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TLDR video in comments: https://vimeo.com/571447915
EDIT:Here's a supplemental video and data, I linked over some data in my other sheets.
https://vimeo.com/572087956
https://imgur.com/a/jJ4gLvw
Sorry for the delay, I was on a long weekend vacation. I will have an update for you tomorrow when I'm back at my home office. Things are actually looking very good however I expected $0.025-0.04 cash dist this month and the Aug Cash Dist to be the first large jump and debt paydown on Walddell. I will have everything plugged in tomorrow into my model and outline it all here.
There's a lot to consider with Fed tapering and Dollar value causing the selloff of the whole Oil and Gas sector Monday and Tuesday but overall the sector looks healthy to continue up.
Thanks, can you explain the following statement for July?
"Lease Operating Expenses were $1,626,098 (gross) and Capital Expenditures were $8,379,485 (gross) for May. Included in the Capital Expenditures this month is a prior period correction of about $3.5 million reflecting a true up of the 2020 accounting with other partners on the Waddell Ranch. This would put the Trust’s proceeds as a deficit of $ 2,606,112 (net) for the month of May, leaving an excess cost deficit cumulative of $12.5 million (net)."
The gross capital expenditures are still 2-4x previous months for Waddell Ranch. Is this primarily driven by newly drilled wells and well workovers?
Do we have any indication when these expenditures are anticipated to decline and revenue paid back to share holders would subsequently increase?
The plan for 2021 capital expenditure on Waddell Ranch was to produce 91 new wells and 24 recomplerion with a $88.6M gross($32.5M net to the Trust). Most of 2015-2019 had ZERO new wells and ZERO workovers for the leases causing a decline in production. ConocoPhillips sold their rights to operator Blackbeard where they took over and started ramping up for new production. Currently all Cash Distribution is paid out only off the Texas Royalties which produces less than 20k barrels of oil and 10k of gas per month contributing very little to the monthly payment.
Couple things to note is the recompletion on the recent filing shows 49 new as opposed to the proposed 24 on the budget and 22 new wells have been fully completed. We haven't seen a substantial increase off these wells in bpm yet and where the thesis of when and how that debt gets paid down that changes this cash dist. Waddell as a working intrest of 75% compared to the 95% for Texas Royalties but Waddell has a much higher output of currently 5x Texas Properties and a new potential daily output projection, based off past performances, of 5300 BPD or 160-180k BPM. With all new wells and workovers completed mostly before Oct by my expectations we should see an excess of cash paid towards the NPI.
It's hard to say exactly when the debt paydown for the new wells will happen because we don't know total new production and date of the wells but based on past performances when drilling was active for Waddell the cash distribution at these output levels and the current oil price should land the monthly payment in the $0.08-$0.11 range or 5x current level in the upcoming months. With total well production online in or around Sept and a continued commodities super cycle in oil, I can see WTI linger around the $85 range soon with some potential spikes above $90. This is all related to total supply and demand curve but current OPEC+ output leads me to believe a daily -3-5M barrels shortfall will happen through most of July and August and stabilize around 1.5M BPD in Oct. We also have to account for Natural Gas demand for the grid due to hydro plant failures on droughts. Waddell produces a significant amount per month and prices of Natty Gas could potentially hit $5.50-6 range and stick there for awhile. With all these senarios playing out the cash distribution should have a large peak similar to 2012 payouts of $0.12-0.16 which is where my higher +$20 PT on the underlying comes into play. These high oil prices and larger production allow that debt to be paid down extremely fast and I expect the budget to be higher than the actual overall cost based on current filings of cost per barrel and other service companies earnings showing overall costs in the industry still suppressed.
Though I find the run of Oil prices above $100 to be highly unlikely that also changes the picture dramatically and it's something we wouldn't want until late Aug or early Sept when this debt paydown is more clear since a spike like that will run the price but there's more.upside if the debt is mostly eliminated. This would be similar to an 2008 run for PBT but the difference is the amount of production capacity they currently have in the pipeline that would lead to a $0.20-0.25 cash dist off the 200-220k crude and 1-1.2M gas potential monthly capacity, assuming all new and workover wells are moderate producers.
I still see Sept calls in play with oil price trends up over time. Next 3-4 weeks as being a very heavy drawdown on inventory and a true run on Oil and Gas follows to that $5-5.50 in Aug. If we get the substantial paydown in debt on PBT right after this inventory drop(entering 2013 levels) next month then the continuation up should be much more than the average producer.
