Essential Energy Services Trust

Essential Energy Services Trust

November 10, 2009 19:18 ET

Essential Energy Services Trust Announces Intention to Convert to a Corporation

CALGARY, ALBERTA--(Marketwire - Nov. 10, 2009) -


Essential Energy Services Trust (TSX:ESN.UN) ("Essential" or the "Trust") announces its intention to convert to a growth-oriented corporation (the "Conversion") pursuant to a Plan of Arrangement under the Business Corporations Act (Alberta). The Trust anticipates seeking approval from unitholders in conjunction with the 2010 annual general meeting and expects to complete the Conversion prior to April 30, 2010.

On October 31, 2006, the Minister of Finance announced the Specified Investment Flow Through Trust ("SIFT") income and distribution tax which effectively eliminated public income trusts. Additional income taxes will be imposed on trusts for taxation years commencing January 1, 2011. Legislation provides for conversion on a tax-free basis, as long as conversion occurs prior to 2013.

The Board of Directors believes it is the right time to proceed with a Conversion for the following reasons:

- Conversion removes the uncertainty of when Essential will convert to a corporation. Essential believes this is important for future attraction and retention of investors.

- Access to capital for income trusts may become limited as January 2011 nears.

- The Trust anticipates efficiencies and cost savings from presenting the Conversion to the unitholders in conjunction with the annual general meeting as there will only be one proxy circular and one mailing to unitholders.

- Conversion removes the restriction on the level of ownership by non-residents.

- Conversion can occur on a tax-free basis.

- Conversion removes the growth threshold imposed by the SIFT legislation.

The Conversion will be subject to required regulatory approvals and to unitholder approval. Further details about the precise timing and mechanics of the Conversion can be anticipated in the first quarter of 2010.


Essential Energy Services Trust provides oilfield services to oil and gas producers in western Canada related to the ongoing servicing of producing wells and new drilling activity.


This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, this news release contains forward-looking statements including expectations as to the benefits and anticipated timing of the Conversion, plans of the Trust on completion of the Conversion and the effect thereof, expectations regarding the implementation of legislation, expectations regarding capital spending and cost saving measures, the sources of capital and uses of such capital, the services offered by the Trust and expectations regarding the business, operations and revenues of the Trust in addition to general economic conditions. Although the Trust believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Trust can give no assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oilfield services sector (e.g. demand, pricing and terms for oilfield services; current and expected oil and gas prices; exploration and development costs and delays; reserves discovery and decline rates; pipeline and transportation capacity; weather, health, safety and environmental risks), integration of acquisitions, competition, and uncertainties resulting from potential delays or changes in plans with respect to acquisitions, development projects or capital expenditures and changes in legislation, including but not limited to tax laws, royalties and environmental regulation, risks associated with the potential inability to obtain required consents for the Conversion, including unit holder approval and court approval, failure to realize the benefits of the Conversion, stock market volatility and the inability to access sufficient capital from external and internal sources, and the inability to pay dividends. Accordingly, readers should not place undue reliance on the forward-looking statements.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Trust's financial results are included in the Trust's securities filings with applicable securities regulatory authorities and may be accessed through the SEDAR website ( The forward-looking statements and information contained in this news release are made as of the date hereof and the Trust undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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