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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Scott Mc who wrote (638)	12/6/2000 1:49:32 PM
From: LLCF	Respond to of 11633

Notice the advance in the CD$ goosing returns for us Yanks :) DAK

To: Scott Mc who wrote (638)	12/6/2000 11:11:12 PM
From: Lorne Larson	Read Replies (1) \| Respond to of 11633

Scott: My reading is that they acquired 92% of the partnership for $3.3 million. The partnership owns a 11.7136% royalty interest, so they get 92% of that. The partnership also owns other assets, so they effectively get 92% of those interests. However they effectively also only "assume" 92% of the debt of the partnership in the amount of $77.8 million. So they paid a total of $74.9 million ($3.3 plus 92% of $77.8). For that they get 2400 BOE/day. This translates into $31200 per flowing BOE/day, which is certainly in the range of recent acquisitions in the oil patch. In terms of funds flow, here is my amateurish analysis: - 2400 BOE/Day at est $40.00/BOE is annual revenue of $35 million. - operating costs, royalties, administration, management fees, etc of $12 million (complete guesswork). - principal and interest payments on debt of about $10 million. - means cash available for distribution of $13 million, which with 15 million issued shares is .87/unit, or .07/month. This is of course in addition to whatever distribution their present properties support. What am I missing here? I suspect there may be substantial capital cost contributions required in respect to the on-going work on the Weyburn unit mentioned in their press release. Hopefully when they announce the dividend they'll give us an analysis of how they arrived at it. I'm now hoping for a dividend of at least .12/month. Anything less would be a disappointment. At a yield of 20% to 25% (which other trusts are priced at) this would mean a price $7.20 to $5.75. However as previously mentioned on this site the tax treatment of the dividends may impact on this.