Business
Energy trusts provide stable returns for investors in 2006 despite slip in natural gas prices
Energy trusts provide stable returns for investors in 2006 despite slip in natural gas prices.
About this update from Baytex Energy Corp.
[{"type":"text","content":"\n\n\n\n\nCALGARY, Sept. 8 /CNW/ - Despite lower natural gas prices, the average\nenergy trust investor managed to record a gain on Canada's stock exchanges\nduring July and August of 2006, a report released Friday shows.\nThe quarterly iQ Report by Iradesso Communications, a Calgary-based\ninvestor relations firm, tracks the performance of publicly traded energy\ntrusts and junior oil and gas companies that operate primarily in Western\nCanada. The 84 juniors included in the comparison produce between 500 and\n15,000 barrels of oil equivalent per day while the 30 trusts focus on\nconventional oil and gas production.\nFor the trusts, the median total return - defined as the change in the\nunit price combined with cash distributions - from June 30 to August 31, 2006\nwas four percent. Energy trusts provided a range of total returns, topping out\nat 21 percent and bottoming out at minus 16 percent. The trusts that provided\nthe top returns during July and August 2006 were Esprit Energy Trust\n(TSX-EEE.UN) at 21 percent, Fairborne Energy Trust (TSX-FEL.UN) at 15 percent\nand Baytex Energy Trust (TSX:BTE.UN) at 12 percent.\nWhile 26 of 30 energy trusts (87 percent) delivered positive returns in\nJuly and August, the energy trusts were relatively flat in the first half of\nthe year. The median total return for trusts was even in the first quarter and\nminus one percent for the second quarter.\nOf the 84 juniors in Iradesso's report, 52 (62 percent) delivered\npositive returns in July and August with a median increase of five percent. In\nthe first half of the year, however, juniors had median share price decreases\nof eight percent in the first quarter followed by a median decrease of 12\npercent in the second quarter.\n\"Energy trust investors have fared better than the juniors due to a\ngreater weighting to oil, effective commodity price hedging and monthly cash\ndistributions to unitholders,\" said Iradesso president Peter Knapp. \"These\nresults reinforce that investors should be looking to trusts for stability\nwhile they look to juniors for potentially extraordinary returns with greater\nvolatility.\"\nDuring the months of July and August, the top three juniors were West\nEnergy Ltd. (TSX-WTL) at 44 percent, RSX Energy Inc. (TSXV-RSX) at 43 percent\nand Yoho Resources Inc. (TSXV-YO) at 40 percent.\nThe bottom three performers f...