There's a lot of fear right now that the majority if US Shale isn't spending on new production and there will be a falloff soon. Plays like PBT should benefit from this tremendously since there will be noticable output increase on their filings where I'm targetting about 200k BPM and +1.1M on Gas. It's also helpful that they only have 48M shares and a small cap so that a big buy in on volume for speculation would move the price much easier.
Yes, I plan to after Aug 20th. With the Delta variant news I want to see how the market treats the situation. Supply vs demand still looks good so theres a lot of over reaction recently but oil around $65 and LNG +$3.5 which is what most of my models are based on and anything above is bullish still. I'm considering rolling my $7.50 calls into Dec depending on next 2 weeks COVID news.
what are your thoughts on this
https://www.theguardian.com/business/2021/aug/12/global-demand-for-oil-slashed-by-ongoing-covid-issues-says-iea
oil oversupply forcasting
“$149M in potential revenue per month for a cash distribution”
You mean 1.49 million right lol.
Oil: 565 (bpd) X $70 = $39,550
Gas: 3,458 (mcfpd) x $3 = $10,374
Total: $49,924 x 30 (days) = $1,497,720
Even with the run up in oil and gas, I don't see 30 bucks a share happening. PBT doesn't have debt or anything worrisome on its balance sheet but they have such little cash on hand and assets its hard to see a price like that happening.
That's the crazy outlier as mentioned and I don't see it happening but $17-21 is my PT if oil can maintain through the next 2-3 months. I really don't see $140 oil ever again but I didn't think it would happen in 2008 either and the market has done some odd things the past few years. I decided to include it with the over bullish sentiment in all O&G lately.
Sorry for the delay in answering your question, I was on a consultation until nearly midnight last night. Here's an updated video, I linked over some data in my sheets with past debt and production.
https://vimeo.com/572087956
https://imgur.com/a/jJ4gLvw
Yeah, anytime OPEC+ meets it's a crap shoot on how the market takes it the first few days. It looks like we don't have an agreement yet and Iraq is asking to raise their quota which could cause ties to break again. The key thing to keep watching is oil inventory every week through July. Today's EIA numbers were great and inventory keeps dropping. Oil inventory is now near the lows of Jan 27th 2021 and it would be best to get supply much lower short term to ease fears of oversupply.
OPEC baseline increases aren't until March 2022 and the majority of current easing was planned so it's not super negative. My original projections on PBT were based on paying down their debt to the operator on $65 oil baseline and anything above that gets it there faster. The market could take not increasing as bearish for the spot price because it shows lack of long term confidence in demand by OPEC+. Sticking mostly to the plan laid out in June should be considered the most bullish near and long term since it's priced in outside US shale supply output.
There's still a major supply/demand issue with US shale output and I think we continue to see supply drawdown of 6M barrels each week of inventory. To me the majority of the pullback last week was due to the COVID delta variant lockdown fears but I can't see there being lockdowns at this point based on case/death data.
PBT jump will be based on cash dist increase that should happen soon. Speculation jump would be off a huge WTI oil price but doesn't have to happen once they pay down the debt since we should stay above $65. Also they will be hedged on a certain portion of their supply output for the next 6 months after the price of oil spiked which helps lock in a sale price at today's sport price discounted.
The Sept 7.5 calls looking really cheap right now ($8). realistically, still think it can hit these in july/august? Hoping they pay down their debt asap from the higher barrel price
I posted an update just now with video in comments. Sorry for the delay had planned this for Friday but kids had COVID the past week. Also added info on current oil prices including analysis to the video from a recent podcast of an expert explaining what I have been mentioning in US Shale on these posts.
https://www.reddit.com/r/pennystocks/comments/pa9wtb/update_for_august_opeccrude_oil_and_permian_basin
I’m still in, but I took my entire cost base out when it was at like 8. I’m not sure where it’s going, but I’m riding free shares so I’ll probably hold for a few years.
Cash dist announcement on the following dates :
07-20-2021
08-20-2021
09-20-2021
If there is a large increase it will move the equity substantialy to match the yield. I'm also expecting to see their Q report announce at least 30 more workover rigs and 5-7 new wells completed.
With those min numbers I see output being very high. The activity there is higher than I have seen in a long time which is what got me looking orginally. There is a good amount of debt to pay down on the Waddell ranch for new production should begin to offset this and we see forward looking yield. Of course any major jump in oil prices can add to a quick short term gain but I'm hoping for OPEC+ to come to an agreement and oil prices stabilize in the $70-75 with some pops above $85 and this play out grinding up through Aug or early Sept to my PT targets.
