PENGROWTH ENERGY TRUST $24.80 (Toronto symbol PGF.B; SI Rating: Average) produces oil and gas in western Canada. The company was one of the first Canadian royalty trusts, starting up in 1988. It’s now one of the largest energy trusts in North America. Pengrowth also holds an 8.4% interest in the Sable Offshore Energy Project. This project consists of six gas …read more »
ARC ENERGY TRUST $28.25 (Toronto symbol AET.UN; SI Rating: Speculative) produces oil and gas in western Canada. Like most oil and gas trusts, ARC holds mature, low-risk properties, with a focus on short-term cash flow for payout.
In the three months ended March 31, 2006, ARC’s revenue rose 34%, to $318.9 million from $238.1 million. Cash flow per unit rose 25.3%, …read more »
Oil is currently trading at around $71 U.S. a barrel, not far from the record high of $75.35 it reached in April this year. Despite high inventory levels in the U.S., the world’s largest oil consumer, oil prices remain high. That’s largely due to fears of supply disruptions centered around Iran’s nuclear ambitions, violence in Nigeria, and political pressure on …read more »
FORDING CANADIAN COAL TRUST $39 (Toronto symbol FDG.UN; Aggressive Growth Portfolio, Resources sector; SI Rating: Extra risk) is a leading producer of metallurgical coal, a key ingredient in steelmaking.
It gets 98% of its revenue from its 60% stake in Elk Valley Coal Partnership, which owns six mines along the Alberta-B.C. border. Teck Cominco owns the other 40%. At 2005 production …read more »
PETROFUND ENERGY TRUST $27.94 (Toronto symbol PTF.UN; SI Rating: Speculative) is now the subject of a takeover bid by Penn West Energy Trust $44.30, symbol PWT.UN on Toronto.
Petrofund unitholders will receive 0.6 of a Penn West unit (with a current value of $26.58), as well as 0.12 of a junior exploration company (worth about $0.36) made up of certain assets …read more »
Royalty trusts derive income from royalties associated with the sale of oil, natural gas or minerals. These trusts often promise high yields compared to stocks and bonds, and involve far more risk than most investors realize. This is why Pat McKeough recommends so few of them (but he has managed to find some real gems among the ones he has recommended).
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