Opinions
Garth Jestley
NAV Energy Trust
NVG.UN-T
DON'T BUY
Jun 03, 2005
A relatively small cap trust. Its resources are largely in Northern Alberta which has been a tough place in terms of getting services, etc. Has a pretty high debt. 2 to 1 in terms of debt to cash flow. Recent cut in distributions puts it in a more stable pattern.
$7.610
Stock price when the opinion was issued
oil
gas
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SELL
Has never been a favourite with him. Ended up with a group of properties which were not the best quality. Were paying out more than they could generate on a cash flow basis and as a result they had to cut their cash flow. It should be merged in with a larger one. Too small to be a major player.
oil
gas
DON'T BUY
Was paying $0.15 a month in distribution but are now cutting it back to $0.10 in order to convert to a more sustainable business model. Will be able to retain more of their cash flow in order to spend more on development type drilling and capital programs. Still in the high risk area. Highly leveraged position at 2 X debt to cash flow. Low reserve life index and high decline rate properties. High risk.
oil
gas