“I don't know whether you still hold Hugoton Royalty Trust shares, but if you do, would you be able to shed any light on whether the recent sell off has overcompensated for the risk that the Trust will have to bear further damages in relation to the litigation cases currently outstanding?”

Eoin Treacy's view Thank you for this question which others may also find of interest. I have used Hugoton Royalty Trust as a vehicle to trade natural gas in the past but I have never had an investment position in the share.

Hugoton Royalty Trust played down the potential impact of the Fankhouser class action suit in one of its quarterly reports last year. This proved far too optimistic since it now owes $29.6 as a result of the settlement XTO agreed. Prices have accelerated lower. The 9.22% yield is unlikely to prove attractive to investors until they know more about the effect on future cash flows from the fact that liabilities are likely to exceed revenues from Hugoton's Oklahoma and Kansas properties for the next 18 months.