Oil and gas companies in Canada are also known as Canadian oil trusts as well as Canadian royalty trusts. This is primarily because of their special tax status. Such companies are regulated to give out a large percentage of their earnings to their sh
The country has a fare share of oil and gas trusts. However some names are more popular than others. Perhaps the most popular oil and gas trust in all of Canada is the Canadian Oil Sands. This is an open ended investment trust which has its 35.49% working interest in the Syncrude Joint Venture as its major income. This is the world’s largest producer of oil sands and crude oil and is also credited as being the largest single source producer in all of Canada.
Canadian oil sands trust is regarded as being the largest pure play investment opportunity in all of Alberta oil sands. This is a massive resource that is actually at par with the kind of oil reserves found in Saudi Arabia. The Canadian Oil Sands Trust has a total of 92.1 million units outstanding at the moment. These are traded on the Toronto Stock exchange on a daily basis.
Canadian Oil and Gas Trusts Controversy
Although there are many Canadian oil and gas trusts in the nation they are at the brunt of controversy because of the nature of their operations. The reason behind this is because they generate the income from oil and gas wells which are known to have limited life spans. Eventually they are bound to run out of oil and gas and consequently their income will come to a standstill.
In order to combat this unpredictability you will find that Canadian oil and gas trusts periodically offer new shares to the public that help them to generate adequate finances for the purchase of more property. If this is not done they will be forced to wind up at some point or the other following which they will have to liquidate the remaining assets and distribute the proceedings from their sale to the unit holders. Oil trusts also comply with the conventional vagaries of the commodity market. As oil goes up so does the earning and hence the distribution.
Investing in Canadian Oil and Gas Stocks
Canadian oil stocks offer an excellent opportunity to combat the rise of oil prices in the form of investments. Basically by investing in Canadian oil stocks you will be contributing to devalue the US dollar. At the same time you will benefit the Canadian dollar as it will have better chances of appreciation. When looking to invest in Canadian oil and gas companies there are a number of formidable trusts that you can go for.
Canadian Oil Sands is definitely on top of the list. Other than that Imperial oil Ltd. is also a company worth looking into. Then you have other companies such as Suncor Energy Inc., En Cana Corp, Talisman Energy Inc, Petro Canada Ltd. and Shell Canada Ltd.