Shopping For Energy Trusts

September 26, 2007
By seadmin

Subscribers to my High Monthly Income advisory service know that I have been bullish on Canadian royalty trusts for some time now. In fact, my subscribers have just been instructed to take two new positions in these dividend — paying, tax — advantaged energy securities.

Well, it seems that I am not the only one who has taken a liking to the sector.

On Tuesday, the Abu Dhabi National Energy Co., a state — owned company based in the United Arab Emirates, agreed to purchase the PrimeWest Energy Trust (PWI) for 2.4 billion Canadian dollars (US$2.4 billion), plus the assumption of debt.

The deal by the Middle Eastern company, known as TAQA, is its third in Canada and triples its investment in the Canadian energy sector to $7.5 billion. TAQA has a stated goal of investing $20 billion in Canada by 2012.

According to the Wall Street Journal, TAQA’s investment strategy, which counters the decades — long trend of Western capital flowing to the oil — rich, Middle East, acknowledges the difficulty in finding stable sources of oil and natural gas, while also bringing them to market. Canada offers political stability and proximity to the United States, plus vast oil and gas reserves.

Bingo!

Hey, when companies in oil — rich Middle East nations go shopping for energy trusts, you better believe it’s time for you to check out these dividend — paying stalwarts.

I think this Canadian oil grab from foreign entities is just the beginning of more buyouts and more consolidation in the CanRoy space. And, judging by the extreme price appreciation that shareholders of PWI enjoyed yesterday (see chart), I think you can see why I find these trusts so appealing.

To find out more about positioning your assets in Canadian energy trusts, or to see if my High Monthly Income advisory service is right for you, click here.

This week I am going to take you off the usual Alert path by presenting you an article by one of my favorite writers, freelance financial journalist Jim Woods. In his piece, Jim pays tribute to one of his own personal heroes. More importantly, he reminds us what the real significance of heroes is, and what they should mean to us all.

Log In

Forgot Password

Search