Burlington Resources Canada Energy Ltd. - MRRS Decision

March 9, 2001

MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - issuer is an indirect wholly-owned subsidiary of anon-reporting issuer that is subject to the reporting requirements of the SEC. Relief granted to the issuer from therequirement to file and send to shareholders audited annual and unaudited interim financial statements, issue pressreleases, file material change reports and comply with the proxy and proxy solicitation requirements, including filing aninformation circular or report in lieu thereof, so long as certain conditions are met.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 75, 77, 78, 80(b)(iii).

IN THE MATTER OF

THE SECURITIES LEGISLATION OF THE PROVINCES OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

ONTARIO, QUÉBEC, NEW BRUNSWICK, NOVA SCOTIA AND NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

BURLINGTON RESOURCES CANADA ENERGY LTD.

(FORMERLY POCO PETROLEUMS LTD.)

MRRS DECISION DOCUMENT

1. WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of BritishColumbia, Alberta, Saskatchewan, Ontario, Quèbec, Nova Scotia, New Brunswick and Newfoundland(collectively, the "Jurisdictions") has received an application from Burlington Resources Canada Energy Ltd.(formerly Poco Petroleums Ltd.) ("BRCEL" or the "Filer") for a decision under the securities legislation of theJurisdictions (the "Legislation") that the requirements contained in the Legislation that:

1.1. BRCEL file with the Decision Makers and send to its shareholders audited annual financial statements(the "Annual Financial Statement Requirements");

1.2. BRCEL file with the Decision Makers and send to its shareholders unaudited interim financialstatements (the "Interim Financial Statement Requirements");

1.3. BRCEL issue a press release and file a report with the Decision Makers upon the occurrence of amaterial change (the "Material Change Requirements"); and

1.4. BRCEL comply with the proxy and proxy solicitation requirements, including filing with the DecisionMakers an information circular or report in lieu thereof (the "Proxy Requirements"),

shall not apply.

2. AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Alberta Securities Commission is the principal regulator for this application;

3. AND WHEREAS the Filer has represented to the Decision Makers that:

3.1. Burlington Resources Inc. ("Burlington") is a corporation organized and subsisting under the laws ofthe State of Delaware.

3.2. Burlington is engaged in the exploration, development, production and marketing of oil and gas.Burlington conducts activities in several strategic areas worldwide, and ranks first among independentoil and gas companies in terms of proven North American reserves.

3.3. Burlington's principal executive offices are located in Houston, Texas.

3.4. The authorized capital stock of Burlington consists of 325,000,000 shares of Common Stock and75,000,000 shares of Preferred Stock of which 3,250,000 shares are designated Series A JuniorParticipating Preferred Stock. One share of Preferred Stock has been designated as Special VotingStock and is entitled to a number of votes equal to the number of outstanding Exchangeable Sharesof Burlington Resources Canada Inc. ("BR Canada"). The one share of Special Voting Stock is heldby a trustee for the benefit of the holder of the Exchangeable Shares of BR Canada. As of March 3,2000, there were 205,489,807 shares of Common Stock outstanding and a further 9,739,027 sharesof Common Stock were reserved for issuance upon the exchange of the Exchangeable Shares of BRCanada. As of June 14, 2000, there were no shares of Preferred Stock issued or outstanding, otherthan the one share of Special Voting Stock.

3.5. Based solely on the filing of Schedules 13G with the Securities and Exchange Commission, as of June14, 2000 there are no known beneficial owners of more than 10% of the Common Stock of Burlington,other than Fidelity International Limited which beneficially owns 21,221,298 shares of Common Stockrepresenting 10.327% of the outstanding shares of Common Stock.

3.6. The Common Stock of Burlington is fully participating and voting and is currently traded on the NYSE.

3.7. Burlington is currently subject to the reporting requirements of the Securities Exchange Act of 1934(the "1934 Act"), and is not a reporting issuer or the equivalent thereof in any provinces or territoriesin Canada.

3.8. BR Canada was incorporated on June 16, 1999 as 835128 Alberta Ltd. under the laws of the Provinceof Alberta. On September 14, 1999 the corporation's name was changed to Burlington ResourcesCanada Inc.

3.9. BR Canada's registered office is located in Calgary, Alberta.

3.10. BR Canada's authorized capital consists of an unlimited number of common shares and an unlimitednumber of Exchangeable Shares. Each Exchangeable Share has economic and voting rightsequivalent to one share of Common Stock of Burlington, but has effectively no economic or votingrights in BR Canada. Holders of Exchangeable Shares are entitled to exchange such shares forCommon Stock of Burlington at any time on a one-for-one basis.

3.11. All of the issued and outstanding Common Shares of BR Canada are held by Burlington.

3.12. As at March 3, 2000, there were 9,739,027 Exchangeable Shares issued and outstanding (excludingExchangeable Shares held by Burlington) all of which were issued pursuant to the Arrangementdescribed in paragraph 3.18 below.

3.13. BRCEL is a corporation organized and subsisting under the Business Corporations Act (Alberta).

3.14. BRCEL's principal executive offices are located in Calgary, Alberta.

3.15. BRCEL is a reporting issuer under the Securities Act (Alberta) and is not in default of any of therequirements under the Act or the regulations thereunder and is a reporting issuer or the equivalentof a reporting issuer under the securities laws of each of the Provinces of Canada.

3.16. BRCEL's authorized capital consists of an unlimited number of common shares, an unlimited numberof First Preferred Shares, issued in series, and an unlimited number of Second Preferred Shares,issued in series.

