Seeking Alpha

Summary

The Trust has numerous issues that greatly increase the risk that isn't properly compensated for at current prices. The Trust is currently at least 24% overvalued, and possibly more if investors adjust their desired rate of return from the initially targeted rate of return. Investors are basically playing the BTU spread convergence (1 barrel of oil = 6 mmbtu of natural gas in energy output terms) while production declines at a fast rate.

Overview of Trust

Chesapeake Granite Wash Trust (CHKR) that allows unit holders to receive proceeds attributed to the royalty interest of a collection of wells controlled by Chesapeake Energy Corporation (CHK). The wells target the Oklahoma Colony Granite Wash formation located between...

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