Rally Energy Corp. - s. 13.1 of NI 51-102

Headnote

Issuer that is listed on the Regulated Unofficial Market of the Frankfurt Stock Exchange ordered not to be excluded from definition of "venture issuer" under National Instrument 51-102 Continuous Disclosure Obligations solely due to those listings.

Rules Cited

Section 13.1(1) of National Instrument 51-102.

IN THE MATTER OF

THE SECURITIES ACT

(R.S.O. 1990, c. S.5, AS AMENDED)

AND

NATIONAL INSTRUMENT 5I-102

CONTINUOUS DISCLOSURE OBLIGATIONS

(NI 5I-102)

AND

IN THE MATTER OF

RALLY ENERGY CORP.

EXEMPTION

(Section 13.1 of NI 51-102)

UPON the application of Rally Energy Corp. (the "Corporation") to the Director for an order under Section 13.1 of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102") that the listing of the Corporation on the Regulated Unofficial Market of the Frankfurt Stock Exchange shall not cause the Corporation to be excluded from the definition of "venture issuer" solely due to such listing;

AND UPON considering the application and the recommendation of the staff of the Ontario Securities Commission;

AND UPON the Corporation having represented to the Director as follows:

1. The Corporation is a company governed by the Business Corporations Act (Ontario). Its head office is located in Calgary, Alberta and its registered office is located in Toronto, Ontario.

2. The Corporation is a reporting issuer under the Securities Act (Alberta) (the "Alberta Act") the Securities Act (British Columbia) (the "B.C. Act"), the Securities Act (Ontario) (the "Ontario Act") and the Securities Act (Nova Scotia) (the "Nova Scotia Act") and is not in default of any requirement of the Alberta Act, the B.C. Act, the Ontario Act or the Nova Scotia Act or the rules and regulations pertaining to those acts.

3. The Corporation's common shares are listed on the TSX Venture Exchange under the trading symbol RAL and began trading on the Freiverkehr der FWB Frankfurter Wertpapierbörse (the regulated unofficial market of the Frankfurt Stock Exchange) (the "Regulated Unofficial Market") under the symbol REL on September 8, 2003.

4. The Corporation is not the subject of any enforcement actions by the Alberta, British Columbia, Ontario or Nova Scotia Securities Commissions or by the TSX Venture Exchange or the Regulated Unofficial Market.

5. A "venture issuer" is defined by NI 51-102 as a reporting issuer that, as at the applicable time, did not have any of its securities listed or quoted on any of the Toronto Stock Exchange, a U.S. marketplace or a marketplace outside of Canada and the United States of America.

6. The Corporation does not fall within the definition of venture issuer solely due to the fact that its shares are included on the Regulated Unofficial Market.

7. In all other respects the Corporation falls within the definition of venture issuer as provided by NI 51-102.

8. The Regulated Unofficial Market does not have any ongoing disclosure requirements, nor any minimum listing requirements, nor any maintenance requirements.

9. No securities of the Corporation are listed or quoted on any marketplace as that term is defined in NI 51-102, other than the Regulated Unofficial Market and the TSX Venture Exchange.

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest.

IT IS THE DECISION of the Director, under Section 13.1 of NI 51-102 that the requirement in the definition of venture issuer in NI 51-102, that an issuer not, at the relevant time, have any of its securities listed or quoted on a marketplace outside of Canada and the United States of America, does not apply to the Corporation for so long as securities of the Corporation are only listed or quoted on the Regulated Unofficial Market of the Frankfurt Stock Exchange and not on any other marketplace outside of Canada and the United States of America.

May 14, 2004.

"Charlie MacCready"