Oil & Gas Royalty Trust

Oil & Gas Royalty Trust:   An energy or oil and gas royalty trust is an investment vehicle that engages in the development, acquisition and/or production of oil and gas reserves. The trust receives royalty income from producing properties (essentially, net cash flow) and then sells interests in the trust (trust units) to investors. Conventional oil and gas royalty trusts are actively managed, typically holding assets of mature producing properties. Distributions paid by oil and gas trusts are highly dependent upon the cash flow generated by the trust. In general, the largest variables in determining the level of cash flow are the prices for crude oil and natural gas.  However, since December 31, 2010, most Canadian oil and gas royalty trusts have converted to corporations.

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