Hi energyplay, <<being just wee bit conservative>> ... yes.
<<Appears the reserves haven't run out yet.... >>
My model is, as DJ puts it, based on cutting of the beast's head and watch it bleed to death, without further fund raising, without any acquisitions, and without possibilities of extensions, discoveries or other reserve enhancing zigs and zags.
In the model, the beast is run down to the point when its assets are exactly offset by its liabilities, and then terminated.
I am comfortable with the valuation methodology, because the number it generates for the value is in line, perhaps by chance, maybe not, with current market value, and generally accepted bond interest rate; meaning these royalty trusts are not at the tail end of the risk/return distribution curve.
Having noted all of the above economics, I now intend to enjoy watching the beast twist and turn, zig and zag, cower and charge in the financial world, and do accordingly, on gut feel.
Oops, just looked at the CA:AVN.UN chart you reference ... I understand that the big dip 18 months ago was driven by the decline of gas price ...
(a) was the decline noted early enough, meaning were the signs clear enough that folks were able to get out (ala Nasdaq) if they were nimble (silly question, but I have to ask:0)
I note that Canadian natural gas seems to be denominated in CAD terms, unlike oil, which is denominated in USD, or am I mistaken, that the gas in fact is, like gold, denominated in USD terms, or does it all sort of fluctuate, pushed and pulled by Canadian supply and US demand, with forex rate sometimes offsetting USD-denominated pricing effect and sometimes augmenting the plus and minus? I may not have asked this question clearly:0?
I have not devoted any time to reflecting on SJT as yet, but do I understand correctly that they did not replenish their reserves via acquistion at all?
Chugs, Jay |