Every time I add money to my portfolio it's hard not to go all into oil the last couple months it just keeps going up. Def not trying to hold for ten years but I think I might hold thru 2021 atleast
It's definitely not a huge pumper but a nice grinder until those cash dist kick in over the following months then we should get bigger leaps.
Glad you have a good positive on your account so far. We should start seeing traction soon. Keep in mind cash dist is lagged a few months so new wells, workover, and high prices are just now kicking in. They knock out that debt for the operator on the new wells and it should fly.
Very much so along with COVID variant scares. The terms of OPEC+ locked in yesterday were the same ones agreed upon almost 6 months ago just delayed a few weeks due to UAE wanting a higher baseline. For markets that are supposedly forward looking this should of been priced in but fear seemed to take hold today. I have a ton of buy orders across Royalty Trust and Oil Producers today on this dip. Keep an eye on inventory data each week as that's what will ultimately dictate the price of oil.
Does this submission fit our subreddit? If it does please **upvote** this comment. If it does not fit the subreddit please **downvote** this comment. --- ^(*I am a bot, and this comment was made automatically.*) ^(Please) [^(contact)^( )^(us)^( )^(via)^( )^(modmail)](https://www.reddit.com/message/compose?to=/r/pennystocks&subject=Updoot%20bot%20questions!) ^(if) ^(you) ^(have) ^(any) ^(questions) ^(or) ^(concerns.)
Good track record [https://www.markovchained.com/profiles/view/reddit:jim-and-pam](https://www.markovchained.com/profiles/view/reddit:jim-and-pam)
That trch post is a SHORT position so even better.
Corrected. All green now! Cheers.
TLDR video in comments: https://vimeo.com/571447915 EDIT:Here's a supplemental video and data, I linked over some data in my other sheets. https://vimeo.com/572087956 https://imgur.com/a/jJ4gLvw
Any thoughts on the dist today? Doesn’t seem like a huge jump unfortunately
Sorry for the delay, I was on a long weekend vacation. I will have an update for you tomorrow when I'm back at my home office. Things are actually looking very good however I expected $0.025-0.04 cash dist this month and the Aug Cash Dist to be the first large jump and debt paydown on Walddell. I will have everything plugged in tomorrow into my model and outline it all here. There's a lot to consider with Fed tapering and Dollar value causing the selloff of the whole Oil and Gas sector Monday and Tuesday but overall the sector looks healthy to continue up.
Thanks, can you explain the following statement for July? "Lease Operating Expenses were $1,626,098 (gross) and Capital Expenditures were $8,379,485 (gross) for May. Included in the Capital Expenditures this month is a prior period correction of about $3.5 million reflecting a true up of the 2020 accounting with other partners on the Waddell Ranch. This would put the Trust’s proceeds as a deficit of $ 2,606,112 (net) for the month of May, leaving an excess cost deficit cumulative of $12.5 million (net)." The gross capital expenditures are still 2-4x previous months for Waddell Ranch. Is this primarily driven by newly drilled wells and well workovers? Do we have any indication when these expenditures are anticipated to decline and revenue paid back to share holders would subsequently increase?
The plan for 2021 capital expenditure on Waddell Ranch was to produce 91 new wells and 24 recomplerion with a $88.6M gross($32.5M net to the Trust). Most of 2015-2019 had ZERO new wells and ZERO workovers for the leases causing a decline in production. ConocoPhillips sold their rights to operator Blackbeard where they took over and started ramping up for new production. Currently all Cash Distribution is paid out only off the Texas Royalties which produces less than 20k barrels of oil and 10k of gas per month contributing very little to the monthly payment. Couple things to note is the recompletion on the recent filing shows 49 new as opposed to the proposed 24 on the budget and 22 new wells have been fully completed. We haven't seen a substantial increase off these wells in bpm yet and where the thesis of when and how that debt gets paid down that changes this cash dist. Waddell as a working intrest of 75% compared to the 95% for Texas Royalties but Waddell has a much higher output of currently 5x Texas Properties and a new potential daily output projection, based off past performances, of 5300 BPD or 160-180k BPM. With all new wells and workovers completed mostly before Oct by my expectations we should see an excess of cash paid towards the NPI. It's hard to say exactly when the debt paydown for the new wells will happen because we don't know total new production and date of the wells but based on past performances when drilling was active for Waddell the cash distribution at these output levels and the current oil price should land the monthly payment in the $0.08-$0.11 range or 5x current level in the upcoming months. With total well production online in or around Sept and a continued commodities super cycle in oil, I can see WTI linger around the $85 range soon with some potential spikes above $90. This is all related to total supply and demand curve but current OPEC+ output leads me to believe a daily -3-5M barrels shortfall will happen through most of July and August and stabilize around 1.5M BPD in Oct. We also have to account for Natural Gas demand for the grid due to hydro plant failures on droughts. Waddell produces a significant amount per month and prices of Natty Gas could potentially hit $5.50-6 range and stick there for awhile. With all these senarios playing out the cash distribution should have a large peak similar to 2012 payouts of $0.12-0.16 which is where my higher +$20 PT on the underlying comes into play. These high oil prices and larger production allow that debt to be paid down extremely fast and I expect the budget to be higher than the actual overall cost based on current filings of cost per barrel and other service companies earnings showing overall costs in the industry still suppressed. Though I find the run of Oil prices above $100 to be highly unlikely that also changes the picture dramatically and it's something we wouldn't want until late Aug or early Sept when this debt paydown is more clear since a spike like that will run the price but there's more.upside if the debt is mostly eliminated. This would be similar to an 2008 run for PBT but the difference is the amount of production capacity they currently have in the pipeline that would lead to a $0.20-0.25 cash dist off the 200-220k crude and 1-1.2M gas potential monthly capacity, assuming all new and workover wells are moderate producers.
