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Stockchase Opinions

Michele RobitaillePrime West Energy TrustPWI.UN.TOCOMMENTJun 11, 2007

You will start to see a lot of these companies struggle.
$22.72

Stock price when the opinion was issued

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BUY ON WEAKNESS
You have to have a 3-year view on this. He would prefer it at $30. Likelihood of increasing dividends.
SELL
Has been the subject of her recent takeover from Abu Dhabi’s Taqa. It is almost trading at the deal price. Holding it for the next couple of months will give you a limited distribution. There is a slight bit of deal risk because of Alberta’s royalty review. He suggests you take your profits and run.
COMMENT
Abu Dhabi National Energy is acquiring this company, which is a positive. Other trusts could also be targeted. 2 of his favourites Focus Energy (FET.UN-T) and Progress Energy (PGX.UN-T) are possibilities.
WEAK BUY
Acquired Shiningbank (SHN.UN-T). Yields are approaching 14%. Wonders about production profile going forward but the acquisition should help. If you are confident on natural gas prices remaining solid, it could be okay. Risk/reward is weak.
COMMENT
3 gas-weighted companies that he feels will cut distributions are Trilogy (TET.UN-T), Advantage Energy (AVN.UN-T) and Prime West (PWI.UN-T).
DON'T BUY
Merged with Shiningbank Energy (SHN.UN-T). Not particularly a great deal and doesn't represent a significant improvement to Primewest at this point. 13% yield.
COMMENT
No longer own. In evaluating energy income trusts, they ask, what are their reserves, how successful the company and management has been at finding and replacing those reserves, what is the quality of the balance sheet, ie does the company have the ability to survive a downdraft in the future.Likes to see a production profile that's increasing.
COMMENT
Merging with Shiningbank (SHN.UN-T). This will be an extremely large, gas focused trust. This will give them better economies of scale. Management team is very strong.
HOLD
Just announced a merger with Shiningbank (SHN.UN-T).
DON'T BUY
Their cash flow is basically royalties collected on production. It is suspected they will not be able to sustain their distributions at current levels. Going forward, he is not sure this is going to be one of the survivors.
SHORT
Steep decline and high debt level. If you own sell. If you want a short position, this would be one.
BUY
Some of the royalty trust that he likes includes Prime West Energy (PWI.UN-T), Precision Drilling (PD.UN-T), Advantage Energy (AVN.UN-T).
DON'T BUY
Lowered distributions twice recently. Not one of the higher quality names. Paying out more than he would like to see.
WEAK BUY
Hasn't been one of his favourites. Management is okay. Not that bad, but prefers others.