Shares of Hugoton Royalty Trust (HGT -22.9%) plunge as a Sir Perfluis analysis on Seeking Alpha...

Shares of Hugoton Royalty Trust (HGT -22.9%) plunge as a Sir Perfluis analysis on Seeking Alpha says "purchasing HGT units at current prices is like buying 60 cents for a dollar... Quite literally, unless natural gas prices stage a rally, a current HGT unit-holder can expect to receive total cash flows of less than the current share price."

From other sites
Comments (8)
  • HighOak
    , contributor
    Comments (85) | Send Message
    Incorrect, it is down because HGT disclosed in their Friday dividend release (after the close Friday) that a legal settlement will result in a much smaller dividend for the next 18 months. It was disclosed in the 10Q, but no one picked it up until Friday when the dividend for this month was announced. Also disclosed is that there are additional and similar suits that obviously could adversely affect future dividends. Look at the action on the stock, this is a two day event so far and has nothing to do with the article on seeking alpha.
    22 May 2012, 11:25 AM Reply Like
  • josey wales28
    , contributor
    Comments (6) | Send Message
    what do u think ...'HIGH OAK' im long on hgt...ur comment make me feel better...THANKS!!!
    22 May 2012, 12:33 PM Reply Like
  • josey wales28
    , contributor
    Comments (6) | Send Message
    i'm in long for HGT,ur comment is giving me hope...what do u think ...thanks HIGH OAK
    22 May 2012, 12:31 PM Reply Like
  • Matthew Lewis
    , contributor
    Comments (497) | Send Message
    Come on some research. It's clearly due to the legal settlement.
    22 May 2012, 01:08 PM Reply Like
  • Miggoty1
    , contributor
    Comment (1) | Send Message
    over what timeframe will the settlement be paid? lump sum or amortized?
    22 May 2012, 06:17 PM Reply Like
  • rholcomb
    , contributor
    Comments (56) | Send Message
    seems to be plenty of assumptions. we're never at a loss for assumptions and many of them prove to be invalid, but I guess it's something to go on for some -namely the emotional crowd. after watching this trainwreck...I wonder, given the leverage to nat gas, how HGT might look if the current recovery rally, bounce,dead cat bounce, retracement, in NG makes it back only to resistance of 3.50 and even a possible $4 lid. While $4 probably would be too high to maintain in the near term, I wonder where equilibrium really reflects in reality as production continues to be curtailed and output is shut in as the industry works toward the conduits needed to export this stuff to where the prices are far from the $2&3 dollar range. The legal issues overhang is a known and HGT isnt' the only one, for sure, and this event is a big pill to stomach given the est'd 18mo digestion period, but it might not be quite as bad as what the movie depicts at the moment if only the lower nat gas price train(helping to drive this lynching) everyone is looking for doesn't show up and has already come and gone. As for Perfluis' assertion...I suppose it makes some sense for now but that, in and of itself, is only more speculation on this side of the trade.
    22 May 2012, 06:29 PM Reply Like
  • josey wales28
    , contributor
    Comments (6) | Send Message
    22 May 2012, 11:48 PM Reply Like
  • Mike4911
    , contributor
    Comments (118) | Send Message
    In 2011, it they reported the standard language "we think lawsuit is merit-less; we will vigorously defend."


    Seems like there should have been more detail, i.e. language that this could have a material result.


    Also, there was no notice of the change in stance. Settlement negotiations don't happen overnight.


    To make it worse, BofA as trustee was supposed to be looking out for unitholders.


    Who negotiated the settlement and what does it say? Did the trust, responsible for paying 80% of it, have any representation?


    Last, it seems that XTO was cheating the plaintiffs. We all understand the risks of these trusts -- a property experiencing change in price for the product, unexpected maintenance, quicker depletion, etc.


    But for years everyone purchasing the trust relied on XTO/Exxon's representation of income/profit. Don't they have liability for the major screw-up? Does the Trust document really say that unitholders receive 80% of profit and expenses -- even if the expenses were because of negligence?


    Completing the circle: didn't Exxon / the Trust have an obligation to more strongly point out the risks of this unusual event? Or of the moment when they changed their opinion of the litigation from "we have strong defenses."


    Shouldn't BofA said, "Settling might be good for XTO/Exxon, but you have obligations to us and the unitholders."


    There also was weakness in HGT (more than the group) in the days leading up to this.
    23 May 2012, 09:55 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs