 12/31/2030 or pumping of 10,600 Mboe. By YE 2014 will be at abut 3,125 Mboe. It's interesting to note that if you take the current status of production, and drop it by about 6.2% annually, you just about wind up right where you need to be by 12/31/2030. So, the pumping activity of this trust is right on target. However, if production drops faster than 6.2% .... that's OK, the life of the trust extends UNTIL they hit the 10,600 target.
Model that. Assume $55 oil in '15, only going up about $5 a year .... NPV is then $7.50 @ 10% discount rate. AND, that assume a very healthy drilling expenditure plan. If your calculations are only showing $4.67 ... then you've made a bad assumption somewhere. Likely, you are keeping well development costs (drilling) too high. They pretty much plan to halt that activity after '16.
Now that you fools have so mismanaged this company ... go ahead, reward yourselves with options. Do what American executives do best ... pay themselves well for miserable performance.
o You've doubled the plant size. Yet, earnings have gone nowhere.
o Year after year, you talk up revenue diversification. Yet, the revenues are more concentrated with just one customer, than ever.
o You ship out defective product, then fail to disclose the risks to shareholders.
o You keep us in the dark about the outlook for the business, feed us useless SEC filings, and offer us zero opportunity to hear conference calls and question management.
YOU ARE IDIOTS. NOT DESERVING OF BONUS, OPTIONS, or even TIME OF DAY.
But have a Merry XMas .... on the back of WSCI shareholders.
memeds2 - your analyses is S**T
Assuming they stay on pace to spend around $12 M in well development in '15, and oil averages around $55 ... divy will be in the ballpark of .40 - .50. So, twomovehigher, your calculations look solid.
If they were to cut the development costs down to about $5 M for the year, and oil stayed around $55, they could divy up to .75 - .80 for the year.
U R an idiot.
If they cut well development costs in half (which is reasonable given the current pricing environment), then VOC breakeven is around $30 oil. The Q numbers work out about like this
Oil at $30
Annual MBbls about 683 K, MMcf about 507
Revenues $22.3 M
Lease Operating $14.5 M
Prod and Property Taxes $1.8 M
Development $5 M
Net about $ 1 M
x 80% trust interest = $800 K
Admin $800 K
You idiot fear mongers need to find another board to post on. The people here have a handle on our investment in VOC. Simply put, you're a #($* fool not to be backing up the truck in the $5s.
And, if you read the Qs, you will note that the financials run 4 months ahead of production/sales. So, what gets reported in Q4 is actually production and sales from June, July and Aug. And, by the way ... oil was in the $80s in Oct, $70s in Nov. It won't be until Q2 of 2015 that the divy tails off.
Next time ... read the SEC filings.
Excuse me .... but how do you keep a straight face when you make this #$%$ up?
Page 9 of the latest 10-Q .... The reserve balance was $1,000,000 at September 30, 2014 and 2013.
And .... VOC Brazos has provided a letter of credit in the amount of $1 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.
At $55 oil, VOC will divy about .46 for the year. And NPV shows it's worth about $7.50 with oil averaging $55 over a 1 year period. And, that also assumes they stay at the blistering pace of $11 to $13 M a year in well development costs ... which they won't do.
Only a fool allows the stock to sit in the $5s without buying it hand over fist.
Leases run off at later of 10,600 MBoe or 12/30/2030. My projections show we'll be at about 3,125 MBoe at YE '14. About 30% done.
What doesn't make sense? All of it.
A couple key things about VOC:
Development costs (currently running $13 - $15 M annually) tail off at 2016.
Leases run thru 2030 or 10,600 MBoe.
Production drops about 6.2% annually.
Your back of the envelope attempt doesn't even come close to factoring in the complexity of this trust.
And, there is no bankruptcy, because there is no debt, and no operating company. If prices get too low, simply stop pumping, cap the wells until better times.
Yes, since I've owned this thing for awhile, participated in the rights offering, read the NCSR filings and the recent 424B filing ... cover to cover ... I would know. I do know. You idiots are overpaying for this stock at the moment, because you don't have a clue what you're buying. You're paying $9 for a basket of stocks that are worth 10 - 15% less. Why? Because you have the IQ of cow dung.
The people posting here now have the IQ of cow dung.
People, this is a closed-end fund. It owns stocks in companies that have little to nothing to do with Cuba. You have run this thing way beyond it's appropriate value. And, the last man out the door is going to be left holding all the losses. Next week, this pile of dung will be selling in the low 7s. Easy.
The current 20% discount to NAV is misleading. It does not take into consideration the dilution from the offering. Once the offering is effective and dilution happens, the NAV and discount to NAV fall significantly.
Got a call from another finance professional. We discussed this offering. This fund normally makes a YE distribution in Nov. It's already Dec, they have not yet announced their YE distribution. There is no clarity around how the YE distribution interplays with this offering. Unless the timing of the YE distribution is understood, it would be unwise to commit to the offering.
Worse case ... You give them money on Thursday with an understanding that share price will be about $7.40, NAV around $9.10. Assume max offering so diluted NAV comes in around $8.44. That would work out to a normal discount to NAV of about 11%. That's fair.
However, what if they pull a fast one .... after Thursday but before new money becomes shareholders, they announce YE distribution of say, $1. They make the record date before new shareholders come into the fund. The end result is a buy-in at a discount to NAV appreciably lower than the normal 11% ... thereby intentionally misleading new money ... giving them a terrible deal.
Until they put their YE distribution plans on paper ... it would be unwise to take down new shares.
Are we wrong?