Units in High Arctic Energy Services Trust began trading on the Toronto Stock Exchange Thursday following completion of an initial public offering.

The income trust was created from Red Deer-based High Arctic Energy Services Inc. Trading under the symbol HWO.UN, its units entered the market at $11.50 and closed yesterday at $11.51.

Jed Wood, High Arctic's president and CEO, said he couldn't elaborate on the conversion of High Arctic into an income trust. But in a news release issued by High Arctic, he expressed satisfaction with the results of the IPO.

The release indicated that 8,996,572 trust units were issued at an initial price of $10.00. Proceeds were to be used to reduce debt, purchase capital equipment and generate working capital. The release also said the initial cash distribution to High Arctic unitholders for the period July 21 to Aug. 31 is expected to be 11.85 cents, with monthly distributions thereafter about 8.75 cents per unit.

Derek Michnik, an investment adviser with RBC Dominion Securities in Red Deer, said the new income trust was generating substantial local interest. "Whenever there is a new issue income trust that is well publicized we'll get some calls on it, but by far and away I've gotten the most calls so far on High Arctic because it's a local company with local people."

Michnik added that the continuing strength of the oil and gas sector was likely also contributing to the interest in High Arctic.

High Arctic provides oilfield equipment and services, including drilling, completion and workover operations. Founded by Wood in 1993, its headquarters are at 8133 Edgar Industrial Close,

High Arctic operates in Alberta, British Columbia and the Northwest Territories, and it is also currently active in Argentina, Saudi Arabia, Oman, United Arab Emirates, Yemen, Tanzania, Thailand and Turkmenistan.

Income trusts have become a popular alternative to public corporations on the stock market. Instead of issuing dividends, they make regular payments to unitholders from cash flow, which are taxed in the hands of the unitholders instead of the corporation.