An Income Trust with Special Appeal

Article Excerpt

PENGROWTH ENERGY TRUST $26 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) produces oil and natural gas, mainly from mature properties in Western Canada. It also owns 8.4% of a pipeline that transports gas from offshore platforms near Sable Island to Nova Scotia. Pengrowth prefers to replenish its reserves with acquisitions instead of exploration, which adds to its risk. But Pengrowth’s focus on high quality properties offsets this risk. In fact, Pengrowth’s current reserves should last at least 50 years. Thanks to an aggressive acquisition policy and rising energy prices, revenue jumped from $406.4 million in 2001 to $955.3 million in 2005. Earnings fell from $1.24 a unit (total $88.2 million) in 2001 to $0.63 unit ($57.0 million) in 2002, but rose to $2.08 a unit ($326.3 million) in 2005. Cash flow per share fell from $2.93 in 2001 to $2.54 in 2002, but grew to $3.87 in 2005. Distributions per unit fell from $3.49 in 2001 to $1.93 in…

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