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Advantage Energy Income Fund Offers A Dynamite Dividend

If held in an IRA or similar, there is a 20% withholding that you cannot get back. If held in a regular taxable account, there is still the Canadian tax but you get a dollar-for-dollar offset on your US Income Taxes in the form of the Foreign Tax Credit. So if you have $200 withheld by the Canucks, you get a credit of $200 on your bill to Uncle Sam. Not a deduction, a credit.

Advantage Energy Income Fund Offers A Dynamite Dividend

Just looked; they produce about 174 MMCFe/day and got $8.65/mcfe Canadian$. They have a reserves life of 11 years and supposedly 4 years of drilling locations inventory. They replaced 104% of their production with new reserves in 2006. They yielded $4.19/mcfe in Cash From Operations in the 1st Quarter (again, CA $). And, their 2006 annual report states that their reserves have a Present Value at 10% of $12.29 per unit/share. I'd say their assets are worth a bunch more than the dividend.

Advantage Energy Income Fund Offers A Dynamite Dividend

You sure about that? The dividend is $169.7 MM (based on 105+MM shares and a $1.61/shr dividend. I haven't been able to pull up their reserves and current production numbers, but reserves are selling for $2-3/mcf which says their annual dividend is roughly 55-85 BCF per year or 150 - 230 MMCF/day. And remember, since this is a royalty trust, they pass on the majority of the cash flow to the shareholders and their dividends as quoted include a return of capital component. If I get some additional information I'll pass it on tonight.