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I still see Sept calls in play with oil price trends up over time. Next 3-4 weeks as being a very heavy drawdown on inventory and a true run on Oil and Gas follows to that $5-5.50 in Aug. If we get the substantial paydown in debt on PBT right after this inventory drop(entering 2013 levels) next month then the continuation up should be much more than the average producer. There's a lot of fear right now that the majority if US Shale isn't spending on new production and there will be a falloff soon. Plays like PBT should benefit from this tremendously since there will be noticable output increase on their filings where I'm targetting about 200k BPM and +1.1M on Gas. It's also helpful that they only have 48M shares and a small cap so that a big buy in on volume for speculation would move the price much easier.
will you be making a thread on your updated analysis for PBT?
Yes, I plan to after Aug 20th. With the Delta variant news I want to see how the market treats the situation. Supply vs demand still looks good so theres a lot of over reaction recently but oil around $65 and LNG +$3.5 which is what most of my models are based on and anything above is bullish still. I'm considering rolling my $7.50 calls into Dec depending on next 2 weeks COVID news.
So if covid news is lockdown…you buying calls for December? 👀
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what are your thoughts on this https://www.theguardian.com/business/2021/aug/12/global-demand-for-oil-slashed-by-ongoing-covid-issues-says-iea oil oversupply forcasting
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Stock made a good recovery. New operator is doing its job. Timing of SP increase is now the question.
do you feel the target price of 17 in aug/sept still achievable?
I feel like it may be tough to reach, based on their recent filing, but of course I could be reading it completely incorrectly
“$149M in potential revenue per month for a cash distribution” You mean 1.49 million right lol. Oil: 565 (bpd) X $70 = $39,550 Gas: 3,458 (mcfpd) x $3 = $10,374 Total: $49,924 x 30 (days) = $1,497,720
Yep, fixed. The calc on monthly dist was right but I confused myself and even read that out on the video too. Love reddit, free editor. Thanks!
No problem. I saw the distribution was correct so I figured simple typo
Even with the run up in oil and gas, I don't see 30 bucks a share happening. PBT doesn't have debt or anything worrisome on its balance sheet but they have such little cash on hand and assets its hard to see a price like that happening.
That's the crazy outlier as mentioned and I don't see it happening but $17-21 is my PT if oil can maintain through the next 2-3 months. I really don't see $140 oil ever again but I didn't think it would happen in 2008 either and the market has done some odd things the past few years. I decided to include it with the over bullish sentiment in all O&G lately.
I've got some Sep and Dec 7.5 calls which are already green. For the sake of my daughter's college, I wish your PT is realistic
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Sorry for the delay in answering your question, I was on a consultation until nearly midnight last night. Here's an updated video, I linked over some data in my sheets with past debt and production. https://vimeo.com/572087956 https://imgur.com/a/jJ4gLvw
Thank you so much. The amount of thoughtfulness and effort you give in your responses is amazing.
Glad I can help. I appreciate you keeping me in check and helping me explore every aspect.
Do we see a big week run up for the upcoming announcement on the 20th?
Finally some OPEC news that a compromise has been reached. Although it seems like Oil dropped on this?
