Hello energyplay, I have done a Royalty Trust Valuation Model achamchen.com (7 worksheets in one file, no warranties, implied or otherwise, for anything that may go wrong; you are on your own if you download this) for each of the following seven possibly magnificent Canadian energy trust, more as an exercise in curiosity, and so, without fear of being shown up to be a naïve newbie energy speculator, I figure the following on the basis of each Trust exploiting its reserve at it steady current rate, with sales price increasing at 1.5% per annum, and cost zooming at 2% per year, with no acquisition, extension, discovery or divestment, until such time its net asset value (total assets less total liabilities) equals zero even if its reserve may still be positive:
Advantage finance.yahoo.com *
At Friday’s price of CAD 15.63, nominally yield 17.64%, AVN will yield negative 26% per annum. AVN’s apparent over-valuation may be due to its 73% gas mix of total production (embedded call option value on gas is high). Reserve index @ 9.2 years.
Enerplus uk.finance.yahoo.com *
At Friday’s price of CAD 30.39, nominally yield 14.77%, ERF will yield 4.42% per annum. ERF has 58% gas mix of total production. Reserve index @ 11.6 years.
NCE Petro uk.finance.yahoo.com *
At Friday’s price of CAD 11.05, nominally yield 19.37%, NCF will yield 4.93% per annum. NCF has 46% gas mix of total production. Reserve index @ 8.9 years.
Pengrowth uk.finance.yahoo.com *
At Friday’s price of CAD 15.18, nominally yield 20.07%, PGF will yield negative 4.25% per annum. PGF has 38% gas mix of total production. Reserve index @ 9.8 years.
Prime West uk.finance.yahoo.com *
At Friday’s price of CAD 26.62, nominally yield 18.08%, PWI will yield negative 4.47% per annum. PWI has 67% gas mix of total production. Reserve index @ 8.1 years.
Provident uk.finance.yahoo.com *
At Friday’s price of CAD 11.26, nominally yield 21.24%, PVE will yield 23.4% per annum. PWI has 51% gas mix of total production. PVE’s apparent under-valuation may be due to its short reserve index. Reserve index @ 5.3 years.
Vermilion uk.finance.yahoo.com *
At Friday’s price of CAD 12.97, nominally yield 15.69%, VET will yield 10.46% per annum. VET has 48% gas mix of total production. Reserve index @ >10 years.
My current allocations in these mysterious beasts are as follows:
achamchen.com
Now that I have a starter stake of these very strange financial derivatives of dirt and carbon molecules, I plan a doubling, and can live with a doubling again of my current aggregate allocation, but I will diversify by timing, as I will watch, reflect, and perhaps hurriedly buy in a panic, over an elapsed time of maybe a few months.
I will probably refrain from buying any more of Provident unless and until they get their reserve life index up into the 8-10s.
I will likely rid myself of HGT and SJT of the US and use the fuel to buy more VET, as I am happy with the capital gains and dividends unrealized and earned since December 30th, 2002 when I bought them:
Message 18381801
December 30th, 2002
Hello Pezz, Last Trade Report of 2002:
I just bought new positions:
(a) Primewest Energy (PWI) @ 16.15
(b) NCE Petrofund (NCN) @ 7.01-7.02
(c) Hugoton Royalty (HGT) @ 12.74
... and added to existing positions:
(d) San Juan Trust (SJT) @ 13.71
(e) Enerplus (ERF) @ 17.67
I do not know anything about these companies, other than:
(a) they are resources
(b) pay dividends
(c) energyplay likes them
(d) I must start to move more out of USD cash/treasuries, but not into Euro/Yen/AUD/CAD because I have enough for now
(e) I must hold off accumulating even more gold.
Chugs, Jay |
