Talking DIVIDENDS "A-B-C's to LARGE PROFITS$$$" Message Board

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Strategies & Market Trends : Talking DIVIDENDS "A-B-C's to LARGE PROFITS$$$"

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To: c.j. who wrote (4)	3/7/1997 9:09:00 AM
From: Rick G.	of 46

Hi C.J., Yes I do hold these Trust Units and have had them in my portfolio for almost 1 year now. These units are difficult to understand. From what I know they are as follows. In the case of oil and gas, a corporation goes out and purchases a basket of operational wells. Say the buy 25. Since this is a depreiciating asset, and they will draw from the well at a certain rate, they have a minimum life to them. The Royalty Trusts are paying a quarterly distribution based upon the rate of production and the current market price of the resource. In the case of Luscar Coal (i.e. LUS.IR) this is a coal producer that has been in existance since the 1800's and they anticipate a minimum of a 30 year life span. They could, and most likely will continue to produce well past the 30 year of anticipated reserves, by using the money attained from the initial public offering, and purchasing new mines. I like APF Energy (i.e. AY.IR) the most. It is their distribution that is anticipated to be .44 cents. They purchased their wells at a discount and have calculated the distributions to be 18%(inclusive of return of capital of 5.5%)based on $10.00 per share. They reached this number based upon an $18 per barrel price. Since this past quarter the price of a barrel of oil has averaged over $21.00 they may even exceed the .44 cent distribution. Plus the fact that the share price is currently at $ 5.90 CAN .44 cents equates to 28% per year. APF Energy just opened for trading this past December so the charts would not be effective. Pretty solid investment. Not considered aggressive. Hope I have answered your questions. Take Care, Rick

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