Sabine Royalty Trust has a market cap of $796 million; its shares were traded at around $54.6 with a P/E ratio of 15.9 and P/S ratio of 19.2. The dividend yield of Sabine Royalty Trust stocks is 10.5%. Sabine Royalty Trust had an annual average earning growth of 7.6% over the past 10 years. GuruFocus rated Sabine Royalty Trust the business predictability rank of 2.5-star.SBR is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Item 2. Trustees Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources The Trust makes monthly distributions to the holders of Units of the excess of the preceding months revenues received over expenses incurred. Upon receipt, royalty income is invested in short-term investments until its subsequent distribution. In accordance with the Trust Agreement, the Trusts only long-term assets consist of royalty interests in producing and proved undeveloped oil and gas properties. Although the Trust is permitted to borrow funds if necessary to continue its operations, borrowings are not anticipated in the foreseeable future. Results of Operations Distributable income consists of royalty income plus interest income plus any decrease in cash reserves established by the Trustee less general and administrative expenses of the Trust less any increase in cash reserves established by the Trustee. Distributable income for the three months ended March 31, 2010 was $13,808,204, or $0.95 per unit. Royalty income for the three months ended March 31, 2010 amounted to $14,375,593 while interest income was $287. General and administrative expenses totaled $567,676 for the three months ended March 31, 2010.
Distributions during the period were $.31518, $.28526, and $.18204 per Unit payable to Unit holders of record on January 15, February 16, and March 15, 2010, respectively.
Royalty income for the quarter ended March 31, 2010 increased approximately $3,499,000 or 32% compared with the first quarter of 2009. This increase was caused by increases in the production of both oil and natural gas as well as an increase in the price of oil. These increases were offset somewhat by a decrease in the price of natural gas. Compared to the preceding quarter ended December 31, 2009, royalty income increased approximately $4,638,000, or 48%, due to increases in the production of both oil and natural gas along with increases in the pricing of both natural gas and oil.
Gas revenues received for the three months ended March 31, 2010, related primarily to production for October 2009 through December 2009. The average price of gas as reported by the Henry Hub for the same time period was $4.42 per Mcf. The average price of gas for the Henry Hub was $4.52 per Mcf for January 2010 through March 2010. Oil revenues for the three months ended March 31, 2010 related primarily to production for November 2009 through January 2010. The average price of oil as reported by Nymex for that time period was $77.02 per barrel. The average price of oil as reported by Nymex was $78.82 per barrel for January 2010 through March 2010. As of April 16, 2010, the average price of gas for the Henry Hub was $3.59 per Mcf and the average price of oil reported by Nymex was $85.51 per barrel. It is difficult to accurately estimate future prices of oil and gas, and any assumptions concerning future prices may prove to be incorrect.
Interest income for the quarter ended March 31, 2010 decreased approximately $18,900 compared with the first quarter of 2009. Compared to the preceding quarter ended December 31, 2009, interest income decreased approximately $40. Changes in interest income are the result of changes in interest rates and funds available for investment.
General and administrative expenses for the quarter ended March 31, 2010 decreased by approximately $51,900 compared to the same quarter of 2009 primarily due to decreases in transfer agent fees of approximately $12,400 along decreases in the timing of professional service fees, auditing fees, and printing costs of approximately $10,400, $34,500, and $20,200, respectively. These decreases were offset somewhat by increases in unitholder information services and the timing of accounting support fees for the FASB and PCAOB of approximately $13,100 and $8,800, respectively. Compared to the previous quarter ended December 31, 2009, general and administrative expenses increased approximately $66,200. This increase was primarily due to the timing of annual payments in the first quarter such as expenses related to the printing and mailing of annual tax information, the annual accounting support fees for the FASB and PCAOB and the New York Stock Exchange listing fee of $46,800, $8,800, and $38,000, respectively along with increases in legal services of $6,700. These increases were somewhat offset by decreases in ad valorem rendition service fees, and the timing of auditing fees of approximately $24,000 and $6,500, respectively.
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