Seeking Alpha

Daniel R Moore

 
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  • Chesapeake Granite Wash - Distributions Diving, Hope Trade Continues
     • Mon, Nov. 17 CHKR 4 Comments

    Summary

    • Chesapeake Granite Wash Trust announced a quarterly distribution on November 6th of $0.5067, 12.6% lower than the previous quarter, confirming the expected trend to lower lows.
    • Production for the quarter was flat relative to the previous quarter at 659 MBOE, but far below the year earlier level of 849 MBOE.
    • The decline in performance can be traced primarily to poor well performance and slower drilling activity.
    • The current traded price is substantially overvalued relative to its market peer group, trading at 1.76 times the latest PV-10 adjusted for depletion and a 1.5% implied rate of return.
    • This report provides a detailed analysis on why CHKR is severely overvalued.
  • ECA Marcellus Trust I - 3Q Distributions Gap Down Again
     • Wed, Nov. 12 ECT 3 Comments

    Summary

    • ECA Marcellus Trust I (ECT) announced a quarterly distribution on November 7th of $0.203 for common unit holders, a (27.8%) decline from the previous quarter.
    • Distributable income for the quarter was $3.57M, $1.38M below the previous quarter.
    • Production for the quarter was in-line with the expected decline model at 1471 Mcf even though one well was shut down for four weeks during the quarter.
    • Based on remaining estimates of proven reserves and current expected future gas price levels, the current Trust market price level implies a 7.5% rate of return through Trust termination.
    • This article provides a fundamental analysis of production trends, delivery costs and natural gas pricing trends to help investors assess the fair value of ECT as an investment.
  • SandRidge Mississippian Trust II- Has The Falling Knife Finally Hit Bottom?
     • Thu, Nov. 6 SDR 4 Comments

    Summary

    • On October 30th SandRidge Mississippian Trust II announced distributable income for its June through August production quarter of $14.98M - $.402 per common unit, $0.00 per subordinated unit.
    • Production for the quarter, impacted by continued poor well performance and no drilling activity decrease to 376 MBOE, far below the year earlier level of 541 MBOE.
    • Trust drilling completion was delayed at least one quarter, now likely in the current Aug-Nov production quarter.
    • Current results reflect the expected adjustment of production volume to a much greater and less valuable mix of NGL in the Trust product mix.
    • This article provides investors updated information about Trust proven reserves, production and product pricing trends to assess whether SDR units are currently fairly valued.
  • SandRidge Permian Trust - Struck By The $80 Oil Lightning Bolt
     • Mon, Nov. 3 PER 18 Comments

    Summary

    • SandRidge Permian Trust announced a quarterly distribution on October 30th of $0.656 for common unit holders, a good news target level distribution.
    • Distributable income for the quarter was $28.2M, which on a fully diluted per unit basis was below threshold, so subordinated units received only $0.184 per unit.
    • Production for the quarter was 360 MBOE, down 11% year-over-year as drilling activity is no longer able to replace production from declining production in older wells.
    • Post the quarter end (August), oil prices dropped severely across the entire forward curve to the $80 range.
    • This article review of the Trust valuation with respect to the expected impact from drilling completion, expiration oil hedges in March 2015, and a sensitivity to oil price moves.
  • Watch Excess Reserves Post QE3 To Gauge Stock Market Risk
    Thu, Oct. 30 DIA, SPY, QQQ 8 Comments

    Summary

    • This article examines the question - With the QE program ending for the time being, will the stock market suffer from the change?
    • The large accumulation of Excess Reserves in the banking system caused by the program is looked at relative to changes in equity valuations and current economic activity.
    • Post QE3, the way in which the Excess Reserve balance is managed will be an important data point to watch to gauge future Fed moves.
    • The author concludes that currently the equity market has a bias upward, but investors overexposed with low cash balances or excess margin should lower exposure by selling rallies.
  • Think The Market Is Peaking? Remember 2000 And 2007
    Mon, Sep. 8 26 Comments

    Summary

    • As the 4th quarter of 2014 approaches, equities are expensive, approaching historical warning zones on many relative measures.
    • This article presents a means of reviewing how “rich” equity values presently have become by analyzing how the stock market historically trades relative to U.S. GDP.
    • Saying equities are expensive is not the equivalent of assessing the risk of an impending market downturn.
    • To help investors assess the likelihood of an imminent major market correction, this article looks at the status of four major influencing market forces.
    • The forces, Fed Policy, U.S. Fiscal Policy, GDP Growth Sustainability and Energy Market Price Volatility, are all looked at in the context of the year 2000 and 2007 market peaks.
  • Chesapeake Granite Wash - Seriously, This Junk Is Worth $11 Per Share?
       • Sat, Aug. 30 CHKR 43 Comments

