Calgary-based Peak Energy Services Trust plans to convert to a growth-oriented corporation pursuant to a plan of arrangement under the Business Corporations Act (Alberta). Peak will be seeking approval from unitholders at a special meeting of unitholders and expects to complete the conversion by January 1, 2011.

On October 31, 2006, the Department of Finance announced the Specified Investment Flow-Through Trust ("SIFT") income and distribution tax, which effectively eliminated the benefits of Peak's income trust structure by introducing additional income taxes to be imposed on income trusts (generally) for taxation years commencing January 1, 2011. In order to qualify under legislation for a tax-deferred conversion, Peak must convert to a corporation before the end of 2013. Having considered these legislative changes, the current challenging economic and industry environment as well as the opportunities arising in such environment to execute on Peak's strategic plan, Peak believes that it is in its best interests to proceed with the conversion at this time.

The proposed conversion will be completed in compliance with the exchange method provided for under the Income Tax Act (Canada). The conversion requires a meeting whereby Peak will be seeking the approval of Peak's unitholders, as well as customary court and regulatory approvals.

Peak is a diversified energy services organization operating in western Canada and in the U.S. Through its various operating divisions, the Trust provides drilling and production services to its customers both in the conventional oil and gas industry as well, as the oil-sands regions of western Canada. The Trust also provides water technology solutions.