NAV Energy Trust (NVG.UN.TO)

There has always been a concern that it is highly concentrated in northern Alberta that has a very limited window when they can drill. High payout ratio.

There are others out there that are better. Has a relatively poor slate of assets.

Doesn't like that much due to the qualities of the properties. Relatively small trust, but illiquid for the numbers he is buying. Have heard others talk very highly of it.

A relatively small cap trust. Its resources are largely in Northern Alberta which has been a tough place in terms of getting services, etc. Has a pretty high debt. 2 to 1 in terms of debt to cash flow. Recent cut in distributions puts it in a more stable pattern.

Have recently cut its distributions. Market didn't see it coming. Had higher debt level and more production difficulties than its peers.

Was paying $0.15 a month in distribution but are now cutting it back to $0.10 in order to convert to a more sustainable business model. Will be able to retain more of their cash flow in order to spend more on development type drilling and capital programs. Still in the high risk area. Highly leveraged position at 2 X debt to cash flow. Low reserve life index and high decline rate properties. High risk.

Has never been a favourite with him. Ended up with a group of properties which were not the best quality. Were paying out more than they could generate on a cash flow basis and as a result they had to cut their cash flow. It should be merged in with a larger one. Too small to be a major player.

Sees a net "decline" in production over the next 12 months. Yield is about 17%, but with its decline in reserves, there is a real return of only about 6%.

Assets are not that great. Reasonably good, competent management. Doesn't get a lot of exposure on the street.