Obsidian Energy

OBE-T

A very reasonable entry point. The low payout ratio is a good sign. This is an established management team taking over an enormous tract of land.

A very well managed company and now that they have the ruling that they can go to a trust the question is what is the payout ratio going to be. If you have a company with longer than a 7/8 year proven reserve life and a P+P "poven + probable" of over 10 years, you have a good investment. Doesn't know on this one.

Had a 3 for 1 split recently. Going to have the largest production base of any royalty trust, about 100,000 barrels a day. When it goes into the index, it will be one of the top 5 names owned by pension funds.

Anticipated they were going to be a trust. Its intrinsic value was $66. He planned to sell off the trust portion and keep the exploration & development rump which is where the value was. Company couldn't do it, so he is going to sit on it.

One of the larger oil producers in western Canada that decided to become an income trust. Spent many months negotiating with Revenue Canada before getting the go ahead. Everybody had anticipated that it was going to have a spin off, but they held onto all their assets and a lot of people were quite annoyed. Hasn't done much. A definite Buy.

Very large, well diversified royalty trusts that will be in demand going forward. What may be holding back the units at this time, people will have to become more comfortable as to how it will operate as an income trust.

Has about 5,000,000 acres of undeveloped land. Farming out their land which should be quite successful. Relatively low payout ratio.