Chesapeake Granite Wash Trust (NYSE: CHKR), the newest addition to the universe of US oil and gas trusts, went public on Nov. 11, 2011.  The trust is also among the most promising and fastest growing trusts in my coverage universe and is structured in a similar fashion to Wildcatters Portfolio holding Sandridge Mississippian Trust I.

The trust’s sponsor is US independent oil and gas producer Chesapeake Energy Corp (NYSE: CHK). To form the trust, Chesapeake contributed royalty interests in existing and planned wells in the Colony Granite Wash play located in Washita County, Okla. The area of mutual interest (AMI) contributed to the trust spans 45,400 gross acres and is in the heart of a broader oil and gas-producing region known as the Anadarko Basin.

Chesapeake Granite Wash Trust has yet to pay a distribution, so most brokerage and financial websites will still list the yield as zero; savvy investors have an opportunity to pick up units before the public catches on to the trust’s distribution potential.

If in its first four quarters as a public company Chesapeake Granite Wash pays its targeted distribution of $2.72 per unit, that’s equivalent to 14.1 percent yield at current prices. And if the trust generates cash flow that exceeds the incentive threshold, the yield jumps all the way to 17 percent. With a high-quality asset base and the promise of a sky-high yield, Chesapeake Granite Wash Trust rates a buy up to 22 and is the latest addition to the Wildcatters Portfolio.

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