Mullen Group cuts jobs citing energy sector uncertainty

The Mullen Group Income Fund, which provides transportation services to the oil and natural gas sector, said Friday thatit has laid off up to 100 employees due to energy industry uncertainty in western Canada.

The Calgary-based income fund said the layoffs, which occurred at several of its business units, are temporary.

The number of oil drilling rigs working in Alberta is in decline, the Fund said, while natural gas activity has been off for the past year due to lower prices.

"However, many of our oil and gas customers have made it clear that they intend on reducing their capital investments in Alberta if the recently announced oil and gas royalty proposal...is implemented," said Murray Mullen, the fund's chairman and CEO.

"And in fact we have already seen demand for our services decline since the September 18, 2007 announcement," he said.

The controversial royalty proposal recommended a 20 per cent hike in rates.

The proposal set off a frenzy of criticism from businesses operating in the province's energy sector, with several saying they would pull investment money out of the province if the recommendations were implemented.

Mullen said he hoped Alberta Premier Ed Stelmach and the members of the provincial legislature would balance the province's need for more royalty income with the need to continue attracting investment to the sector.

"If they find the right balance these lay-offs may only be temporary and we can get our employees back to work," Mullen added.

Units of Mullen Group finished down 26 cents at $18.35 on the TSX on Friday.