i agree that if you are looking for income the energy trusts are a much better bet than the banks. when oil is in the 40's, it is below the cost of production for conventional oil, much less the oil sands or other unconventional energy, so oil is bound to go higher, and probably sooner rather than later.

I'll just add that the current environment lends an advantage to any oil trust (or regular corp.) that has the financial ability to acquire reserves. The strong companies will emerge even stronger from this recent decline, so it's important to focus on the financial side of the equation. I would also favor those companies with a strong reserve position in western Canada where the necessary infrastructure and personnel are close at hand.

Strong balance sheet, good reserve life (10-12 years), good position in western markets.

Now here's the kicker:

http://www.theoildrum.com/story/2006...

If Cantarell rolls off anywhere close to these predictions, U.S. demand for Canadian oil will soar in the years ahead.

The final question you need to ask is what happens to the dividend once these trusts become regular corporations. We've already seen some consolidation in the sector, and a few trusts have already taken the plunge to become corporations. Size is important here. If you're small and have a proportionally good reserve base, you're a takeover target. If you're big you'll be looking to get bigger, so you have to take acquisition costs into account. Look for first movers that can do acquisitions now at a low cost. If that takes down the share price, so much the better as long as the results are accretive. What you lose in dividend post conversion will be made up for by retained earnings and an increased ability to grow reserves. Also, don't overlook the exploration potential. Some of these trusts have in-house programs that can grow reserves on existing properties.

Much to consider here, but no more difficult than analyzing the miners IMO.

ebear