Despite a 25% average gain for juniors and 18.5% average total return for trusts between April and August, there are still some relative bargains in the energy sector, reports Iradesso, a Calgary-based investor relations firm.

In its survey, which compares on a quarterly basis the share prices, financial results and operating results of publicly traded Western Canadian conventional energy trusts and junior explorers and producers, Iradesso’s latest iQ report includes 77 Western Canadian junior oil and gas companies as well as 35 conventional energy trusts.

According to the report, most of the gains in share prices over the five-month period from April through August were achieved in the last two months.

When cross-referenced with other measurements such as cash flow netbacks per barrel of oil equivalent, debt to cash flow levels and quarterly production growth rates it is possible for investors to still identify bargains in the sector, the survey says.

Although the energy sector has been delivering remarkable returns for investors, Iradesso president Peter Knapp emphasizes that no one knows whether we’re at the peak of a commodity price cycle or simply partway through an upward climb.

“Since we can’t be sure of where we are in any given cycle, it is most
important to make sure we are invested in the strongest and most opportunistic companies and trusts,” Knapp said. “This way it doesn’t matter what happens on a macro level, our investments will make the best of the situation and provide the best return to investors.”

The iQ report says it can help investors do a sweep of the energy sector to pinpoint industry trends and companies or trusts that deserve further research. The report offers several parameters for examination of the industry.

Other highlights of the second quarter 2005 report include:
– Total daily production for the 77 juniors was 193,000 boe, while total daily production for the 35 conventional trusts was significantly greater at 853,000 boe.
– For juniors, median production per share was up 1% from the first quarter of 2005 to the second quarter of 2005. For trusts, the median production per unit decreased 4% from the first quarter to second quarter. These statistics suggest that it is a challenge for both juniors and trusts to add production in the current environment on an accretive basis.
– For juniors, median cash flow multiples are up again on a quarter-over-quarter basis. The median enterprise value rose to 9.1 times annualized cash flow from 6.1 times in the second quarter of last year.
– Juniors have surpassed trusts in terms of their market valuations on an enterprise value per boe basis. The median for juniors was $78,274 per boe/d, 3% higher than trusts valued at $76,286 of enterprise value per boe/d. Last quarter trusts were higher by 5%.
– Juniors continue to be weighted more to natural gas than trusts. For juniors, the median weighting was 68% natural gas production, while trusts had a median weighting of 58% natural gas.