Hi SofaSpud
In regards to your most major concern regarding energy trusts.
I wouldn't be overly concerned about U.S. companies acquiring these type assets in Canada. The most major U.S. independents are actually departing Canada at the moment.
Anadarko and Devon I believe are two of them - I would have to verify that for I am saying that off the top of my head. Another large company operating in Canada is Apache - not sure what's going on with them in Canada (CBM primarily).
My Past and Current Personal Thoughts Regarding Energy Trusts;
Pre-2005
I purposely stayed away from E&P operators among the trusts. I am from the old school of thought that they only really held tired assets.
2005-06
The landscape began to change. First, junior oils merged and via Plans of Arrangements, emerged as an energy trust. Personally, I began to accumulate some of the small spinout companies resulting from the transitions. In general terms, I did not like the new energy trusts. (Bit on one - but sold it 6-months later at a small profit).
Next, energy trusts began to buy out small junior oils. My opinion was that the trusts were dressing up their land holdings and operations. I compared that to fund managers dressing up their portfolios at year end (Same concept). I also questioned as to why a junior with real growth ahead of them would sell out.
The one thing that did interest me were the E&P operating trusts that financed start-up international companies, retaining a high percentage of ownership in the new company. To me, that implied a long term favorable situation. The one E&P trust that I did buy into did that - after I bought into it.
The next thing that emerged was the conversion of service companies into energy trusts. I really liked that situation. I quickly bought into Precision Drilling and Mullen Transportation. Unlike the O&G operator trusts, I did not question their operations. These are great proven companies.
I eased up on my opinion on E&P trusts with the beginning of major companies converting into them - Penn West Petroleum being the most noteworthy. At the same time, word was that EnCana was going to do the same.
Next, with increased expense, energy trusts began to merge themselves, creating a greater land mass with higher netbacks.
Last, the end tell-tail signs, the election campaign and then the official announcement of the new imposed tax and the end of relaxed reporting - leading us to where we are at this point.
I believe the energy trusts are to be in full compliance by 2011. Exactly how the process works, I don't know at this point. I believe new energy trusts will start up under the new regulations. With that in mind, I further believe the older energy trusts are at risk - the younger trusts less risky. My current end thought is that energy trusts going forward are not attractive. One thing for sure, new E&P energy trusts will be at a minimum. I also see a reverse in corporate structuring in the near future.
When listening to comments about the future of energy trusts, consider the source and motives of the source.
Keep in mind - just one persons opinion.
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