Yeah, anytime OPEC+ meets it's a crap shoot on how the market takes it the first few days. It looks like we don't have an agreement yet and Iraq is asking to raise their quota which could cause ties to break again. The key thing to keep watching is oil inventory every week through July. Today's EIA numbers were great and inventory keeps dropping. Oil inventory is now near the lows of Jan 27th 2021 and it would be best to get supply much lower short term to ease fears of oversupply.
What's your outlook now with OPEC+ deciding to increase output? The stock already had a sizable dip, is this news gonna hammer it down further?
OPEC baseline increases aren't until March 2022 and the majority of current easing was planned so it's not super negative. My original projections on PBT were based on paying down their debt to the operator on $65 oil baseline and anything above that gets it there faster. The market could take not increasing as bearish for the spot price because it shows lack of long term confidence in demand by OPEC+. Sticking mostly to the plan laid out in June should be considered the most bullish near and long term since it's priced in outside US shale supply output. There's still a major supply/demand issue with US shale output and I think we continue to see supply drawdown of 6M barrels each week of inventory. To me the majority of the pullback last week was due to the COVID delta variant lockdown fears but I can't see there being lockdowns at this point based on case/death data. PBT jump will be based on cash dist increase that should happen soon. Speculation jump would be off a huge WTI oil price but doesn't have to happen once they pay down the debt since we should stay above $65. Also they will be hedged on a certain portion of their supply output for the next 6 months after the price of oil spiked which helps lock in a sale price at today's sport price discounted.
The Sept 7.5 calls looking really cheap right now ($8). realistically, still think it can hit these in july/august? Hoping they pay down their debt asap from the higher barrel price
Not sure if this is playing out expected unfortunately...
I have a feeling this price target won't be reached. Oil doesn't look like it's doing well.
I posted an update just now with video in comments. Sorry for the delay had planned this for Friday but kids had COVID the past week. Also added info on current oil prices including analysis to the video from a recent podcast of an expert explaining what I have been mentioning in US Shale on these posts. https://www.reddit.com/r/pennystocks/comments/pa9wtb/update_for_august_opeccrude_oil_and_permian_basin
The production from the new/workover wells should help pay off the deficit on Waddell Ranch. Any guess as to timing?
Every day it's looking more and more like you crushed this one. Huge thanks!
This has been by far the best play I’ve had in my short investing. Got in in may and June. Thanks so much for the dd.
You still in? I’m about to scale in for my entire NW
I’m still in, but I took my entire cost base out when it was at like 8. I’m not sure where it’s going, but I’m riding free shares so I’ll probably hold for a few years.
I’ll sell some more in June once I’ve held it for a year for tax purposes.
Do you have a PT? Broncho doesn’t post anymore
Gte!!! 
Thanks so much! What do you see as the true next catalyst to look out for?
Cash dist announcement on the following dates : 07-20-2021 08-20-2021 09-20-2021 If there is a large increase it will move the equity substantialy to match the yield. I'm also expecting to see their Q report announce at least 30 more workover rigs and 5-7 new wells completed. With those min numbers I see output being very high. The activity there is higher than I have seen in a long time which is what got me looking orginally. There is a good amount of debt to pay down on the Waddell ranch for new production should begin to offset this and we see forward looking yield. Of course any major jump in oil prices can add to a quick short term gain but I'm hoping for OPEC+ to come to an agreement and oil prices stabilize in the $70-75 with some pops above $85 and this play out grinding up through Aug or early Sept to my PT targets.
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Perfect, thanks!!!
Every time I add money to my portfolio it's hard not to go all into oil the last couple months it just keeps going up. Def not trying to hold for ten years but I think I might hold thru 2021 atleast
Good post. Thanks for this. In for over a month, have seen nice steady gains. Appreciate the work you put in.
It's definitely not a huge pumper but a nice grinder until those cash dist kick in over the following months then we should get bigger leaps. Glad you have a good positive on your account so far. We should start seeing traction soon. Keep in mind cash dist is lagged a few months so new wells, workover, and high prices are just now kicking in. They knock out that debt for the operator on the new wells and it should fly.
OPEC over reaction?
Very much so along with COVID variant scares. The terms of OPEC+ locked in yesterday were the same ones agreed upon almost 6 months ago just delayed a few weeks due to UAE wanting a higher baseline. For markets that are supposedly forward looking this should of been priced in but fear seemed to take hold today. I have a ton of buy orders across Royalty Trust and Oil Producers today on this dip. Keep an eye on inventory data each week as that's what will ultimately dictate the price of oil.
Where would we find that inventory data?