Monday, October 8, 2007

Arc Energy Trust is a Great Buy and Hold Income Producing Security

ARC Energy Trust - Symbol: AET.un on the TSX

My Target is CDN $22.50/unit over the next 12 months

ARC's assets are diversified throughout the Western Canadian Sedimentary Basin and production is balanced between oil and natural gas.

One of the more attractive investments in the Canadian royalty trust sector due to asset quality and longevity, an experienced management team and reasonable valuation relative to the peer group. Arc is a favourite of the institutional investors.

Arc has small production growth potential with Carbon Dioxide flooding in the old fields. I suspect that some of the "socially responsible" and "green" funds may use this as a rationalization to acquire units.

Arc Energy trust is trading at $21.70 and pays $0.20 per month ($2.40 per year) yielding 11.6%.

I don't have any units at this time.

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