Trust units of energy trusts,
such as Provident, are equities that allow unitholders
to participate in the purchase, development and
sale of oil and natural gas reserves, and energy
infrastructure such as midstream, pipeline, and
power assets. Energy trusts typically engage in
the lower-risk development-oriented part of the
energy value chain.
An energy trust is a tax-efficient investment
designed to pay out the net cash flow generated
from investment in oil and gas assets, including:
royalty payments; interest payments on debt and
principal re-payments to investors on a monthly
basis after the deduction of certain expenses
related to capital spending, bank debt repayments,
and contributions to the Reclamation Fund. |
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