# PrairieSky Royalty IPO



## blin10 (Jun 27, 2011)

anyone in on this IPO or am I the only one? Encana spin off, I think it has good potential... about 5% dividend is planned as well.. discuss


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## Lena100 (Mar 16, 2014)

According to BNN, people oversubscribed to this IPO. It will be listed and selling at TSE sometime next week. I am looking forward to getting in then. Blin10, did you get your order filled?


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## AltaRed (Jun 8, 2009)

Lena100 said:


> According to BNN, people oversubscribed to this IPO. It will be listed and selling at TSE sometime next week. I am looking forward to getting in then. Blin10, did you get your order filled?


Just so you know, lots of IPOs are oversubscribed so that sound bite may not be terribly relevant. For those without access to the IPO opportunity, I quote the following excerpt which might be of some interest



> EXPECTED YIELD: Approximately 4.5%
> 
> RETAINED INTEREST: Upon Closing, it is expected that the Selling Shareholder will own 60% of the outstanding Common Shares (54% if the Over-Allotment Option is exercised in full).
> 
> DIVIDEND POLICY: The Company intends to use the majority of its free cash flow to pay dividends to shareholders. The board of directors of the Company (the “Board”) is expected to establish a dividend policy pursuant to which the Company will pay a monthly dividend, initially expected to be in the amount of $1.27 per Common Share on an annualized basis, which would have represented a payout ratio of approximately 85% in 2013. The payment of dividends is not guaranteed and the amount and timing of any dividends payable will be at the discretion of the Board. The first dividend from the period from Closing to June 30, 2014 is expected to be paid on or about July 15, 2014 to shareholders of record on June 30, 2014 in the amount of $0.1058 per Common Share.


And from the prospectus itself



> The Company will encourage third parties to actively develop the Royalty Properties, while strategically seeking additional petroleum and natural gas assets that provide the Company with medium-term to long-term value enhancement potential. The Company does not intend to directly conduct operations to explore for,
> develop or produce petroleum or natural gas. Rather, third party development of the Royalty Properties is expected to provide the Company with sustainable royalty
> revenues as petroleum and natural gas are produced from such properties, with minimal or no operating costs, capital costs, environmental liabilities or reclamation
> obligations associated with petroleum and natural gas development incurred on the part of the Company.


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## doctrine (Sep 30, 2011)

Valuation is everything. It should be pretty easy to compare this company to similar ones, say Freehold Royalties (FRU.TO), for yield/payout/growth comparisons.


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## gibor365 (Apr 1, 2011)

blin10 said:


> anyone in on this IPO or am I the only one? Encana spin off, I think it has good potential... about 5% dividend is planned as well.. discuss


After PSN spin off and delisting , I'm a little skeptical ab out such spin offs


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## blin10 (Jun 27, 2011)

Lena100 said:


> According to BNN, people oversubscribed to this IPO. It will be listed and selling at TSE sometime next week. I am looking forward to getting in then. Blin10, did you get your order filled?


yap got some shares allocated from the ipo...


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## blin10 (Jun 27, 2011)

gibor said:


> After PSN spin off and delisting , I'm a little skeptical ab out such spin offs


ya but this is from encana... can't compare, we'll see how it'll go


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## AltaRed (Jun 8, 2009)

Success will all depend on who, and how much, anyone wants to develop (incrementally) ECA's freehold lands in Southern AB, etc. Much of that has been exploited, originally by PanCanadian and then ECA for decades. Most economic opportunities are long gone... I am skeptical.


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## blin10 (Jun 27, 2011)

AltaRed said:


> Success will all depend on who, and how much, anyone wants to develop (incrementally) ECA's freehold lands in Southern AB, etc. Much of that has been exploited, originally by PanCanadian and then ECA for decades. Most economic opportunities are long gone... I am skeptical.


keep in mind, this IPO is in high demand, funds buying this are not stupid... they were planning to sell this IPO at 23-26.5 a share, but because of huge demand it's going for 28... in my opinion that's a good sign, I'd be more worried if it went for 23 with little demand


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## GoldStone (Mar 6, 2011)

Another critical factor is the mix between dry gas, liquids and oil. My understanding is that Encana's lands are mostly dry gas (I haven't looked closely - I may be wrong here). Dry gas prices have rebounded a bit after the cold winter. Is this rebound sustainable? I've seen reports that it may be just a temporary blip until gas storage is refilled.


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## Zoombie (Jan 10, 2012)

Did it list in prospectus what the annual expected royalty/revenue is? I have been unable to find that info anywhere, and that would be the basis of valuation IMO.


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## doctrine (Sep 30, 2011)

Up 32% on the first day of the IPO. Globe reports that the IPO was 15 times oversubscribed.

http://www.theglobeandmail.com/repo...ce-raised/article18906699/#dashboard/follows/

I also noticed that Freehold Royalties (FRU.TO) was up 4-5% today, probably just by name association.


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## blin10 (Jun 27, 2011)

ya this is insane...not sure who's buying right now, price seems to be way up


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## Lena100 (Mar 16, 2014)

What is a good entry point for this stock? I wish I had subscribed to the IPO. It would be a good stock to hold for long term...


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## daddybigbucks (Jan 30, 2011)

i dipped my feet in. 
Not sure what i think about his.
it would be most prudent to wait as most of the bids are 1 lot at a time.

its always nice when you have a big parent company owning most of the share sthough.


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