Canadian Oil Trusts
A Introduction to Canadian Oil Trusts and Canadian Oil Stocks

Also see

Canadian Oil Trusts
Canadian Oil Sands Trust
Canadian Oil Stocks
Canadian Income Trust Funds (List) (A list of Canadian Oil Trusts)

Canadian oil trusts, also known as Canadian royalty trusts, are oil and gas companies that, because of their special tax status, pay out a large percentage of their cash flow to shareholders in the form of monthly dividends.

The most well known Canadian oil trust is Canadian Oil Sands Trust, an open-ended investment trust that generates income from its 35.49 per cent working interest in the Syncrude Joint Venture, the world's largest producer of crude oil from oil sands and the largest single source producer in Canada.

Canadian oil trusts are the most controversial form of income trusts. The reason is that mines and oil and gas wells have limited lifespans. They eventually run out of oil or gas or coal or whatever.

Because of this, these Canadian oil trusts trusts must periodically have a new public offering of shares to finance the purchase of additional properties, or they must wind up at some point, liquidating remaining assets and distributing the proceeds to the unit-holders.

Canadian oil trusts are also subject to the vagaries of the commodity markets. Oil goes up. Profits go up. Distributions go up. And vice versa.