Whiting USA Trust Down 14%, But Moving Off Recent Day Lows on Warning from Galbraith


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Shares of Whiting USA Trust ( WHX ) are down another 14% today after Galbraith Global Investment Management issued a warning today that WHX current unit price does not reflect what Galbraith believes is the inherent value of WHX.

As a holder of a short position in WHX, Galbraith believes that the market has failed to recognize the fact that WHX expects to make only 9 more quarterly distributions, and to terminate in August 2015 with no residual value.

WHX was formed to acquire and hold a term net profits interest ( NPI )in various oil and natural gas properties for the benefit of its unit holders. The NPI entitles WHX to receive 90% of the net proceeds from the sale of a total of 9.11 million barrels of oil or oil equivalent. To date, WHX has distributed proceeds from 6.78 million barrels of oil, leaving 2.33 million barrels of oil available for the Trust to distribute. WHX has no assets besides the NPI in the remaining oil. Once the remaining oil has been produced and sold, WHX will terminate and have no residual value.

Since last Wednesday, the stock has fallen from around $9.40. WHX last traded at $5.94, above a day low $5.66 but at the lower end of its 52-week range of $4.35 to $18.57.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Commodities
More Headlines for: NPI , WHX

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