Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- relief from the requirements to include three years of audited financial statements in an information circular for a business that constitutes a significant acquisition and to include three years of audited financial statements in an information circular in respect of a business for which securities are being distributed in connection with a business combination, provided that acceptable alternative disclosure is provided.

Applicable Rules

National Instrument 44-101 Short Form Prospectus Distributions.

National Instrument 51-102 Continuous Disclosure Obligations.

CSA Staff Notice 42-303 Prospectus Requirements.

Citation: Mission Oil & Gas Inc. and Bison Resources Ltd., 2005 ABASC 930

November 24, 2005

In the Matter of

the Securities Legislation

of Alberta and Ontario (the "Jurisdictions")

and

In the Matter of

the Mutual Reliance Review System

for Exemptive Relief Applications

and

In the Matter of

Mission Oil and Gas Inc. ("Mission")

and Bison Resources Ltd. ("Bison")

 

MRRS Decision Document

Background

1. The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from Mission and Bison for a decision under the securities legislation of the Jurisdictions (the "Legislation") that:

1.1 in Alberta, Bison be exempt from the requirements of the Legislation to include three years of audited financial statements in an information circular in respect of a significant acquisition and to include three years of audited financial statements in an information circular in respect of a business for which securities are being distributed in connection with a business combination;

1.2 in Alberta and Ontario, Mission be exempt from the requirements of the Legislation to include three years of audited financial statements in an information circular in respect of a significant acquisition and to include three years of audited financial statements in an information circular in respect of a business for which securities are being distributed in connection with a business combination;

the relief applied for above being hereinafter referred to as the "Requested Relief".

Application of Principal Regulator System

2. Under Multilateral Instrument 11-101 Principal Regulator System ("MI 11-101") and the Mutual Reliance Review System for Exemption Relief Applications:

2.1 the Alberta Securities Commission is the principal regulator for each of Mission and Bison;

2.2 Bison is relying on the exemption in Part 3 of MI 11-101 in British Columbia;

2.3 Mission is relying on the exemption in Part 3 of MI 11-101 in each of British Columbia, Saskatchewan, Québec, New Brunswick, Nova Scotia, Newfoundland and Labrador; and

2.4 this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

3. Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are otherwise defined in this decision.

Representations

4. This decision is based on the following facts represented by each of Mission and Bison:

4.1 Mission was incorporated under the laws of the Province of Alberta and Mission's head office is located in Calgary, Alberta;

4.2 The common shares of Mission are listed and posted for trading on the Toronto Stock Exchange under the trading symbol "MSO";

4.3 Mission is a reporting issuer in the provinces of Alberta, British Columbia, Saskatchewan, Ontario, Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador and has been a reporting issuer in at least one of these jurisdictions since on or about January 7, 2005;

4.4 To its knowledge, Mission is not in default of any of its obligations as a reporting issuer pursuant to the applicable securities legislation in any of the provinces in which it is a reporting issuer;

4.5 Bison was incorporated under the laws of the Province of Alberta and Bison's head office is located in Calgary, Alberta;

4.6 The common shares of Bison are listed and posted for trading on the TSX Venture Exchange under the trading symbol "BIS";

4.7 Bison is a reporting issuer in the provinces of Alberta and British Columbia and has been a reporting issuer in at least one of these jurisdictions since on or about September 12, 1997;

4.8 To its knowledge, Bison is not in default of any of its obligations as a reporting issuer pursuant to the applicable securities legislation in any of the provinces in which it is a reporting issuer;

4.9 Mission and Bison are entering into a plan of arrangement (the "Arrangement") whereby Mission will be acquiring all of the issued and outstanding common shares of Bison;

4.10 As part of the Arrangement, cash, common shares or a combination of both will be issued by Mission to securityholders of Bison;

4.11 During its current financial year, Mission acquired certain oil and gas assets from StarPoint Energy Ltd. pursuant to a plan of arrangement (the "StarPoint Assets") and acquired certain other oil and gas assets from a third party (the "Other Assets");

