Table Of Contents
Section 1: Introduction...........................................................................7
2008: Boom And Bust For Commodity Prices ........................................... 7
Section 2: Investment Themes & Valuation............................................9
Valuations Imply Attractive Potential For M&A And/Or Multiple Expansion
Should Costs/Prices Improve ................................................................. 9
Section 3: Industry Issues And Trends.................................................11
Increased Operating Costs In 2008 ...................................................... 11
Increased Activity Drives Reduced Capital Efficiencies............................. 12
Look For Muted Spending Levels In 2009 .............................................. 15
A Focus On Financial Flexibility In 2009 ................................................ 17
M&A Activity Picking Up And Likely To Remain Steady Through 2009........ 19
Trust Conversions Picking Up As 2011 Approaches ................................. 21
Not All Reserve Evaluations Are Comparable – Digging Deeper Into
“Reserve Quality”............................................................................... 23
Reserve Revisions .............................................................................. 28
The Ever-changing Royalty Regime; While Most Still Seem To Believe
Otherwise, Alberta Actually Has Improved Its Competiveness.................. 29
Section 4: Top Picks .............................................................................38
Trust Sector ...................................................................................... 38
Bonavista Energy Trust (BNP.UN-SO) ................................................ 38
Crescent Point Energy Trust (CPG.UN-SO).......................................... 38
Junior Sector ..................................................................................... 39
NuVista Energy Ltd. (NVA-SO) .......................................................... 39
Orleans Energy Ltd. (OEX-SO) .......................................................... 39
TriStar Oil & Gas Ltd. (TOG-SO) ........................................................ 39
Section 5: Commodity Price Overview..................................................41
Section 6: Trusts Benchmarking Analysis .............................................42
Capital Market Metrics ........................................................................ 42
Valuation Metrics ............................................................................... 44
Capital Efficiency Analysis ................................................................... 45
Operating Results .............................................................................. 51
Financial Results ................................................................................ 52
Leverage Ratios ................................................................................. 57
2009 Forecast Metrics......................................................................... 57
Section 7: Junior Benchmarking Analysis .............................................60
Capital Market Metrics ........................................................................ 61
Valuation Metrics ............................................................................... 62
Capital Efficiency Analysis ................................................................... 63
Operating Results .............................................................................. 69
Financial Results ................................................................................ 70
Leverage Ratios ................................................................................. 74
2009 Forecast Metrics......................................................................... 74
Section 8: Cash Flow And NAV Sensitivity Matrices .................................77
Price Target Calculations .......................................................................83
Price Target Calculations – Trusts ........................................................ 83
Price Target Calculations – Juniors ....................................................... 83
Key Risks To Price Targets .................................................................. 83