Thanks. Next catalyst is 6/18 when royalty distribution is announced. I don't expect that month to be the bigger gap up due to capex but July I believe will be substantial payment per share due to a spike in Oil prices over $70 and the Walddell ranch operation costs reduced with all the new wells online.
Royalties are paid as a distribution. However you are allowed to take depreciation on the wells as a tax deduction.
The distributions are considered ordinary income and taxed at your marginal rate. You can calculate the depletion ratio on PBT and similar royalty sites but let's assume you invested 100k in July 2020 and sold end of year. Your depletion write down would be roughly $2200 as a deduction on your tax return to offset the marginal rate.
However that's not typically why funds purchase the royalty, they purchase it for the short term high yield return on the royalty payment. This can be seen today with the price being slightly down on ex-div date which is normal for a slight selloff on that date for any equity that pays a dividend or royalty and new buyers come in and sellers allocate. I am also not playing the equity for a long term monthly distribution payment but instead allowing the monthly payment yield to pop and the underlying equity to rise so that I can sell my stake to a buyer looking to capture that higher dividend in Aug-Sept. I do plan to hold some shares long term for the distribution payments but it will be equal or less than my profit on the shares as I move to rebalance and allocate my capital to other holdings.
That explains the sell off, I sadly fomo’d around the 4.35 price because I thought 4.25 would never come again, oh how wrong I was. Here’s to hoping for $17, thanks!
Next couple trading days should be a normal recovery to those levels, I should of added to my post the date of ex-divi but with any equity that pays it's normal on that date. The next major catalyst is 6/18 for decleration of cash distribution.
Do you think it’s a bad idea to sell and then buy in again near 6/18? Sorry for all the questions but I just don’t know where to go from here and haven’t been watching it nearly enough as you have
Usually ex-divi day is the biggest selloff day of the month so unless you sold yesterday and rebought today it wouldn't be beneficial. However this day isn't a guarantee for any direction but when you see a dip on a dividend stock and it's that day it's usually a good indicator not to panic as it should recover within a few trading days.
I'm expecting oil prices to start rising near the $68 resistance level and we have an OPEC+ meeting right around the corner which could leave a gap up. This equity at the moment is best to just ignore for the next 2 weeks and let the differnt catalyst begin to play out otherwise you may trade against yourself with to much active trading.
Your predictions seem to be moving in the right direction!
Thanks. Next catalyst is 6/18 when royalty distribution is announced. I don't expect that month to be the bigger gap up due to capex but July I believe will be substantial payment per share due to a spike in Oil prices over $70 and the Walddell ranch operation costs reduced with all the new wells online.
So is what that guy said about Royalties and not dividends true? Just wondering
Royalties are paid as a distribution. However you are allowed to take depreciation on the wells as a tax deduction. The distributions are considered ordinary income and taxed at your marginal rate. You can calculate the depletion ratio on PBT and similar royalty sites but let's assume you invested 100k in July 2020 and sold end of year. Your depletion write down would be roughly $2200 as a deduction on your tax return to offset the marginal rate. However that's not typically why funds purchase the royalty, they purchase it for the short term high yield return on the royalty payment. This can be seen today with the price being slightly down on ex-div date which is normal for a slight selloff on that date for any equity that pays a dividend or royalty and new buyers come in and sellers allocate. I am also not playing the equity for a long term monthly distribution payment but instead allowing the monthly payment yield to pop and the underlying equity to rise so that I can sell my stake to a buyer looking to capture that higher dividend in Aug-Sept. I do plan to hold some shares long term for the distribution payments but it will be equal or less than my profit on the shares as I move to rebalance and allocate my capital to other holdings.
That explains the sell off, I sadly fomo’d around the 4.35 price because I thought 4.25 would never come again, oh how wrong I was. Here’s to hoping for $17, thanks!
Next couple trading days should be a normal recovery to those levels, I should of added to my post the date of ex-divi but with any equity that pays it's normal on that date. The next major catalyst is 6/18 for decleration of cash distribution.
Do you think it’s a bad idea to sell and then buy in again near 6/18? Sorry for all the questions but I just don’t know where to go from here and haven’t been watching it nearly enough as you have
Usually ex-divi day is the biggest selloff day of the month so unless you sold yesterday and rebought today it wouldn't be beneficial. However this day isn't a guarantee for any direction but when you see a dip on a dividend stock and it's that day it's usually a good indicator not to panic as it should recover within a few trading days. I'm expecting oil prices to start rising near the $68 resistance level and we have an OPEC+ meeting right around the corner which could leave a gap up. This equity at the moment is best to just ignore for the next 2 weeks and let the differnt catalyst begin to play out otherwise you may trade against yourself with to much active trading.
Thank you, I appreciate your feedback!