Friday‘s proposal sent unit prices soaring more than 20 per cent to close at C$45.80 on the Toronto Stock Exchange, just under the $46 per unit offered.

Chief executive David Werklund has been described as a self-made man and in many ways personifies the Alberta dream of the rugged individualist who succeeds through hard work. He left school after Grade 9, beginning work in the oilpatch as a teenager and eventually started his own oil services operation.

In 2005, he was named Ernst and Young‘s Canadian entrepreneur of the year, lauded for the 20 years of “innovative ideas and drive‘‘ that built CCS into the largest oilfield waste management company in Canada. The trust also has holdings in the United States.

Werklund said Friday that the move towards privatizing CCS was not driven by federal Finance Minister Jim Flaherty‘s Halloween announcement that trusts would lose their tax-free status by 2011 _ a controversial policy flip that drove down the value of income trusts.

“It wasn‘t the major factor at all in our decision,‘‘ said Werklund, who has been at the helm since launching Calgary-based CCS in 1984. The operation went public in 1993 and converted to trust status in 2002.

Werklund, 61, who would retain his senior titles in the new organization and become the major shareholder with 27 per cent interest, said the management‘s responsibility is to capture value for unitholders.

.“We‘ve evaluated through this process, wrestled with it and it‘s about creating value,‘‘ he said. “This is the vehicle, the structure, that we‘re comfortable with.‘‘

Werklund, whose partners include Goldman Sachs Capital Partners, CAI Capital Partners and several other investment firms, said negotiations have been ongoing for six months.

But CCS has been hit like other energy-sector trusts over the last seven months. Higher oil prices and reduced drilling cut its profits in the quarter following the Oct. 31 bombshell to $25.7 million from $29.2 million a year earlier.

“It‘s hard to know where these things would have been valued had there not been a Halloween announcement,‘‘ said Gordon Tait of BMO Financial. “It could have been trading 20 per cent higher _ in which case they might not‘‘ be looking at going private.

The $46 per unit proposal, which received unanimous approval from the CCS board of directors before being made public Friday, offers a 21.4 per cent premium over Thursday‘s closing unit price before the announcement.

It‘s conditional on receiving unitholder approval..

Although CCS is the first energy services trust to look at reverting to corporate status since Flaherty‘s plan was revealed, Tait expects that‘s the route most trusts will follow long before the 2011 deadline.

“We expect that more of these will disappear because many of them are good, cash-flow generating businesses,‘‘ he said. “It‘s just a lot more tax-efficient for private equity to own them than for public unitholders.‘‘

Still, industry analysts say CCS is better positioned than other energy trusts to increase value because its business has more diversified components, which allows it better weather downturns in the cyclical oilpatch. And that may push the price higher.

CCS provides a wide range of waste-treatment, marketing and other services to oil and gas companies in Canada and the U.S. It has almost 3,000 employees and expects to make no staff changes if the deal is completed.

PIN/Oilweek.Com