Greg Boop

The Search For Yield

The QoL website provides some good information on American Royalty Trusts including TELOZ:
www.quantumonline.com/...

American Royalty Trusts are a good possible alternative to the Canadian trusts; however there is a smaller selection of trusts available.

TELOZ is clearly a high yield leader, but may faces challenges if the natural gas yield declines. The gas production decreased at Ship Shoal 182/183; and other fields may be at risk. The pricing trend for natural gas is also not favorable; the average price received for natural gas decreasing to $6.46 per Mcf in the fourth quarter of 2007 compared to $7.78 per Mcf received in the third quarter of 2007.

The yield in oil only increased by 6% between the 3rd and 4th quarters with most of the profit associated with increasing oil prices. This increase in yield may not drive increasing pay outs for the trust.

The 15% may be a peak and the trust may have to reduce the payout level in the future depending on their asset performance.

The Search For Yield

A follow-up article discusses the challenges of Muni-Bonds and REITs in the current market environment:

Generating Yield – Muni Bond and REITs
hingefire.blogspot.com...