The Forensic Accountant
Research analyst, oil & gas, energy

Hugoton Royalty Trust: Distribution To Rise, Only Temporarily

Hugoton Royalty Trust (NYSE:HGT) is an oil and gas trust with wells in Kansas, Oklahoma, and Wyoming. In an article last November, I noted that HGT's distribution was likely to fall (it has). But with recent changes in gas prices, production declines, and a double-dip legal charge, I revisited the model and my earlier assumptions (some were poor). The results suggest that while HGT remains substantially overvalued, its distribution could be in for a roller-coaster ride in 2014, creating both long and short opportunities for those who can tolerate the risk.

Near term distribution rise hides trouble down the road

As those familiar with my articles know, I analyze trusts using a bottom-up, engineering-style model that considers...

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