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Abstract
Some of these trusts are not to be trifled with. Enerplus Resources Fund (NYSE: ERF; Toronto: ERF.UN) and ARC Energy Trust (Toronto: AET.UN) each have multibillion-dollar market caps. And many of these royalty trusts have plenty of fire power to make acquisitions, their main avenue for growth in reserves. For example, Canadian Oil Sands Trust (Toronto: COS.UN) recently acquired all of EnCana Corp.'s (NYSE: ECA) interests in the Syncrude oil sands project north of Fort McMurray, Alberta, for more than C$1.4 billion. Also, ARC recently bought privately held Star Oil & Gas Ltd. for C$632 million. Some of these trusts have displayed rapid growth. Since Harvest Energy Trust (Toronto: HTE.UN) went public in December 2002, its production has grown to 10,600 barrels of oil equivalent per day, while returning 40 percent to unitholders. Every month it distributes 20 cents per unit.
The amount of attention paid these trusts from "the Americans" is gaining ground. Trusts that trade on large U.S. exchanges include Enerplus, NCE Petrofund (Amex: NCN; Toronto: NCF.UN), Pengrowth Energy Trust (NYSE: PGH; Toronto: PGF.UN), PrimeWest Energy Trust (NYSE: PWI; Toronto: PWI.UN) and Provident Energy Trust (Amex: PVX; Toronto: PVE.UN).
Last year, Enerplus placed private debt in the amount of US$175 million with 11 U.S. institutions. And even trusts that do not trade on U.S. exchanges recognize the value of American dollars. When Canadian Oil Sands needed to finance its acquisition from EnCana, it did so in part through a private equity placement of US$325 million with U.S.-based Capital Research & Management Co.