Mutual Reliance Review System for Exemptive Relief Applications - waiver grantedpursuant to section 4.5 of National Policy Statement No. 47 to enable issuer toparticipate in the POP System when it did not meet the "public float" test in the lastcalendar month of the 1999 financial year in respect of which its Initial AIF is filedprovided that it does meet the "public float" test at a date within 60 days before thefiling of its preliminary short form prospectus - waiver reflects the revised eligibilitycriteria set out in proposed National Instrument 44-101.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am.
In the Matter of the Prompt Offering Qualification System (1997), 20 OSCB 1217.
Proposed Rule implementing proposed National Instrument 44-101 - Prompt OfferingQualification System (1998), 21 OSCB 1138.
National Policy Statement No. 47 - Prompt Offering Qualification System, ss. 4.1 and4.5.
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
SEARCH ENERGY CORP.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "DecisionMakers") in each of the provinces of British Columbia, Alberta, Manitoba, Ontario, Quebecand Nova Scotia (the "Jurisdictions") has received an application from Search EnergyCorp. (the "Filer") for a decision pursuant to section 4.5 of National Policy Statement No.47 ("NP 47") and to the securities legislation of the Jurisdictions (the "Legislation") for awaiver of the eligibility requirements found in section 4.1(2)(b)(i) of NP 47 and section 169of the Regulation Respecting Securities (Quebec) (the "Quebec Regulation") to permit theFiler to participate in the Prompt Offering Qualification System (the "POP System") as ifit were an eligible reporting issuer within the meaning of NP 47;
AND WHEREAS under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), the Alberta Securities Commission is the principal regulatorfor this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. The Filer was incorporated in 1979 as Westrex Energy Corp. ("Westrex"). Througha plan of arrangement under the Business Corporations Act (Alberta), Westrexmerged with Search Energy Inc. ("Search Inc.") on December 31, 1996, andchanged its name to Search Energy Corp. on January 2, 1997. Search Inc. therebybecame a wholly-owned subsidiary of the Filer. The Filer is registered to carry onbusiness in the provinces of Alberta and British Columbia.
2. The Filer has been a reporting issuer in Alberta since April 11, 1991;
3. The Filer's head office is located in Alberta.
4. The Filer is not in default of securities legislation in any jurisdiction.
5. The Common Shares of the Filer are listed and posted for trading on the TorontoStock Exchange under the trading symbol "SGY".
6. The Filer is authorized to issue an unlimited number of Common Shares.
7. The financial year end of the Filer is December 31.
8. As of July 10, 2000, apart from Mr. John Feigl (beneficially owning, directly orindirectly, or exercising control or direction over, 5,071,200 Common Shares, orapproximately 10.86% of the issued and outstanding Common Shares), no personbeneficially owns directly or indirectly, or exercises control or direction overCommon Shares carrying more than 10 percent of the votes attached to all of theissued and outstanding Common Shares.
9. As of June 30, 2000 there were 46,709,415 Common Shares of the Filer issued andoutstanding.
10. During the period from December 1, 1999 to December 31, 1999, the aggregatemarket value of the Equity Securities of the Filer, calculated in accordance with NP47 and the Quebec Regulation, was $59,415,431. During the period from June 1,2000 to June 30, 2000, the aggregate market value of the Equity Securities of theFiler, calculated in accordance with NP 47 and the Quebec Regulation, was$89,938,544. During the period from July 1, 2000 to July 31, 2000, the aggregatemarket value of the Equity Securities of the Filer, calculated in accordance with NP47 and the Quebec Regulation, was $89,522,162.
11. The Filer would be eligible to participate in the POP System, except that the marketvalue of its Equity Securities (as defined in NP 47), being the Common Shares notheld by John Feigl, during the last calendar month of its most recently completedfinancial year was less than $75,000,000.
12. The Filer would be eligible to participate in the POP System upon the filing andacceptance of its Initial AIF under Proposed National Instrument 44-101 whichwould replace the current calculations of the aggregate market value of an issuer'ssecurities under NP 47 with a calculation as of a date within sixty (60) days beforethe filing of the issuer's preliminary short form prospectus.
13. The Filer may wish to effect an offering prior to its financial year end and is of theview that a short form prospectus is the most appropriate vehicle for such offering;
AND WHEREAS pursuant to the System this MRRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;
THE DECISION of the Decision Makers, pursuant to the Legislation, is that theDecision Makers hereby waive the requirements of section 4.1(2)(b)(i) of NP 47 andsection 169 of the Quebec Regulation in respect of the Filer so that the Filer is eligible toparticipate in the POP System, provided that:
(i) the Filer complies with all the filing requirements and procedures and eachof the other eligibility requirements of NP 47 and the Quebec Regulation;
(ii) the aggregate market value of the equity securities of the Filer, calculatedin accordance with section 4.1(2) of NP 47 and section 169 of the QuebecRegulation is $75,000,000 or more on a date within sixty (60) days beforethe date of filing of the Filer's preliminary short form prospectus;
(iii) the eligibility certificate to be filed in respect of the Filer's initial AIF shallstate that the Filer satisfies the eligibility criteria set out in the Legislationand shall make reference to this waiver; and
(iv) this Decision terminates on the earlier of: (a) 140 days after the end of theFiler's financial year ended December 31, 2000, and (b) the date of filing arenewal AIF by the Filer in respect of its financial year ending December 31,2000.
DATED at Edmonton, Alberta on August 31st, 2000.
Agnes Lau, CA
Deputy Director, Capital Markets