4.12 Each of the acquisition of the StarPoint Assets (the "StarPoint Acquisition") and the acquisition of the Other Assets (the "Other Acquisition") by Mission constitute a "significant acquisition" under the Legislation for Mission;

4.13 Bison is preparing an information circular (the "Bison Information Circular") in connection with a special meeting of its securityholders which is expected to be held on January 5, 2006;

4.14 Mission is preparing an information circular (the "Mission Information Circular") in connection with a special meeting of its securityholders which is expect to be held on December 22, 2005;

4.15 The Bison Information Circular will contain, among other things, prospectus level disclosure of the business and affairs of each of Mission and Bison and the particulars of the Arrangement, as well as fairness opinions of independent financial advisors;

4.16 The Mission Information Circular will incorporate by reference the disclosure contained in the Bison Information Circular and will therefore contain, among other things, prospectus level disclosure of the business and affairs of each of Mission and Bison and the particulars of the Arrangement, as well as fairness opinions of independent financial advisors;

4.17 Pursuant to section 14.2 of Form 51-102F5, because each of the StarPoint Acquisition and the Other Acquisition constitute a "significant acquisition", Bison and Mission are required to include certain annual and interim financial statement disclosure in the Bison Information Circular and Mission Information Circular in respect of the Arrangement, including annual financial statements for each of the three most recently completed financial years of the StarPoint Assets and the Other Assets (the "Mission Disclosure Requirements");

4.18 Pursuant to Canadian Securities Administrators ("CSA") Staff Notice 42-303 (the "Staff Notice"), an issuer may submit an application to the provincial and territorial securities regulatory authorities requesting relief from certain requirements of the prospectus rules that are not consistent with National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102");

4.19 Pursuant to the Staff Notice, the CSA have indicated that they are prepared to recommend that the relief be granted from the significance tests for determining if a business acquisition is significant and the financial statements required to be included in a prospectus on the condition that the issuer applies the significance tests set out in section 8.3 of NI 51-102 and provides the financial statements specified in section 8.5 of NI 51-102;

4.20 The financial statement requirements set forth in section 8.5 of NI 51-102 reference the financial statements described in section 8.4 of NI 51-102. Section 8.10 of NI 51-102 does, however, provide exemptions from certain of the financial statement disclosure requirements set forth in section 8.4 where the acquisition is of an interest in an oil and gas property and the requirements of section 8.10 are met. As a result, an issuer relying on exemptive relief under the Staff Notice may, if they are able to rely on the exemptions contained in section 8.10, provide the alternative disclosure allowed under section 8.10, where applicable, instead of the financial statements set forth in section 8.4;

4.21 The StarPoint Assets and the Other Assets are interests in oil and gas properties, financial statements do not exist for the StarPoint Assets and the Other Assets, neither of the StarPoint Acquisition or the Other Acquisition constitute a reverse take-over, the StarPoint Assets and the Other Assets did not constitute a "reportable segment" of the vendor immediately prior to the completion of each of the StarPoint Acquisition and the Other Acquisition and the disclosure required in a business acquisition report (as defined in NI 51-102) for each of the StarPoint Assets and the Other Assets will be included in the Bison Information Circular and the Mission Information Circular containing the disclosure required therein;

4.22 Bison proposes to include in the Bison Information Circular and Mission proposes to include in the Mission Information Circular certain annual financial information, including audited operating statements for the three years ended December 31, 2004, 2003 and 2002, in accordance with sections 8.5 and 8.10(e) and (f) of NI 51-102 in respect of the StarPoint Acquisition and the Other Acquisition (the "Alternative Mission Financial Disclosure"); and

4.23 The Alternative Mission Financial Disclosure will comply with National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency.

Decision

The Decision Makers being satisfied that they each have jurisdiction to make this decision and that the relevant test contained under the Legislation has been met, the Requested Relief is granted and the Mission Disclosure Requirements shall not apply to Bison and Mission, provided that Bison include the Alternative Mission Financial Disclosure in the Bison Information Circular and Mission include the Alternative Mission Financial Disclosure in the Mission Information Circular.

"Mavis Legg", CA
Manager, Corporate Finance