Positive moves for ARC Energy Trust: a recent cash infusion, smart acquisitions and first class management make Arc Energy an attractive play

Money Digest, August, 1997 by Doug Hawkins

Arc Energy Trust issued 6.5 million new units in May at a price of $10.45 per unit, for gross proceeds of approximately $6.8 million.

The proceeds are being used to fund the recent acquisition of oil and gas properties now producing 1800 BOE per day and to provide additional financial flexibility for the trust to pursue other potential acquisitions.

Arc Energy Trust compares favourably to other large capitalization conventional oil and gas trusts. Based on the 1997 forecast distribution of $1.42, the trust units are now trading at a cash-on-cash level of 11.5% yield.

The new properties were purchased at an attractive price and have a long reserve. Existing properties have an extensive production history, low operating costs, and a balanced commodity mix.

Arc Financial, the manager of the trust, has extensive operational and financial experience in the oil and gas business. The trust has one of the lowest management fees of all large capitalization conventional oil and gas trusts.

In the first quarter of 1997, average production was 4482 bpd of crude oil and 28.4 mmcfd of natural gas. Starting August 15, 1997, distributions will be paid out monthly.