Dominion Resources Black Warrior Trust Grossly Overvalued - 75% Downside, 90% Of Wells May Be Losing Money
- DOM’s production levels are declining and the trust is likely to close in 4-5 years.
- Wells are being shut and a vast majority of wells may be losing money.
- DOM’s own 2014 reserve report suggests a fair value of $2.64; 75% lower than Monday’s opening price.
- Separate analysis of production and pricing suggests that, even under highly optimistic assumptions, DOM is 36% overpriced.
- Put options appear very attractively priced.