    Summary

    • Chesapeake Granite Wash Trust announced a quarterly distribution on August 7th of $0.5796 for common unit holders based on distributable income of $20.3M, both well below year ago values.
    • Production for the quarter was flat relative to the previous quarter at 674 MBOE, but far below the year earlier level of 881 MBOE.
    • Trust drilling is 80% complete and expected to be finished in the 2nd quarter of 2015.
    • The current traded price of the Trust is 1.74 times the latest PV-10 and reflects an implied rate of return of only 1.25%.
    • This report provides details on why CHKR is considered severely overvalued.
  • ECA Marcellus Trust I - Value Play Or Value Trap?
       • Thu, Aug. 28 ECT 2 Comments

    Summary

    • ECA Marcellus Trust I (ECT) announced a quarterly distribution on August 7th of $0.281 for common unit holders, a reduction of $.053 per unit from the prior quarter.
    • Distributable income for the quarter was $4.95M, $1.44M below the previous quarter, a 22.5% downward spike.
    • Production for the quarter was in-line with the expected decline model at 1516 Mcf.
    • The current Trust market price level implies a 6.2% rate of return to investors through Trust termination in 2030.
    • Based on the analysis in this article, in my opinion, the units have room to decline in value further before becoming a good value play.
  • SandRidge Mississippian Trust II- Nightmare Turning Into Reality
       • Wed, Aug. 13 SDR 18 Comments

    Summary

    • SandRidge Mississippian Trust II announced a quarterly distribution on July 31st of $0.486 for common unit holders.
    • Distributable income for the quarter was $18.1M, which on a fully diluted per unit basis was below threshold, so subordinated units received $0.00 per unit.
    • Production for the quarter continued to decrease sharply at 392 MBOE, far below the year earlier level of 651 MBOE.
    • Risk remains high that proven reserves currently reported by the Trust are lower than presently represented in public financial documents.
    • Based on the considered riskiness of current estimates of proven reserves and expected future oil and gas price levels, the current Trust market price level is considered overvalued.
  • SandRidge Permian Trust: Solid Results, Fairly Valued
       • Wed, Aug. 6 PER 49 Comments

    Summary

    • SandRidge Permian Trust announced a quarterly distribution on July 31st of $0.632 for common unit holders.
    • Distributable income for the quarter was $30.6M, which on a fully diluted per unit basis was below threshold, so subordinated units received only $0.432 per unit.
    • Production for the quarter was in-line with previous models published at 382 MBOE, virtually flat year over year reflecting drilling activity that has replaced production from declining older wells.
    • Trust drilling is expected to complete by the end of the 4th quarter 2014.
    • The August 1st Trust market price level of $12.66 is considered fair and implies a 9% rate of return to investors through Trust termination in 2031.
  • Watch Out For The Buyback Taper
    Editors' Pick • Wed, Jun. 4 DIA, AXP, AZN 61 Comments

    Summary

    • Blue Chip companies have increasingly traded off capital formation for share buybacks over the last 15 months.
    • Data show that 27 out of 30 DOW companies since the end of 2012 have reduced shares outstanding, and that buy-backs in aggregate exceeded economic profitability.
    • Breaking the data down by company, a large sub-set of weak companies surface which will only be able to recover by raising price levels or executing strategic M&A transactions.
  • Nervous Investors Move To Bonds Just Like Belgium?
    Mon, May. 19 AMZN, DIA, FB 18 Comments

    Summary

    • Recent Treasury International Capital Report (TIC) shows anomaly in the growth foreign ownership of U.S. Treasuries held in Belgium.
    • Further analysis of the source of funds to finance the U.S. deficit shows Belgium and the Fed are the only two buyers on the margin currently driving rates lower.
    • Unsettling data also is showing up in the deceleration of margin debt, which may be a signal of a market top.
    • Author likes middle of the road Value over Growth Investing Strategy using high paying Dividend and Preferred stocks in this environment.
  • Market Winds Are Shifting - Time To Assess The Signals
    Editors' Pick • Tue, May. 6 BP, COP, CVX 27 Comments

    Summary

    • A review of the current U.S. equity market based on a 7 factor heuristic model highly correlated with historical major market declines shows shifting market trends.
    • Market factors considered in the model include market trading patterns, relative interest rate spreads and 1st derivative changes in energy price levels, government expenditure growth and Fed policy.
    • Signals indicate that the equity market likely still has a near term upward bias, but alternative portfolio investments on the margin are better relative choices at this time.
  • Emerging Market Debt Options To Hedge Fed Taper And Stock Volatility
    Wed, Apr. 9 TEI, EMD 6 Comments

    Summary

    • Emerging Market Debt Funds (TEI) (EMD) are relatively undervalued at this time and are likely to provide above average risk reward returns over the next several years.
    • The major market correction in Emerging Market Debt in 2013 while U.S. stocks made a major run upward is very similar to conditions experienced in the late 1990s.
    • The article analyzes what happened to TEI and EMD during the late 1990s, and compares the pricing action to current market conditions in the two time periods.
  • ECA Marcellus Trust I - Still An Expensive Natural Gas Pure Play
       • Fri, Apr. 4 ECT 22 Comments

