Dominion Resources Black Warrior Trust (NYSE:DOM)

CAPS Rating: 1 out of 5

The Trust is a grantor trust formed to acquire and hold certain overriding royalty interests burdening proved natural gas properties located in the Pottsville coal formation of the Black Warrior Basin, Tuscaloosa County, Alabama owned by the Company.

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Member Avatar pchop12316 (79.74) Submitted: 7/30/2015 11:06:13 AM : Underperform Start Price: $1.32 DOM Score: -11.11

only pessimism

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Member Avatar jed71 (98.78) Submitted: 7/29/2015 1:30:26 PM : Underperform Start Price: $1.47 DOM Score: +0.09

Oopsies!! This most certainly looks like it’s going to $0. Not a guarantee, but the situation looks quite dire. Most importantly, here is the recent news item of note:

“Dominion Resources receives letter from bankrupt Walter Energy regarding a pre-negotiated restructuring plan; Walter advised DOM that it is not permitted to pay obligations that arose prior to July 15, 2015, including royalty payments (shares halted)”

This does not mean they will never pay dividends to the trust units again, but I would personally be very careful here. The trust's producing properties, now owned by Walter Energy, are caught up in bankruptcy proceedings.

“On May 28, 2010, Walter Natural Gas, LLC, a wholly owned subsidiary of Walter Energy, LLC, acquired the Alabama natural gas interests of HighMount, effective March 1, 2010. The acquisition included the Company’s Alabama coal bed methane operations, including the 532 existing conventional gas wells in which the Trust has a net profit interest. The transaction was structured as an acquisition of the membership interests in HighMount Alabama, following which, HighMount Alabama’s name was changed to “Walter Exploration &Production LLC.” Walter Exploration &Production will continue to be party to the Administrative Services Agreement and Trust Agreement. Walter Exploration &Production will continue to own all the interests in the Company, and the Company, which has changed its name to “Walter Black Warrior Basin LLC,” will continue to own the Underlying Properties. The Trust continues to have ownership in the Royalty Interests burdening the Underlying Properties and such sale did not affect that ownership.”

I also found this which seemed quite ominous:

“In March 2012, the Company notified the Trustee that it is undertaking a study of the Underlying Properties on a well-by-well basis to determine the economic viability of continuing to produce each individual well. The Company informed the Trustee that it abandoned 11wells in 2012, 11wells in 2013 and 8wells in 2014 as the Company considered them uneconomic and will continue to evaluate an additional 10 to 20wells in 2015. If the Company decides to suspend production or abandon any additional wells, such decision could adversely affect the Trust’s future revenue stream, and if a significant number of wells are abandoned, it could cause a termination of the Trust. See “Item1 — Business — Description of the Trust — Termination and Liquidation of the Trust” and “Item1A — Risk Factors” in the Trust’s Annual Report on Form10-K for the year ended December 31, 2014 filed with the SEC on March 23, 2015, which is accessible on the SEC’s website at www.sec.gov, for additional information.”

This one seems like a very simple one where an investor can do a little reading, and (hopefully) make the wise choice to AVOID losing money on a bet such as this.

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Member Avatar chris293 (73.52) Submitted: 7/14/2013 4:26:18 AM : Outperform Start Price: $3.75 DOM Score: -86.05


Gas, gas, and more gas!

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Member Avatar badducky (54.71) Submitted: 11/15/2012 9:51:21 AM : Outperform Start Price: $2.24 DOM Score: -89.17

A very attractive entry price for a resource that's about to boom in a very miner-friendly area. The dividend makes it attractive, as well, for someone looking to take a small chance in (for me) a new area of business (mining).

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Member Avatar deepthoughtless (41.90) Submitted: 3/22/2011 2:55:02 PM : Outperform Start Price: $8.95 DOM Score: -146.31

Natural gas is the next best thing, and demand/prices are going to rise.

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Member Avatar v65magna (< 20) Submitted: 12/18/2009 9:09:09 AM : Outperform Start Price: $9.65 DOM Score: -174.03

Good small market natural gas play, with great dividends.

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Member Avatar DaretothREdux (34.55) Submitted: 7/20/2009 7:54:04 PM : Outperform Start Price: $9.20 DOM Score: -204.58

Low P/E, zero debt and a nice dividend to boot!

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Member Avatar Mobil40e (93.73) Submitted: 5/23/2008 8:34:14 AM : Outperform Start Price: $12.83 DOM Score: -145.60

"You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it."

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Member Avatar chapp1 (82.33) Submitted: 6/16/2007 11:31:58 AM : Outperform Start Price: $11.25 DOM Score: -144.03

Average earnings for the past ten years has been $2.99.
Calculated Intrinsic Value at $30 per share with a range
of $24.50 to $38.00. Pays a 10% dividend (return of capital)
based upon Intrinsic Value estimate. Should close operations
in the next seven years.

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Member Avatar aage44 (< 20) Submitted: 5/21/2007 7:52:51 PM : Outperform Start Price: $12.17 DOM Score: -133.63

Outstanding dividends and serious tax benefits.

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Member Avatar azwapiti (< 20) Submitted: 1/11/2007 3:25:27 PM : Outperform Start Price: $10.01 DOM Score: -141.67

IMO the next few months are last chance at $48 to 53 oil and cheap NG stocks.

I think $64-70 oil is the new norm and higher NG as well. in the not distant future

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Member Avatar fadiah (< 20) Submitted: 12/14/2006 3:55:31 AM : Outperform Start Price: $12.57 DOM Score: -145.76

high dividend yield will be the main reason to take this stock price up in the next year, besides oil and gas prices might still in high ranges nect year

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Member Avatar jameshouston (< 20) Submitted: 11/13/2006 6:10:39 AM : Outperform Start Price: $12.98 DOM Score: -150.33

It was hit hard (52 YR low-high - 28 - 50)and has a hugh dividend. If we have a warm winter (HA!), it maydecline before it gets HOT!!

Results 1 - 13 of 13

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