Canada is poised to become a hotbed of M&A activity in 2007 thanks to the upcoming demise of tax breaks for trusts, but not the demise of the trusts, says Alan Tambosso, president of Calgary-based M&A and finance firm Sayer Energy Advisors. "Continued uncertainty in the trust sector does not mean that the oil and natural gas royalty income trusts are necessarily out of the M&A game altogether," Tambosso says. "Lots of product means the availability of accretive acquisitions for the trusts, just as it does for other companies." Many of them will combine in the coming year, however, he expects. "One obvious effect of the taxation issue will be a consolidation of the trusts, giving new life to the trust 'merger mania' that appeared to be under way early last spring," Tambosso says. For more on this, see the March issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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