Securities Law & Instruments


Headnote

Filer granted permission from the Director, pursuant to s. 38(3) of the Securities Act (Ontario), to make listing representations in its non-offering prospectus to the effect that application has been made to admit the filer's secured notes to listing on the Official List of the Luxembourg Stock Exchange and to trade on the Euro MTF Market.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., s. 38(3).

September 30, 2016

Norton Rose Fulbright Canada LLP
200 Bay Street, Suite 3800
Royal Bank Plaza, South Tower
Toronto, Ontario
M5J 2Z4

Attention: Ms. Jenny Yoo

Re:         Pacific Exploration & Production Corporation

Application for Permission to Make a Listing Representation

Further to your letter submitted on behalf of Pacific Exploration & Production Corporation (the Corporation) dated September 16, 2016 (the Application), we understand that:

1.             The Corporation is incorporated in the province of British Columbia under the Business Corporations Act (British Columbia) with corporation number BC0989606.

2.             The common shares of the Corporation were listed on the Toronto Stock Exchange (TSX) under stock symbol PRE until May 25, 2016, on which date the common shares were delisted. The Corporation remains listed on the Colombia stock exchange (La Bolsa de Valores de Colombia) under the stock symbol PREC.

3.             The Corporation is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland (collectively, the Reporting Jurisdictions).

4.             The Corporation is undertaking a restructuring of certain of its financial obligations (the Restructuring Transaction) pursuant to a proceeding under the Companies’ Creditors Arrangement Act (the CCAA), together with the proceedings in Columbia under Ley 1116 of 2006 and in the United States under chapter 15 of title 11 of the United States Code. The Restructuring Transaction was announced on April 19, 2016.

5.             A meeting of creditors (the Affected Creditors) affected by the Corporation’s plan of compromise and arrangement dated June 27, 2016 (as amended) made pursuant to the CCAA was held on August 17, 2016 whereby the Restructuring Transaction was approved by 98.4% in number with 97.2% in value in favour of the Affected Creditors present in person or represented by proxy.

6.             The Restructuring Transaction is expected to close during the first half of October 2016, provided that all conditions to the Restructuring Transaction are satisfied.

7.             As part of the Restructuring Transaction, U.S. $250 million in principal amount of debtor-in-possession notes (the DIP Notes) were issued. In accordance with the terms of the Restructuring Transaction, the DIP Notes will be amended and restated as exit notes in an aggregate principal amount of U.S. $250 million (the Exit Notes).

8.             It is expected that the Corporation will be issuing a U.S. non-offering prospectus (the Prospectus) in connection with its application to list the Exit Notes on the Luxembourg Stock Exchange.

9.             The Prospectus will contain representations identical or substantially similar to the following (the Listing Representations):

a.             “Application has been made by Pacific Exploration & Production Corporation, formerly known as Pacific Rubiales Energy Corp., a company amalgamated in the Province of British Columbia, Canada, or the “Issuer,” to list its U.S.$250,000,000 10.0% senior secured notes due 2021 (the “Notes”) on the official list of the Luxembourg Stock Exchange and to be admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange”;

b.             “Application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to be admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange”; and

c.             “Application has been made to admit the Notes to listing on the Official List of the Luxembourg Stock Exchange and to trade on the Euro MTF Market”.

10.          While discussions have commenced with the Luxembourg Stock Exchange regarding the listing of the Exit Notes, no approval has yet been received for such listing, conditional or otherwise, nor has the Luxembourg Stock Exchange consented to, or indicated that they do not object to, the Listing Representations.

11.          It is contemplated that the Prospectus may be provided to holders of the DIP Notes in connection with the amendment and restatement of the DIP Notes into Exit Notes. As the DIP Notes are trading, it is possible that the DIP Notes may be held by persons in the Reporting Jurisdictions in which case such persons may receive the Prospectus in relation to conversion of the DIP Notes into Exit Notes.

12.          The Corporation seeks permission to include the Listing Representations in the Prospectus which may be provided and made available in the Reporting Jurisdictions.

Based upon the representations above and the representations contained in your Application, permission is hereby granted pursuant to subsection 38(3) of the Securities Act (Ontario) to include the Listing Representations in the Prospectus.

Yours very truly,

“Michael Balter”
Corporate Finance Branch
Ontario Securities Commission