TELOZ. Yes, I follow it. If there are hurricane disruptions this year, as we go through the season, as strong as the GOM experienced before, TELOZ may again be forced cancel its royalty payments (in order to pay for repairs), and that will once again tank the stock - severely. (Since the attraction of the stock IS the distribution)
When I read TELOZ's filings, I see that the life expectancy that is mentioned for their properties is only a few years (about three if I recall). Well, that's scary because as you know, this TELOZ is not really a business - as in a viable (i.e. growing) entity - but rather is more like just a guy in an office who receives money from Chevron as Chevron operates/extracts the oil/gas from TELOZ's property. When the the extractions stop, payments stop. So when Chevron says enough and ceases, that guy and the entity 'Tel Offshore' will be history.
Fwiw, rightly or wrongly, I've come to believe though that the life expectancy of the oil/gas will be much longer than what the TELOZ documents say. So I'm more comfortable holding the shares. I do not like or want k-1 partnership filing stuff, so I'm uncomfortable with that aspect. |
