Opinions
Matt Baillie
Viking Energy Royalty Trust
VKR.UN-T
BUY
Jul 15, 2005
Royalty trusts in general haven't been keeping up with the oil stocks and are now in line on a cash flow basis with the oil corporations. Look a lot more attractive. This one has a lower payout ratio than last year. Lower valuation than the group because it is somewhat of a turn around story. Prefers others, but doesn't think you will get hurt on this one.
$7.570
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HOLD
Merging with Harvest Energy Trust (THE.UN-T). Because Viking pays out more in distributions, Holders of Harvest Energy will get less in distributions. We'll probably become a better run trust because of the merger. If you own, wait until it gets listed on the exchange and then take some profits, probably in the first quarter.
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HOLD
This one is merging with Harvest Energy (HTE.UN-T). The combined trust will be attractive to large institutional investors which will create an improved valuation. It is possible they could get a US listing that would improve the valuation. On Mergers, there is always integration risks but in 6/9 months, it will be a good trust.
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