» PrimeWest Energy (NYSE: PWI) agrees to a $2.4 billion buyout, highlighting the value of Candian oil and gas trusts.

PrimeWest Energy (NYSE: PWI) agrees to a $2.4 billion buyout, highlighting the value of Candian oil and gas trusts.

September 24, 2007 on 10:09 am | In Long Term Picks |

Sell PWI Near $26.35

Buy CNE Near $14.82

Today PrimeWest Energy agreed to be acquired by Abu Dhabi National Energy. Under the terms of the agreement Abu Dhabi agreed to buy all of the outstanding shares of PrimeWest for $26.75 per share.

We decided to sell our shares of PrimeWest near $26.35 and roll the proceeds into Canetic Resources (NYSE: CNE). Canetic is another Canadian oil and gas trust that pays a dividend of 15%. Despite record oil prices, the Canadian oil and gas trusts have largely failed to rally in the last year. During this time, output has remained steady and the dividend yield has been on the rise.

We think that the purchase of PrimeWest for a 33% premium shows the underlying value of Canadian oil and gas trusts. Canetic will likely receive more investor interest as the result of the PrimeWest buyout and Canetic could also be a compelling takeover target.

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Great pick with PWI guys, but more importantly wmayhem is back!!!! Lets get back to good old days of making big bucks on the likes of CREE and CLRK. Good to see you guys are sticking with the site and I look forward to more new picks.

Comment by Pligg — September 24, 2007 #
Welcome back guys and congrats on the PWI trade. Unfortunately, I already owned AAV and PWE so I didn’t follow your lead on PWI. This news has been good for AAV and PWE also, but not to the tune of the 40% gain you guys made in PWI.

Comment by Trader Joe — September 24, 2007 #
I like it. Even if CNE doesn’t become the next buyout target, sitting on a 15% dividend is not exactly a bad investment.

Comment by Larry — September 24, 2007 #
Welcome back, Mayhem! This has always been my favorite stock blog. I’m glad to see you’re back.

Comment by Isaac — September 24, 2007 #
glad your back!

Comment by JJ — September 24, 2007 #
ahhhh at last you are back.. !! good sense to stay mellow during the absolute ‘guessing game’ it’s been the last month or so..

Comment by tcct — September 24, 2007 #
Nice to see you around again

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hi mayhem, congrats on the PWI trade.

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