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Zegnus Deuce

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  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    Hello Seek, CHKR shares will NOT be converted to CHK shares after Q2 of 2017. The subordinate threshold expires after Q2 2017. At the end of Q2 2017 the subordinate units, which are owned by CHK, will be converted to CHKR common units.
    Oct 23 08:45 AM | Likes Like |Link to Comment
  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    Hello Brian, It looks like you have it covered.
    Oct 18 01:42 AM | Likes Like |Link to Comment
  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    Hello Factzplz,
    Thank you for your comment. I appreciate you pointing out what was missing from the article. You made some great points. In the future I will add more sections to fill in the background. Your feedback is welcomed and appreciated.

    I did not consider the target levels to be important considering CHKR did not state them in their last 10k but they did state the incentive and subordinate thresholds.

    CHKR's pre-filing documents lists the subordinate, target and incentive distribution on p. 54. The targets where based on price levels starting at approx 4.00 in Q1 2012 and rising to 5.00 $/mmbtu in Q2 2014. They missed their levels in 2012. They could knock it "out of the park" for the remaining life of the trust but by looking at the average production curve of a horizontal well in the Granite Trust I don't think there production will be timed high gas rates. I would rather own the company that has the drilling and servicing contract, and that gets half of the revenue from the 118 Development Wells. The unit trust has a finite life and limited resources.

    I do not think the revenue levels will be high enough during the life of the trust to justify what it is trading at today. There are plenty of people who own it and believe it is worth their capital. Best of luck to them.
    Sep 25 01:16 AM | 1 Like Like |Link to Comment
  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    Hello RPapirner,
    Thank you for your question. I am staying away from the royalty trusts. If you are looking for income then look to midstream MLPs.
    Sep 25 12:27 AM | Likes Like |Link to Comment
  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    No aschroed, I am not short.
    Sep 25 12:24 AM | Likes Like |Link to Comment
  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    Thank you, Gigem for the comment. I agree with the bullish case for Nat Gas but I don't think CHKR is the way to capture it. CHKR's pre-filing documents lists the subordinate, target and incentive distribution on p. 54. The targets where based on price levels starting at approx 4.00 in Q1 2012 and rising to 5.00 $/mmbtu in Q2 2014. You are right that wells can be reworked but I think there are better opportunities in the current market then CHKR like the E&Ps, pipelines, and service companies without taking the risk of the how much product can be produced when the well is reworked. If I had to chose between CHK and CHKR then I would take CHK because it has the drilling contract and 50% of the revenues from the 118 Developmental Wells. I'd rather own CHK because I am more comfortable with their future prospects then with what CHKR can do with the resources available to it. BTW, I do not have a position in CHK.
    Sep 25 12:22 AM | 1 Like Like |Link to Comment
  • Don't Buy Chesapeake Granite Wash Trust At $20 [View article]
    I appreciate your comment. I see CHKR as an asset that will produce the majority of its product at lower values and its production yields will not be significant enough to get a full repayment of capital. You disagree and that is why we have a market. The horizontal well graph tells the story for me. I have no clue where the Nat Gas price is going to be in 2017 but I don't think CHKRs production will be high enough to take advantage of the higher values. There are other ways take advantage of Nat Gas (i.e. pipelines and E&Ps). I like pipelines and E&Ps and would rather own them then take on the risk of timing when to sell the unit trust shares. If you are long CHKR then best of luck.I do not have a position nor do I plan to take one. Thank you for your time and feedback.
    Sep 24 11:42 PM | 1 Like Like |Link to Comment
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