Pengrowth Merges its Shares

Article Excerpt

PENGROWTH ENERGY TRUST $25.23 (Toronto symbol PGF.UN; SI Rating: Average) has merged its class ‘A’ and ‘B’ units into a single class of units. The new units trade under the symbols ‘PGF.UN’in Toronto, and ‘PGH’in New York. Changes to Canadian regulations made a second class of units unnecessary, and having a single class of units has advantages. In particular, it makes Pengrowth more liquid, so it’s easier for the trust to pay for acquisitions with units. For instance, the trust has just agreed to buy Esprit Energy Trust for roughly $1.1 billion in new units. Pengrowth unitholders will own 82% of the combined trust, while Esprit unitholders will own the remaining 18%. Natural gas accounts for 75% of Esprit’s daily production; the merger will increase Pengrowth’s natural gas weighting from 45% to 52%. Although gas prices have come down in recent months, prices will probably move up over the next several years. Pengrowth Energy Trust is still a buy. buy…

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