Pengrowth Energy Trust (B)

PGF.B-T

They haven't moved to the more sustainable model of an income trust in the energy sector. There has been a dramatic shift of payout ratios trending very strongly downwards.

A well run company. A fairly safe place to be.

One of the original income trusts in Canada. In the last few years, it has not been doing as well, as some of its peer group. It still looks at itself is very much in the financial engineering mode where there has been a broad shift to growth through the drill bit. Had some stumbles.

Has fairly high cost production because its 2 largest properties have higher production costs. Represents reasonably good value.

Has not been as sustainable in their production as others. Has not heard the rumours that the A & B stocks will be merged.

Hasn't been a favourite of the street. Being undervalued by the market place. Good longer term assets out there. Not his favourite.

Been around a long time. There are better oil and gas trusts out there.

This one is a difficult situation for investors. A long term royalty trust, but hasn't kept up with its peers. A lttle bit late in moving to the newer model of holding back more of your cash and pay out less. Have had rising operating costs. Had some management changes. Better choices available.

One of the older trusts. Pays an exceptionally high return at about 15.5%. Had some positive management changes recently. Not on their radar screen.

Not one of his favourites. A little expensive.

Royalty trusts have come down in valuation versus corporations, so they're looking somewhat better on a relative value. Tjis one is not a favourite. Has a higher payout ratio than a lot of the others so it has a somewhat higher cost base. Prefers trusts with a lower payout ratio so they can grow organically.

One of the traditional royalty trusts and management looks at it as primarily and engineering vehicle that will replace reserves through acquisitions. Feels that the newer model is moving away from that by having smaller payout ratios and grow more through drilling. Have lightened up on this trust significantly.

Not what he would refer to as a sustaining model. Take its cash flow, pay out distributions and figure out your money for capital expansion, it is paying out 120/130% of its cash flow.

A $6/7 spread between the "A" shares and the "B" shares because of government ruling on US ownership. Management hasn't done a great job in running these trusts. If you buy, buy the "B" which is cheaper as they may discontinue the US one.

Prefers others, but this trust, through good times and bad, has managed to do a good job at acquiring assets and keeping the distribution going.