    Summary

    • ECT units current trade at a 1.74 multiple of the 12/31/2013 PV-10, comparatively high to industry peers.
    • Supportive natural gas derivative contracts expired in March 2014, a negative for distributions beginning in August 2014.
    • A model of expected future distributable Trust income shows the current unit traded value is unrealistically high relative to market risk.
  • SandRidge Mississippian Trust II: PV-10 Reflects Another Mississippian Nightmare In The Making
       • Thu, Mar. 20 SDR 48 Comments

    Summary

    • SDR recorded a 3338 MBOE downward adjustment (13.2%) to proven reserves in the latest PV-10 due to well performance issues.
    • PV-10 per unit fell to $7.62 at year 2012, a 43.6% decline from the April 2012 IPO standard measure.
    • Downward trajectory of PV-10 revision is highly correlated with (SDT) proven reserve historical results (SDT is the sister Trust of SDR which went IPO in April 2011).
    • Recommended Target Valuation Lowered to $7 per unit, in-line with $6 SDT Target.
  • Chesapeake Granite Wash PV-10 Update - Disaster Continues
       • Tue, Mar. 18 CHKR 23 Comments

    Summary

    • Newly published 12/31/2013 PV-10 shows an additional 6,220 MBOE reduction due to well performance (22% Year-over-Year).
    • Overall the Trust has seen an impairment of 36.9% of proven reserves due to well performance issues.
    • Closing price of $11 per unit on 3/14/2014 is 1.62 times the updated PV-10 value of $6.72; shares are considered grossly overvalued given continued high risk.
  • SandRidge Mississippian Trust I - PV-10 Update Reveals 'Pig In A Poke'
    Editors' Pick • Mon, Mar. 17 SDT 29 Comments

    Summary

    • SDT PV-10 Report published on 3/14/2013 shows a major 3032 MBOE reduction (22.3% year-to-year) due to well performance.
    • Since IPO, the Trust has reported a 25.7% reduction in reserves due to well performance.
    • Combined product mix changes due to lower oil production and continued well performance risk make these units unattractively overpriced at price levels above the $6.23 PV-10.
  • SandRidge Permian Trust- Ugly Updated PV-10 Priced In?
       • Fri, Mar. 7 PER 26 Comments

    Summary

    • PV-10 published on 2/28/2013 showed 2,192 MBOE downward revision in reserves - a greater than 10% drop relative to IPO levels.
    • Energy price curve upward move recently off-setting negative reserve revisions.
    • Price Target lowered to $12 per unit; upside possible if Forward Oil Price Curve breaks out and is sustained above $100 per barrel contrary to current market view.
  • SandRidge Permian Trust- Q4'13 Results Show Risk And Reward
       • Fri, Feb. 7 PER 41 Comments
  • Bernanke's Legacy - Lessons In QE And An 800-Lb Gorilla
    Thu, Jan. 30 DBO, DIA, GLD 11 Comments
  • Is Your Portfolio Positioned For The 2014 Stock Market Pull-Back Game?
    Sun, Jan. 19 AGG, BBT, BKLN 65 Comments
  • Dogs Barking In The Dow, Value Or Warning Signals?
    Wed, Jan. 8 BP, CSCO, CVX 9 Comments
  • Oil & Gas Royalty Trusts - Opportunities Or Value Traps?
    Editors' Pick • Dec. 29, 2013 CHK, CHKR, DIA 26 Comments
  • Credit Markets Signal Stock Market Party To Continue In 2014
    Dec. 22, 2013 AAL, DAL, DIA 6 Comments
  • S&P 500 Up 20% In 2014? Re-Live The Bubbling 1990s
    Editors' Pick • Dec. 4, 2013 SPY 28 Comments
  • Gold - What Are Investors Afraid Of Now?
    Nov. 26, 2013 AGOL, DIA, GLD 23 Comments
  • Fed Tapering History - Revealing Data Investors Need To Know
    Nov. 18, 2013 DOW, MUB, PFF 4 Comments
  • SandRidge Mississippian Trust II: Third Quarter Results Down, Units Oversold
       • Nov. 12, 2013 SDR 50 Comments
  • SandRidge Permian Trust: Third Quarter Results Show Solid Performance
       • Nov. 12, 2013 PER 22 Comments
  • Chesapeake Granite Wash Trust Q3 Results - Expect Pain To Continue
       • Nov. 11, 2013 CHKR 17 Comments
  • SandRidge Mississippian Trust I - Q3'13 Results Poor, Risk Elevated
    Editors' Pick • Nov. 6, 2013 SDT 23 Comments