Proceedings

IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF
MACDONALD OIL EXPLORATION LTD., FRANK C. SMEENK, MARIO A. MIRANDA,ALLAN C. KENT and CUBACAN EXPLORATION INC.

STATEMENT OF ALLEGATIONS OF STAFF OF THE ONTARIO SECURITIES COMMISSION

Staff of the Ontario Securities Commission ("Staff") make the following allegations:

1. MacDonald Oil Exploration Ltd. ("MacDonald Oil") is a reporting issuer whosesecurities are traded in Ontario.

2. MacDonald Oil was required, by subsection 78(1) of the Act, to file with theCommission its annual audited financial statements for the year ending August 31,1999, on or before January 18, 2000. MacDonald Oil failed to file those statementsas required.

3. Each of Frank C. Smeenk, Mario A. Miranda and Allan C. Kent ("the individualrespondents") is an officer and/or director of MacDonald Oil.

4. Each of the individual respondents, and Cubacan Exploration Inc., is an insider ofMacDonald Oil.

5. By virtue of his or its position as an officer, director and/or insider, each of therespondents has, or has access to, information with respect to the affairs ofMacDonald Oil, which information ought to have been generally disclosed but whichhas not.

6. It is therefore in the public interest that trading in shares of MacDonald Oil ceasepending compliance with the obligation to file audited financial statements.Alternatively, it is in the public interest that trading in shares of MacDonald Oil byany of the individual respondents or by Cubacan Exploration Inc. cease pendingcompliance.