CALGARY — Like its income trust brethren, the Mullen Group says changes to the federal tax rules for such companies depressed the carrier’s latest returns, despite a generally buoyant western market.

Mullen says its problems are further exacerbated by changes to Alberta’s royalty regime and lower natural gas prices.

For the fourth quarter of 2007, the carrier — one of Canada’s five largest — reported an intangible asset impairment of $25 million, resulting in a net loss of $118.7 million compared to income of $128.1 million in 2006.

However, overall, the company still generated consolidated revenues of $1.1 billion, an increase of 11.6 percent over the $1 billion in 2006.

Mullen says the annual increase was primarily attributable to the full year’s inclusion of Kleysen Group and Brady Oilfield Services L.P. and strong performances by the Production Services, Specialized Services, and Drilling Services groups.

Those operations offset decreases in the Drilling Related Services group as a result of lower drilling activity in Canada, says the company.

“The real story of 2007 was the strength of our diversified business model. The significant loss in revenue and operating income experienced by our Drilling Related Services group by virtue of the significant decline in drilling activity was more than offset through increases in our other businesses,” said Stephen H. Lockwood, president & co-CEO.

“We are however, very disappointed with the $275 million impairment of goodwill and intangible assets that was recognized. A number of factors came together to create this situation, including the new SIFT legislation, new royalty regime in Alberta, and depressed natural gas prices, and it is an issue that we are not happy about.”