Most options expire worthless, so you might well lose your $12k and then you have to make $88k last 15 years. You are talking about gambling. You might just as well take the $100k and go to Vegas.
You are focusing only on reward and not considering risk at all.
What happens to you if the 'investment' totally fails and the money is mostly gone within 5 years?
You talk as though the only 2 choices available are an extremely risky trust with a high current distribution versus T-bills. In reality there are dozens of good, secure midstream MLPs which would be far more suitable for a secure income stream. They won't have as high a current yield but their distributions will go up over time rather than down like this trusts.
Got news for you...the trust has a defined lifetime and more importantly those advancing technologies will mean nothing since all drilling stops once the defined drilling obligation is completed which will occur within 6 months from now. Your comment indicates you do not understand the structure of this trust since those advanced technologoes will never be utilized here.
but winter only lasts a couple of months so that's not much of a rationale for investing. Unless you think spring will never come again.
book is meaningless. Since we know expectations for the assets have come down since the trust was created that implies that book value is well above actual current value of the assets. Book value reflects purchase price (adjusted for depletion), not current value.
"Declining asset ? "
Does the question mark imply that you were unaware this is a declining asset? News for you is that EVERY US royalty trust by definition is a declining asset. I thought you would be aware of that due to your experience with ECT. That is written into the regulations of US royalty trusts - they cannot add any more assets once the trust is created. The oil and gas they produce can never be replaced so their asset shrinks continuously from trust creation till termination. That is neither good or bad, it is simply what it is - the definition of a US trust which you are apparently unaware of despite being invested in several of them.
The fact that it is a declining asset with a limited future income stream and zero value at the end means it is even more important to purchase only when the current price is below a discounted estimate of total future distributions. I'm not making any comment about NDRO in saying that it's no wonder that so many investors have lost so much money in US trusts in the last few years when they have as little knowledge as you of what they are invested in.
Yes, NDRO and EVERY other US trust is a declining asset.
And no, nobody is paying me to point out your total incompetence as an investor.
No, it's you I am bashing. My comment didn't reflect anything on NDRO, only on you for basing your opinion on outdated yahoo target prices. You fail to see that the criticism is directed at you, not the trust.
"I looked up the reserve estimate (which is one of the primary concerns with a trust) and VOC has a estimated 50+ years of reservers"
The trust does not last that long, so it is meaningless to talk about 50 years of reserves.
Without checking the S-1, if I recall correctly it has a 20 year lifespan (starting from trust inception).
"How does QRE compare to other O&G MLPs?"
The table you copied is not comparing to MLPs or even to O&G companies. They appear to be completely different sectors and so it's a pointless comparison.
Apart from which, the price change is only one part of an MLP's return. If you want to compare total return you also need to factor in the distribution payments.
Ruby is the expert here wrt MLP taxation. But I've been investing in them a while so have a grasp of the basics.
Don't know about REITS but QRE and most MLPs tend to issue the K-1 in March timeframe. A few laggards may be in late March or even early April.
The title of the article together with the comment "this MLP should not be in anyone's portfolio" demonstrated right off the bat it was going to be a provocative and ridiculous article.
And he also ends with a demonstrably false statement:
"While MarkWest may be a growing company, its unit count is growing as fast as its business, meaning there is no distribution growth per unit."
"Investors should dump it and rotate into higher quality MLPs that can actually grow the distribution per unit."
Those statements are easily disproved by the fact that MWE has raised the distribution per unit every quarter for the last 3 years.
TNH is down a lot also.
Since all 3 of the fertilizer MLPs are down significantly, it is logical that they entire sector has deteriorating fundamentals and is out of favor, right?
Which doesn't mean it will last forever.
I don't own units and never have.
I am short puts which are in the money but that doesn't stop me rolling them forward each quarter for pretty good premium. I can do that indefinitely so the price decline doesn't particularly concern me,