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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (51771)	7/24/2004 9:32:24 AM
From: Seeker of Truth	Read Replies (1) \| Respond to of 74559

There's no suspicion, Jay. It's downright certain that as North America runs out of gas and oil they will either pass out of existence or else get transformed into a regular E and P company which cannot pay out so much of its cash flow(i.e. drastically reduce the pay out). Most of us have some kind of calculation that looks at the extra yield over the next n years versus the fairly steady decline in asset value PER UNIT and figures out the net advantage. Estimates only, natch. Peyto stands out as the exception. The yield isn't stunning; the tax deferred is negligible. It really does look like a regular Exploration and Production company. By the way, the whole idea of royalty trusts is being combatted by (hired I assume) professors of business administration who argue that the government is losing money thereby. They represent the real losers, the regular small Canadian oil companies who find their shares less popular than those of the trusts. They are fighting to repeal the tax advantages of trusts. Their cause looks hopeless to me, given the wide popularity of the trusts with Canadians. Oh yes, under some strange conditions, the unitholders could theoretically be liable for some of the debts of a trust. The law is anything but clear on this. No unitholder has ever been asked for a penny. Wishing a free hand on this, the various provincial governments have promised to issue clarifying legislation assuring that the unitholders have no such obligation but they never do so.