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

To: Seeker of Truth who wrote (7735)	10/1/2004 8:38:06 AM
From: Tommaso	Read Replies (1) \| Respond to of 11633

Malcolm, I do hold several smaller Canadian exploration/producer companies, that I hoped would be acquisisition candidates. Instead a couple of them have converted to trusts (Vermilion and just now Esprit), which turns out not to be a bad outcome (Vermilion tripled). But I still hold Gentry, Purcell, and True Energy. Incidentally, I wonder if anyone has set up a mutual fund for these and even smaller companies.

To: Seeker of Truth who wrote (7735)	10/1/2004 4:25:06 PM
From: Taikun	Respond to of 11633

Hi Malcolm, Though I don't know the oil services industry well, from reading analyst reports I find a few interesting notes: 1. oil services firms often have geographic and thus environmental advantage-in other words programmers in Bangalore will not know how to deal with permafrost in Canada's North or understand why drilling can be cyclical in some areas due to the freeze-ups. Possibly unrelated, but I bought a fireplace gate from Amazon.com and they sent the wrong item. When I went to return it initially I had to deal with customer service in India. "What's a fireplace?" 2. oil services firms develop specialized knowledge for different types of drilling. The deepsea drillers do not have business in Canada's North, and I don't yet see many of Canada's drillers doing deepsea drilling in the North Sea. 3. I have noticed that oil services companies seem to get better value out of building their own rigs rather than buying on the open market, new or used. Building allows the oil services firm to integrate specialized knowlege (we want to position this device here because it works better with that device). Programmers in Bangalore won't know that. I think programmers in Bangalore can work easily with a large installed base of personal computers running windows. My Firefox browser doesn't work on many websites and the Mac we have for movie editing doesn't get viruses. I notice that in Russia when BP entered into a JV with TNK BP brought to the table not software but a device that can blast through sandstone unleashing additional caches of oil. Russia, they are now saying, may have 3x the oil originally thought. (WSJ 9/30/05 page 1) My point is that oil services is much more like a visit to the doctor than buying a piece of software. In other words-specialized. Personally, I have favored the resource-owners but as the world begins to search for that marginal drop of oil I can only see benefits for the drillers. TDG's President wants to payout $1.50 p.a. on a unit that traded below $9 this week. TOT.TO has a P/E of 10 in a market where the other service cos (CFW, SLB, PDS) have multiples many times that. It is not a big part of my portfolio but I do think they are attractive compared to some of the O&G CRTs.