Securities Law & Instruments

Headnote

Exemption from National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities -- Exemption granted on basis of unique nature of issuer's reporting issuer status and de minimus connection to Ontario.

Rules Cited

National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED

AND

IN THE MATTER OF

NATIONAL INSTRUMENT 51-101 -- STANDARDS OF DISCLOSURE FOR OIL AND GAS ACTIVITIES ("NI 51-101")

AND

IN THE MATTER OF

BURLINGTON RESOURCES INC.

 

ORDER

(Part 8.1 NI 51-101)

UPON the application of Burlington Resources Inc. ("BR") to the Director of the Ontario Securities Commission (the "Director") for an exemption from NI 51-101 under section 8.1 of NI 51-101;

AND UPON considering the application and staff's recommendation to the Director;

AND UPON BR representing to the Director that:

1. BR is a holding company engaged through its subsidiaries in the exploration for and development, production and marketing of crude oil, natural gas liquids and natural gas in the United States, Canada and internationally. It was incorporated in the State of Delaware and its head office is located in Houston, Texas. BR is subject to the United States Securities Exchange Act of 1934, as amended (the "Exchange Act").

2. BR's common shares are listed on the New York Stock Exchange and trade under the symbol "BR" (the "BR Shares"). As at June 30, 2003, BR had outstanding 200,710,143 BR Shares representing a market capitalization of approximately U.S. $10.9 billion (using the June 30, 2003 closing price on the New York Stock Exchange of U.S. $54.07), long-term debt of U.S. $3,867 million and an enterprise value of approximately U.S. $14.7 billion.

3. In connection with BR's acquisition of Canadian Hunter Exploration Ltd. in December 2001, BR undertook to the Minister of Industry to seek listing of the BR Shares on the Toronto Stock Exchange (the "TSX"). The undertaking was subject to obtaining securities commission and other necessary regulatory approvals, and subject to Rules 51-5A and 51-5B of the Securities Act (Ontario) remaining in full force and effect or if replaced, replaced with similar rules. These rules allow BR to be listed on the TSX using its U.S. financial statements and other U.S. reporting documents. BR gave this undertaking in the context of the negotiations with staff of Investment Canada upon staff's suggestion that this undertaking would assist them in determining that the proposed investment would constitute a "net benefit to Canada" given the loss of the Canadian Hunter Exploration Ltd. listing on the TSX.

4. On September 20, 2002 the BR Shares began trading on the TSX under the symbol "B" and, as a result, BR became a reporting issuer in Ontario.

5. For the period October 1, 2002 to October 1, 2003, an aggregate of 433,322,100 BR Shares have traded on the New York Stock Exchange and 582,925 BR Shares have traded on the TSX. The average daily trading for this period on the New York Stock Exchange was 1,712,736 BR Shares and on the TSX was 2,481 BR Shares for this period. The trading on the TSX represents approximately 0.14% of the total and daily trading of BR Shares during this period.

6. Since becoming a reporting issuer, BR has not issued securities in Ontario other than the grant of 7,000 stock options to Mr. Robert Harding, an outside director of BR. BR has no employees in Ontario. BR does not currently intend to issue treasury shares in Ontario other than in connection with the exercise of stock options.

7. A search of registered holders conducted on October 7, 2003 by EquiServe Trust Company, N.A., BR's transfer agent, indicated that there were 86 registered holders with addresses in Ontario holding 15,819 BR Shares or approximately 0.008% of the outstanding BR Shares. A search of beneficial holders conducted on October 21, 2003 by ADP Investor Communications indicated that 1,092 beneficial holders with addresses in Ontario holding 632,706 BR Shares or approximately 0.3% of the outstanding BR Shares.

AND WHEREAS the Director is satisfied that to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED under Section 8.1 of NI 51-101 that BR is exempt from NI 51-101 for so long as:

1. less than 10% of the number of registered and beneficial holders of BR Shares are resident in Ontario;

2. less than 10% of the outstanding BR Shares are held by residents of Ontario; and

3. BR is subject to and complies with the disclosure requirements of the Exchange Act and the New York Stock Exchange in connection with its oil and gas activities.

January 6, 2004.

"Iva Vranic"