Investing in the Oilsands with Temple Real Estate

Temple Real Estate (TRLSF.PK) is a Real Estate Investment Trust [REIT] that has numerous properties throughout Western Canada, in particular Fort McMurray, Alberta.

From their website:

The focus of TREIT is to acquire hotel properties in primary and secondary markets across Canada with stable cash flow and the potential for capital appreciation which, when combined with experienced management, will provide Unitholders with cash distributions and growth in investment value.

They have 6 hotels in Fort McMurray, 1 in Sask, and 1 in The Northwest Territories.

From The Fort McMurray website:

"Experience the Energy"

Thank you to the over 5,000 people who participated in our tour program in 2007 and "Experienced the Energy" of Canada's massive economic giant (The Oil Sands). Watch this site for info regarding the 2008 season that will commence May 17.

Aerial Oil Sand Tours

Wood Buffalo Helicopters invites you to join them for a Heli-Tour of Fort McMurray and the oil sands. Lasting approximately one hour, tours can accommodate 4 or more passengers and is certainly a great way to grasp the true size of the oil sands operations. Custom tours can also be arranged.

OK, So, you get the point. Fort Mac is the main hub for the oil sands.

Lets look at the numbers.

The trust has existed since October of 2006.

They have raised the distribution 4 times since inception.

The CEO owns roughly 1,000,000 units of a roughly 9,500,000 million unit float.

He has bought roughly 200,000 units in the last 120 days. Almost all of it in the public market.

Here is some recent activity

Feb 07/08 Jan 31/08 Thorsteinson, Arni Clayton Indirect Ownership Trust Units 10 - Acquisition in the public market 25,000 $6.350

Feb 06/08 Jan 31/08 Thorsteinson, Arni Clayton Indirect Ownership Trust Units 10 - Acquisition in the public market 2,000 $6.300

Jan 30/08 Jan 21/08 Thorsteinson, Arni Clayton Indirect Ownership Trust Units 11 - Acquisition carried out privately 5,000 $6.000

Jan 30/08 Jan 21/08 Thorsteinson, Arni Clayton Indirect Ownership Trust Units 10 - Acquisition in the public market 5,000 $5.850

Occupancy rates are at 81%, up from 76%

Room rates are at $181. up from $175.

Oil companies are signing longer contracts at higher rates.

The forward POR under the new distribution of 96 cents/year is expected to be 70%.

The trust is currently yielding 15.36%.

When I was talking to management recently. they were comparing themselves to other lodging REITs. I wanted to tell them, "you're not a REIT, you're an oilsands company". If you're looking for an energy play without being exposed to the vagaries of the commodity markets, this could be it.

Disclosure: Author holds a long position in TRLSF.PK