CANROY Merger Fever!
It seems that every CANROY I choose is either in the process of completing a merger or recently completed a merger. This trend continues with Pengrowth Energy Trust (PGH). Back in July, Pengrowth announced that it intended to purchase Calgary-based natural gas trust Espirit Energy Trust. This pair should produce a balance between Pengrowth's focus on oil and Espirit's focus on natural gas.
Given Pengrowth's current share price of approximately $23 per share, the monthly distributions represent an 11% return. Assuming the merger is approved, the addition of Espirit and its natural gas reserves, combined with the approaching winter heating season should protect or increase the monthly distribution (meets my goal of decreased volatility). Also worth noting, Pengrowth has approximately 10 years worth of proven reserves which means we could actually hold this stock for several years (meets my requirement of decreased portfolio churn). As I recently mentioned with Penn West, I will be looking for any price dips as an opportune time to start my position.
Update on Pengrowth / Espirit merger
Disclosure: I do not currently own PGH.
Given Pengrowth's current share price of approximately $23 per share, the monthly distributions represent an 11% return. Assuming the merger is approved, the addition of Espirit and its natural gas reserves, combined with the approaching winter heating season should protect or increase the monthly distribution (meets my goal of decreased volatility). Also worth noting, Pengrowth has approximately 10 years worth of proven reserves which means we could actually hold this stock for several years (meets my requirement of decreased portfolio churn). As I recently mentioned with Penn West, I will be looking for any price dips as an opportune time to start my position.
Update on Pengrowth / Espirit merger
Disclosure: I do not currently own PGH.
posted by Nate at 1:15 AM
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