Securities Law & Instruments

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption from the requirements of Paragraph 2.2(d) of National Instrument 44-101 Short Form Prospectus Distributions requiring an issuer to have current annual financial statements and a current AIF in order to be eligible to file a short form prospectus.

Applicable Legislative Provisions

National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.2(d), 8.1.

Citation: Re Boulder Energy Ltd., 2015 ABASC 913

October 27, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (THE JURISDICTIONS) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF BOULDER ENERGY LTD. (THE FILER)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision (the Exemption Sought) under the securities legislation of the Jurisdictions (the Legislation) exempting the Filer from paragraph 2.2(d) of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101 or the Instrument), which would require the Filer to have current annual financial statements and a current AIF to be qualified to file a prospectus in the form of a short form prospectus as contemplated in the Instrument (a Short Form Prospectus).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this application;

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 or NI 44-101 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation incorporated under the Business Corporations Act (Alberta).

2. The Filer's head office is located in Calgary, Alberta.

3. Upon completion of a plan of arrangement under the provisions of the Business Corporations Act (Alberta) (the Arrangement) on 15 May 2015 involving DeeThree Exploration Ltd. (DeeThree) (now called Granite Oil Corp.) and the Filer, the Filer became a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

4. The Filer is not in default of securities legislation in any jurisdiction.

5. The Filer's common shares (Boulder Shares) are listed and posted for trading on the Toronto Stock Exchange under the symbol "BXO".

6. Pursuant to the Arrangement, among other things, the Filer acquired DeeThree's oil and gas assets located in west central and northern Alberta (together the Acquired Assets), and Holders of DeeThree common shares (DeeThree Shareholders) received half of a Boulder Share for every common share of DeeThree held.

7. Pursuant to National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), DeeThree prepared and mailed a management information circular dated effective 9 April 2015 (the Circular) to the DeeThree Shareholders in connection with seeking shareholder approval of the Arrangement. Section 14.2 of Form 51-102F5 Information Circular required DeeThree to include in the Circular disclosure regarding, among other things, the Filer, according to the form of prospectus that the Filer would have been eligible to use immediately prior to the sending and filing of the Circular, which was Form 41-101F1 Information Required in a Prospectus. The Circular was filed on the Filer's SEDAR profile on 22 May 2015, and included full, true and plain disclosure of all material facts related to the Filer and the Acquired Assets.

8. The Filer is not required to file annual financial statements nor an AIF pursuant to NI 51-102 until 30 March 2016. As a result, the Filer does not have current annual financial statements or a current AIF. Consequently, the Filer does not meet paragraph 2.2(d) of NI 44-101 and is therefore not eligible under section 2.2 of NI 44-101 to file a Short Form Prospectus.

9. The Filer is not eligible for the exemption for successor issuers under subsection 2.7(2) of NI 44-101 because the Acquired Assets were only a portion of DeeThree's business.

10. Subsection 2.7(1) of NI 44-101 provides, among other things, that paragraph 2.2(d) of the Instrument does not apply to an issuer if the issuer is not exempt from the requirement in the applicable CD rule to file annual financial statements within a prescribed period after its financial year end, but the issuer has not yet been required under the applicable CD rule to file any annual financial statements, and the issuer has filed and obtained a receipt for a final prospectus that included the issuer's or each predecessor entity's comparative annual financial statements for its most recently completed financial year (the Previously Filed Prospectus Exemption).

11. The Filer is not eligible for the Previously Filed Prospectus Exemption because it has not filed a prospectus.

12. Absent the Exemption Sought, the Filer is not eligible to file a Short Form Prospectus.

13. Section 2.1 of Companion Policy 44-101CP to National Instrument 44-101 Short Form Prospectus Distributions indicates that the rationale underlying the Previously Filed Prospectus Exemption is that the prospectus filed included the disclosure that would have been in current annual financial statements and a current AIF.

14. The disclosure in the Circular included substantively all the disclosure that would have been in current annual financial statements and a current AIF for the Filer.

Decision

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:

(a) the Filer is not exempt from the requirement under NI 51-102 to file annual financial statements and an AIF within the prescribed periods after its financial year ended 31 December 2015;

(b) the Filer has not yet been required under NI 51-102 to file annual financial statements or an AIF; and

(c) until the Filer has filed in respect of its financial year ended 31 December 2015 annual financial statements and an AIF, or until 30 March 2016, whichever occurs first, the Filer incorporates by reference into any Short Form Prospectus the portions of the Circular that are in respect of the Filer, namely Schedules E, F, H, I and J.

"Denise Weeres"
Manager, Legal
Corporate Finance