The discount is not always the same, either in dollars or as a percent. Since the price changes daily, some variation may be due to the days ROYT happens to deliver. It is hard to believe that the quality differential adjustment would vary very much. Perhaps you are correct, that I should only try to predict to 3 decimal points instead of 4, but then my reporting error could be greater depending on how the rounding error impacts the difference.
Excluding Feb. (short month), the last three months of 31 day production from existing wells was Dec, 101,323, Jan. 97,418, and Mar. 95,008. Whether this decline was the result of normal decline, or a direct result of decreasing production costs is hard to determine. In times of low oil prices (now) an intelligent operator would reduce steam injection, reducing both production costs and volume. If prices increase, then the operator can turn up the heat again. If this production decline is simply typical of aging wells (also normal), then we'll never see daily production increase again, and can expect continuing declines.
Why does the dividend need to be increased? When the market believes the current dividend can be maintained, we should see a price above $6 / share. At that point you could wish for a dividend increase. To do it before RSO achieves credibility is just throwing away cash and hurting the NAV.
If you paid any tax on LNCO distributions (unless you already had a zero tax basis), then you better get a better tax professional to amend your return.
LNCO dividends are tax-free "return of capital" until LINE earns taxable income. At present, LINE offers investors deductible losses as well as tax-free distributions.
Report should be dated Apr. 1! Actual earnings will not be released before mid-May, and are expected to show a GAAP loss before "adjustments" to create positive AFFO.
Although nominally a suit against ARCP, this action could ultimately recover 1/2 billion or so for investors!
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Yesterday WTI was quoted on Yahoo @ $57.73, on an "oil price" site @ $55.74, and a May futures price of $56.14, but Shell was actually paying only $52.40 at the refinery gate.
It is my contention that actual producers sell actual production to actual customers at actual (posted) prices, although "hedged" producers such as LNCO may make more money at the settlement of the hedges than they do from actually selling actual production.
US refineries post an actual price that they will pay for various types of crude, and this changes at least daily, based on available supply and demand. I'm not convinced this has any actual relationship to "cash settled futures contracts", which do not allow for delivery. Some producers (such as the Saudi's) post a monthly discount from an index, depending on where the crude is going. Is the "price" of oil determined by supply and demand, or by some other mechanism, in which price is controlled by forces which have absolutely no relationship to actual production or consumption? With current production exceeding demand, and storage nearing capacity, is there a point where reality can overwhealm the shell game?
Saudi's increasing production. China recently exported oil it can't use or store. US stockpiles still increasing. US output declining only slightly. Crude price to be manipulated up or down from here?
I would welcome that, as I'ld invest every penny (and more) that I received from recent sales. (Been there, done that, twice.)
Let's assume you are right. $60-$70 crude earns LNCO less than they currently earn on their hedges. For LNCO's long term earings to exceed current earnings, long term oil prices will have to exceed LNCO's average hedge prices. Not so sure we will see $90 oil any time soon, as that price level would stimulate substantial additional domestic production.
As oil prices show some improvement, how is LNCO impacted? Not much in the short run. as they are well-hedged, well above current prices. In the long run, is oil expected to get back to LNCO's current hedged price by the time those hedges expirwe?
I see zero chance of an increase in LNCO's dividend in the next year. At current prices, LNCO is paying a 10% return. No longer high enought to interest me. IRA funds tend to pour into stocks this time of year, often driving stock prices the seasonal highs.
I may miss a dividend or 3, but I'm on the sidelines until the yield goes back to 12%.
That was an old "estimate". The actual price received is the daily price posted by the refinery, minus a quality differential. Refinery prices change daily, based on the refinery's needs, not on price manipulation of WTI and Brent by market speculators.
"Wash sale" rules postpone deducting the loss, but that shouldn't stop you from day trading, as the profits you can make could significantly reduce the loss you finally report. Also, for tax purposes, LINE differs significantly from LNCO, so you should be able to sell one, buy the other, and not worry about a "wash sale".
Sentiment: Strong Buy
GDPAN, a convertible preferred, currently pays a huge dividend! Since all the directors appear to own preferred as well as common shares, it is a safe bet that the preferred dividend will continue, even though Scottrade and Yahoo refuse to acknowledge the quarterly payment that was made in March.
The sale seems to be related to an award of "phantom units" which will vest over 3 years. He took cash for real shares, since he holds a similar number of shares he got for free!
As long as the new preferred shares remain "unconverted", you can be sure they will prevent an increase in the common dividend, which currently has about the same yield as their equity investment. Since they hold 18% of common voting power, plus strong influence as debt holders, they have management's ear, as well as other parts of management's anatomy.