As those familiar with my articles know, I analyze trusts using a bottom-up, engineering-style model that considers forecasts of production, sales prices, and expenses and unique underlying circumstances. I recently added Permian Basin Royalty Trust (NYSE:PBT) to the stable of trusts that I follow and this article discusses the assumptions of the model and its resulting valuation.
Distribution set to rise
PBT is an oil and gas trust operated by Burlington Resources, a subsidiary of ConocoPhillips (NYSE:COP), with long-life, mature wells in the state of Texas. PBT is investing in a sizable capital investment program and, along with increased costs, is realizing increased production.
|FREE||SA PRO MEMBERS|
|IDEA GENERATOR||X||Exclusive access to 10 PRO ideas every day|
|INVESTING IDEAS LIBRARY||X||Exclusive access to PRO library of more than 15,000 ideas|
|SECTOR EXPERT NETWORK||X||Exclusive access to all sector experts for direct consultation|
|PERFORMANCE TRACKING||X||Track performance of all PRO stock ideas|
|PROFESSIONAL TOOLS||X||Professional Idea Filters to zero-in based on industry, market cap and more|