Zegnus Deuce
Long/short equity, value, special situations, event-driven

Sabine Is Too Expensive Above $50

Sabine Royalty Trust (NYSE:SBR) was created in 1982 to hold royalty interests on oil and gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas. Initially, the trust's life was expected to be 9-10 years; however, the energy assets continue to produce for more than 30 years after its creation. As of January 1st, 2013, independent consultants estimate the trust's properties have reserves of 6.5M barrels of oil and 41.6B cubic feet of gas - a year-over-year increase of 12% in oil reserves and a 14% increase in natural gas reserves. The trust generates approximately 42% of its revenues from natural gas production and 58% from oil production.

Sabine has gained 30% year-to-date due to the...

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