The Globe and Mail reports in its Thursday, Nov. 25, edition that Eagle Energy Trust has been created to take advantage of an exception in the new rules for trusts that allows them to avoid punitive taxes by holding only foreign assets. The Globe's Nathan VanderKlippe writes that while the new company will be headquartered in Calgary, its sole asset is an interest in a Texas oil field, which is currently producing 900 barrels a day. However, Eagle believes it can quickly increase production, hitting 1,200 barrels a day by year's end. The promise of a 50-per-cent projected payout ratio -- with all of the tax advantages of a trust -- proved attractive enough to investors that Eagle raised $150-million in its initial public offering. Its units began trading Wednesday and closed at $10.01, a penny above the IPO price. The number of energy trusts has fallen dramatically since Oct. 31, 2006, when the federal government announced a 34-per-cent new tax on trust distributions. At that time, the Toronto Stock Exchange boasted 32 energy trusts with a combined market capitalization of $83.9-billion. In four years, that shrank to 13 with a total value of $57.2-billion.
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