mplaut

Canadian Royalty Trusts Will Never Return to Their Former Glory

I was wondering why you did not mention CPG in the article, but I see that you mentioned it in a comment.

I think that the arguments are basically correct and none of those who disagreed in the comments actually refuted any of the substantive points.

I think that the summary is that the Canroys are not good businesses the way most are run, and now that they are losing their tax advantages, they are left with their flawed business models, or flawed implementations of their good models.

I was also surprised - since you seemed to be in favor of Canroys converting to MLPs - that you did not recommend good MLPs for those who are interested in yield in O&G businesses. The good upstream MLPs, like LINE and EVEP, are great values now and their numbers are better than the Canroy numbers every were. LINE is 100% hedged until the end of 2011 and has around 20 years of reserves. It does not need to raise capital in the near future. Its distributions are tax advantaged for US investors, though not so for Canadians.