"Hopefully, the company leadership is working other angles and will announce alternative revenue streams"
Umm, it appears you have not the slightest idea what a trust is. Suggest a little due diligence on what you are holding here.
what management? this is a trust not a company.
There is no management, no employees at all.
of course you can't find it as you just made it up.
anyone who knows anything about what a trust is knows that would not be possible.
The trust is clear on their website that the trust is terminating in less than a year.
distributions going to zero is not the same as revenues being low.
The point is that the trust would still be making similar (or even higher) revenues compared to today but those revenues would be consumed by the higher chargeable costs leaving nothing left to pay as distributions.
So, the trust continues, makes good revenues but pays no distributions.
This will happen at some point, the only uncertainty is what year it begins.
OK, well I certainly don't agree with those oil price projections which is why my guesstimate differs from your model. But we are agreed that the current price is well overvalued in relation to future distributions.
like I said right at the close there was a spike down to 18.75 (after having been tied to 19 for most of the last hour), however the closing print shows as 19. I did pick up some at 19, however would not be surprised if it continues to drift a bit lower in coming days. I only took a starter position so plenty of room to add in case the price gets more attractive. At least my yield is above 7% which sounds psychologically better than a yield with a 6 handle on it.
Today's other MLP IPO was shocking. How is a variable distribution E&P MLP (VNOM) worth a 3.5% yield?
Not sure about your math (I expect the trust will pay more than that), however the chargeable costs issue is real and known by anyone who bothers to look at the trust document. Of course, most here prefer to invest blind and would rather buy without knowing what they are buying than to spend an hour doing research. I have pointed out the costs escalation (written into the trust terms) for several years now. Yes, starting in 2017-18 timeframe there will be a sharp drop in distributions with that drop extending each year. Depending on oil prices in that timeframe, trust distributions could indeed go to zero decades before the trust terminates. Of course that will make the trust units almost worthless as units in a declining trust that doesn't pay distributions are inherently of no value.
Again, I'm not sure on your math. I haven't constructed a model but I would guesstimate remaining distributions more like in the $50 range (could even pay the $35 before the escalation in costs kicks in) which is still half the current unit price, so I am not disputing your overall conclusion.
It was also a $3 'stock' about 18 months ago (I know because I bought it below $3 at end of 2012).
What changed since then?
Yes, NG prices went up a bit but DOM continues to abandon wells and forecast a termination date of 4-5 years out. And since then they also paid out a year and a half worth of distributions which means the trust is worth less now than it was then, not more.
Suggest you estimate 4 years or so of distributions to get an idea what this might be worth. Hint: still much less than the current price.
Take a lesson from WHX and GNI if you don't want to lose money.
I guess you think the trust should also be barred from publishing annual reports and issuing press releases since that is where the article's information came from. The trust has been telling you this for years now if you bothered to pay attention to your investments.
considering taking a starter position too but waiting till the end of the day to decide. Looks like some support around $19 however I have observed that often those support lines like that break down shortly before the close. Given the weak opening trading, I suspect a further drop into the close. Where it goes tomorrow, I am not guessing.
down to a little over 19 in the first hour of trading and still falling.
So at what price is it a buy?
The other MLP IPO (VNOM) today is going crazy on the upside so weakness in FELP is specific not market related.
Anyone could have seen this coming. It was grossly overvalued as I have written before and as the SA today pointed out. Also DOM has done this in the past. A couple of years ago it ran up to almost 20 before plunging back down to 10. The runup past $10 made no sense at all and it was clear it would reverse. Each time it does this I make some money via options.
The first step in investing is to get your tickers correct. Otherwise you end up buying Atlas Pipeline Partners (APL) when you wanted Apple (AAPL). In this case the target was for D not for DOM. Yes, they both have Dominion in the name.
It is surely possible however oil price spiking much higher would send the world into deep recession and that is not what us oil bulls want. Oil price is fine right now...oil companies can make enough money to be able to invest in new production while the price is not high enough to kill the global economy. But $20 higher it would be a different story. I am the biggest oil bull on this board but I do not want to see oil at $150. Do you not remember what followed the last time that happened?
I guess you don't actually follow this trust then otherwise you would know the answer to that silly question.
Try reading the press releases.
Because there is no oversupply. Global oil inventories are at the lowest levels since 2008.
If it wasn't for increased production in the US, oil prices would be far higher as the rest of the world has had flat production since 2005 and demand is rising each year.
And these current 'geo political issues' have huge potential to disrupt oil supply. We have seen how instability in Libya and Syria has almost totally stopped production/exports in those countries. If something similar happens in Iraq it will be a huge deal. The oil markets are just now waking up to that fact.
Yes, I'm fine and still investing as before. I just decided I was wasting too much time on yahoo boards so now only visit when I have a specific question. I still read the IV MLP board daily though.
As for FELP, the pricing is expected to be in the usual $19-21 range. Will be interesting to see whether is does indeed price in that range and where it moves after IPO. Yes, considering that all the coal MLPs except for ARLP have been struggling I also expected a higher yield. Must be due to the growth forecasts that they think they can price it at that level.
Why have they been unable to get domestic contracts? If they have such low cost production could they not price competitively in order to get market share?
why such a low yield?
Is it investible at the IPO price, in your opinion?
I haven't studied it but expected a higher yield.
Your 'analysis' only applies if you think it is a reasonable investment to just get your money back in 8 years with no profit (in other words give someone an interest free 8 year loan). I guess you are new at this investing lark, huh?