Thursday, March 22, 2007

TELOZ - Income Bond

TELOZ is a Trust that derives all of it's revenues from CVX, thus the importance of the financial stability of CVX. CVX has a strong balance sheet and solid cashflow. There are reserve issues, but there are always reserve issues with oil stocks. Having said that, they do not seem threatening to the company's solvency.

Think of TELOZ as an Income Bond. TELOZ trades as a common stock, and has a payout ratio of 100%. Currently selling for $10 and with a payout ratio that yields 24%

If you feel that oil will trade in a range of $30-$40, you will accrue a 24% yield as long as you hold the stock. If oil rises, the dividend and yield will rise with the added bonus of possible capital appreciation in the stock.

1 Comments:

Blogger William said...

A friend sent me this and asked if I knew anything about TEl Offshore Trust. I looked around and wrote back>>>>>

TEL Offshore Trust owns 99.99% interest in the TEL Offshore Trust Partnership (partnership). The partnership owns an overriding royalty interest that is equivalent to a 25% net profits interest in certain oil and gas properties located offshore Louisiana. Its properties include Eugene Island 339, Ship Shoal 182/183, West Cameron 643, and East Cameron 371/381. As of December 31, 2005, the partnership´┐Żs properties generated 650,466 barrels of crude oil and condensate, and 2,287,314 Mcfe of natural gas and gas products. As of October 31, 2005, its properties covered 98,122 gross acres. As of the same date, the partnership operated 117 oil and 91 gas wells. The Trust was founded in 1983 and is based in Austin, Texas.

I do have one thought:

A bad hurricane in the gulf could evaporate the value of this investment.

And we know that sea temperatures are rising and thus threatening bigger storms.

1:43 PM  

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