Investing Options in Canadian Oil Sands and More

Investing in oil sounds like an ideal situation if you are looking for an opportunity, but avoid investments in the Middle East or otherwise outside the North American continent.  You can do this because one of the largest and richest supplies of oil is located in Canada, just north of the United States border.  The largest supply of oil is located in Alberta and commonly known as the Alberta oil sands.  This heavily rich area contains three major deposits of bitumen, which is a very thick and heavy form of crude oil.  It can be, and is being, turned into consumer based oil products at an ever-increasing rate.  However, the oil sands in Alberta are not the only opportunities for investments into the Canadian oil sector.

Just next door is the Saskatchewan oil deposits.  What makes the process so interesting is that while the Alberta province is forcing royalty increases on its oil producers, Saskatchewan is not doing this at all.  In fact, the government heads there have said repeatedly they have no plans to increase royalties and welcome production companies (and investors) to their deposits of oil.  Therefore, this opens an opportunity for investment in two different markets in the Canadian oil war.

The Alberta oil sands region is feeling the heat, as several of the production companies are looking for opportunities to move into the Saskatchewan region.  In 2007, some $200 million was in use for oil and gas rights in Saskatchewan.  Alberta is working hard to fight against a potential loss in investors, though.  They are offering various programs and looking to develop new royalty programs that will help to encourage oil and gas development throughout the Alberta oil sands region.

For example, companies that drill wells that go over 2,000 meters deep will receive incentives.  Some $1 million will be offset royalties (or up to 12 months of royalties will be offset.)  This program will not come into play until 2009.  What is unique about that incentive is that any company can come in and do the drilling, and there is no hold back on these breaks even if there is no success found in the drilling process.

As an investor, you need to consider carefully where you wish to invest.  Do you want to go for the largest and most well known investment in oil in Canada, through the Alberta oil sands?  Are you looking for the easier and less expensive investment opportunity found in Saskatchewan?  Both are ideal investments and the fact that there is a bit of an oil war going may be an ideal way for investors to finally turn away from the Middle East and focus on oil at home (or close to home.) 

September 1, 2008 | Filed Under Uncategorized | Leave a Comment 

Investing In the Canadian Oil Sands

The Canadian oil sands are a rich area of deposited bitumen, which, when converted, is a very heavy source of crude oil that can be used to provide power to just about anyone in the world.  In the Alberta region of the country, this large deposit is located, but the operations of running it are very costs and it can be a slow process. The wealth that is located in these oil sands is so much that people from around the world are investing in it.  You can do the same thing by investing in the Canadian Oil Sands Trust.

The Canadian oil sands trust is an income trust.  This means that it is an equity investment that is designed to provide cash flow from the operations to the unit holder.  One of the best benefits of investing in these oil sands in this way is that you can get the funds from the investment in a before tax manner, making them highly valuable and often times one of the best methods of investment.  This income trust is a good investment for many people.

Yet, there are risks to investing in an income trust such as this one.  Because the earnings and the cash flow from the business are the basis of the profits seen by the unit holders, there is a risk of losing money or not making any money.  These income trusts do not provide any type of fixed income payments like bonds do.  Rather, the risks can be high in many situations.

The Security

Like any type of investment, there are risks involves with the Canadian oil sands, yet there are many exciting opportunities as well.  The revenue produced by the Canadian sands is not at risk for stopping any time soon.  With the demand for oil ever increasing, it looks like there are significant opportunities for investment here.  While there is no guarantee with trusts, even in this type of income trust, there is some good opportunity here.

Getting Involved

You cannot purchase units directly from the Canadian Oil Sands Trust.  Rather, you must purchase them through a financial advisor.  The opportunities for investments are there through these brokers.  In addition to investing through financial advisors, some banks provide the Canadian oil sands as one of their investment vehicles.  Therefore, you may want to talk to your bank about putting your investments into this market.

Investing in the Canadian oil sands is a good opportunity for many people.  With the world’s dependency on oil so strong, it is undoubted that it will become one of the most important sources of fuel in the long term.  This income trust is one of the best ways for you to get into this market and it allows you to make a sizable investment in one of the worlds most sought after resources: oil.

September 1, 2008 | Filed Under Uncategorized | Leave a Comment 

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