Securities Law & Instruments

Headnote

Subsection 1(11)(b) -- Order that the issuer is a reporting issuer for the purposes of Ontario securities law -- Issuer already a reporting issuer in British Columbia -- Issuer's securities listed for trading on the TSX venture exchange -- Continuous disclosure requirements in British Columbia substantially the same as those in Ontario -- Issuer has a significant connection to Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(11)(b).

IN THE MATTER OF

THE SECURITIES ACT,

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

(the Act)

AND

IN THE MATTER OF

ADIRA ENERGY LTD.

ORDER

(clause 1(11)(b))

UPON the application of Adira Energy Ltd. (the Applicant) to the Ontario Securities Commission (the Commission) for an order pursuant to clause 1(11)(b) of the Act that, for the purposes of Ontario securities law, the Applicant is a reporting issuer in Ontario;

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

AND UPON the Applicant representing to the Commission as follows:

1. The Applicant was originally incorporated on February 20, 1997 under the name "Trans New Zealand Oil Company" by filing its Articles of Incorporation with the Secretary of State of Nevada. The Applicant changed its name to "AMG Oil Ltd." on July 27, 1998. On November 25, 2008, the Applicant's shareholders approved the change of the jurisdiction of AMG from the State of Nevada to the CBCA by way of continuation. The Applicant completed the filing of its Articles of Conversion with the Nevada Secretary of State on November 25, 2008, and the Applicant's Articles of Continuance were accepted for filing by Industry Canada effective November 27, 2008. The effect of these filings was to transfer the jurisdiction of incorporation of the Applicant from the State of Nevada to the Canada Business Corporations Act. On December 17, 2009 articles of amendment were filed to change the Applicant's name from "AMG Oil Ltd." to "Adira Energy Ltd.".

2. The Applicant's registered and head office is currently located at 120 Adelaide St. West, Suite 1204, Toronto, Ontario, Canada, M5H 1T1.

3. As of the date hereof, the Applicant's authorized share capital consists of an unlimited number of Common Shares (the Common Shares) with no par value. As of the date hereof, there are 62,640,001 Common Shares issued and outstanding. There are 27,500,000 subscription receipts outstanding which are exercisable upon fulfilment of certain conditions, including the listing of the Applicant on the TSX Venture Exchange (TSXV). Each subscription receipt is exercisable for one Common Share and one half of one Common Share purchase warrant. The Applicant currently has 5,659,000 options exercisable for Common Shares and 4,500,770 Common Share purchase warrants outstanding and expects to issue another 1,285,500 Common Share purchase warrants in connection with the issuance of the subscription receipts.

4. The Applicant is currently a reporting issuer in British Columbia and has been a reporting issuer under the Securities Act (British Columbia) (the BC Act) since February 1, 2006. As at the date hereof, the Applicant is not in default of any requirements under applicable securities laws.

5. The Applicant is not currently a reporting issuer or the equivalent in any jurisdiction in Canada other than British Columbia.

6. As of the date hereof, the Applicant is not on the list of defaulting reporting issuers maintained pursuant to the BC Act and, to the best of its knowledge, is not in default of any of its obligations under the BC Act or the rules and regulations made thereunder.

7. The continuous disclosure document requirements of the BC Act are substantially the same as the continuous disclosure requirements under the Act.

8. The continuous disclosure materials filed by the Applicant under the BC Act are available on the System for Electronic Document Analysis and Retrieval (SEDAR), with February 6, 2006 being the date of the first electronic filing on SEDAR by the Applicant.

9. The Common Shares are listed and posted for trading on the OTCBB, where they trade under the stock symbol "AMGOF", and the FWB Frankfurter Wertpapierbörse where they trade under the stock symbol "AORLB8". The Common Shares are listed and posted for trading on the TSXV under the trading symbol "ADL". The Common Shares are not traded on any other stock exchange or trading quotation system.

10. The Applicant is not in default of any of the rules, regulations or policies of the TSXV.

11. Pursuant to the policies of the TSXV, a listed issuer, which is not otherwise a reporting issuer in Ontario, must assess whether it has a "significant connection to Ontario", as defined in the policies of the TSXV, and, upon becoming aware that it has a "significant connection to Ontario", promptly make a bona fide application to the Commission to be deemed a reporting issuer in Ontario.

12. Pursuant to the policies of the TSXV, the Applicant has undertaken an assessment of its shareholder base to determine whether or not the Applicant has a significant connection to Ontario as defined in the policies of the TSXV. As a result of that assessment, the Applicant has determined that the Applicant has come to have a significant connection to Ontario in that more than 78% of the Applicant's issued and outstanding Common Shares are held directly or indirectly by residents of Ontario and its head office is located in Ontario.

13. Neither the Applicant, nor any of its officers, directors, nor, to the knowledge of the Applicant or its officers and directors, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, has:

(a) been the subject of any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority;

(b) entered into a settlement agreement with a Canadian securities regulatory authority; or

(c) been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision,

other than:

in the case of Colin Kinley where an out of court settlement agreement was entered into and all charges were denied and dropped. Claims were made by Layne Christensen Company and Layne Energy against Manx Drilling; Saber Energy Corp; Saber Energy Inc; Tau Capital of Toronto; Warren Newfield; Colin Kinley and Andrew MacEwen for, amongst other things, claiming a breach of fiduciary duty. The case was brought before the District Court of Johnson County, Kansas and as part of a settlement a stipulation and order for dismissal was signed by all parties and the court on September 15, 2009. The Court ordered the case dismissed with prejudice; and

in the case of Ilan Diamond, who joined the board of directors of a private company Dina Glassware (Pty) Ltd. (South Africa) that was in distress in May, 2005. The business had grown from a small profitable distribution business that supplied goods predominantly to the catering industry into a larger business supplying household goods to retail chains. Rapid expansion had led to inadequate credit cycle management and difficulties meeting scheduled deliveries to purchasers throughout South Africa and five adjacent countries. Mr. Diamond spent 20 months with the company attempting to remedy its problems and refocus the company's target market. Finally, with the failure of one of the company's largest customers resulting in additional cash flow issues, the board of directors ultimately determined the company should make a voluntary liquidation application. Such application was filed in February of 2007.

14. Neither the Applicant, nor any of its officers, directors, nor to the knowledge of the Applicant and its officers and directors, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, is or has been subject to:

(a) any known ongoing or concluded investigations:

(i) by a Canadian securities regulatory authority, or

(ii) a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or

(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

15. Neither any of the officers or directors of the Applicant, nor, to the knowledge of the Applicant and its officers and directors, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, is or has been at the time of such event an officer or director of any other issuer which is or has been subject to: (i) any cease trade order or similar order, or order that denied access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, within the preceding 10 years; or (ii) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee within the preceding 10 years.

AND UPON the Commission being satisfied that granting this Order would not be prejudicial to the public interest;

IT IS ORDERED pursuant to clause 1(11)(b) of the Act that the Applicant is a reporting issuer for the purposes of Ontario securities law.

DATED this 13th day of December, 2010.

"Jo-Anne Matear"
Assistant Manager, Corporate Finance
Ontario Securities Commission