3.17. As at November 18, 1999, 153,572,672 BRCEL Common Shares were issued and outstanding as fullyparticipating voting shares which were listed on The Toronto Stock Exchange.

3.18. Pursuant to an Amended and Restated Combination Agreement by and between Burlington andBRCEL dated as of August 16, 1999, on November 18, 1999, Burlington, BR Canada and BRCELcompleted a combination pursuant to a plan of arrangement under section 186 of the BusinessCorporations Act (Alberta) (the "Arrangement") whereby each of the holders of common shares ofBRCEL transferred their common shares to BR Canada in consideration for 0.25 ExchangeableShares of BR Canada. The Exchangeable Shares are the economic equivalent of Burlington CommonStock, and the holders thereof essentially hold a participatory interest in Burlington rather than in BRCanada.

3.19. As a result of the Arrangement, BRCEL became a wholly-owned subsidiary of BR Canada, and BRCanada holds all 153,572,672 outstanding common shares of BRCEL. BRCEL has no outstandingFirst Preferred Shares or Second Preferred Shares.

3.20. On November 23, 1999, the Common Shares of BRCEL were delisted by The Toronto StockExchange.

3.21. To facilitate the Arrangement, the Alberta Securities Commission, as principal jurisdiction, granted adecision dated November 17, 1999 pursuant to the System which provided that the Registration andProspectus Requirements (as defined in the decision) would not apply to certain trades in connectionwith the Arrangement, the Continuous Disclosure Requirements (as defined in the decision) would notapply to BR Canada, and the Insider Reporting Requirements (as defined in the decision) would notapply to any insider of BR Canada.

3.22. In addition to the common shares of BRCEL which are held by BR Canada, BRCEL also hasoutstanding: Cdn $50,000,000 of 6.20% notes maturing November 2, 2001; Cdn $100,000,000 of6.40% notes maturing December 3, 2003 and Cdn $150,000,000 of 6.60% notes maturing September11, 2007 (collectively, the "Notes").

3.23. Effective April 3, 2000, Burlington unconditionally guaranteed all principal, interest and other amountsowing under the Notes. Following the grant of the guarantee by Burlington, the ratings on the Noteswere raised to A and A- from CBRS and DBRS, respectively, which are equivalent to the agencies'ratings for Burlington.

3.24. As of October 13, 2000 BRCEL and the trustee appointed by the trust indenture pursuant to which theNotes were issued entered into a supplemental indenture to clarify the financial disclosure BRCEL isrequired to provide to the trustee. The supplemental indenture requires BRCEL to provide to thetrustee the annual and interim financial statements of Burlington, together with the summary annualand interim financial information regarding BRCEL contemplated by this MRRS Decision Document.The financial statements and financial information are required to be provided to the trustee within therespective time limits for the filing by a reporting issuer of annual and interim financial statements withthe Alberta Securities Commission pursuant to the Securities Act (Alberta).

4. AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

5. AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the authority to make the Decision has been met;

6. THE DECISION of the Decision Makers pursuant to the Legislation is that the Annual Financial StatementRequirements, Interim Financial Statement Requirements, Material Change Requirements and ProxyRequirements shall not apply to BRCEL, so long as:

6.1. Burlington shall file with each of the Decision Makers copies of all documents required to be filed byit with the United States Securities and Exchange Commission under the 1934 Act, including, but notlimited to, copies of any Form 10-K, Form 10-Q, Form 8-K, quarterly statement and proxy statementprepared in connection with Burlington's annual meetings;

6.2. Burlington shall comply with the requirements of the NYSE in respect of making public disclosure ofmaterial information on a timely basis and forthwith issues in the Jurisdictions and files with theDecision Makers any press release that discloses a material change in Burlington's affairs;

6.3. BRCEL shall comply with the requirements of the Legislation to issue a press release and file a reportwith the Decision Makers upon the occurrence of a material change in respect of material changesin the affairs of BRCEL that are not material changes in the affairs of Burlington;

6.4. Burlington shall remain the direct or indirect beneficial owner of all the issued and outstanding votingsecurities of BRCEL;

6.5. Burlington maintains a class of securities registered pursuant to the 1934 Act;

6.6. BRCEL does not issue additional securities to those currently issued and outstanding, other than toBurlington or to direct or indirect wholly-owned subsidiaries of Burlington;

6.7. Burlington continues to fully and unconditionally guarantee the Notes as to the payments required tobe made by BRCEL to the holders of the Notes;

6.8. BRCEL delivers to the trustee under the trust indenture pursuant to which the Notes were issued theannual and interim financial statements of Burlington, and the summary annual and interim financialinformation contemplated in paragraphs 6.9 and 6.10 below, within the time requirements imposedby the trust indenture;

6.9. BRCEL files (either separately or as a note to the financial statements of Burlington) a comparativeaudited summary of BRCEL's financial results for its most recently completed financial year, preparedin accordance with, or reconciled to, generally accepted accounting principles in Canada ("CanadianGAAP"), including the following line items:

(a) oil and gas revenue;

(b) net earnings from continuing operations before extraordinary items;

(d) net earnings;

(e) current assets;

(f) non-current assets;

(g) current liabilities; and

(h) non-current liabilities;

6.10. BRCEL files (either separately or as a note to the financial statements of Burlington) a comparativesummary of BRCEL's financial results for its most recently completed interim period and thecomparative interim period for the previous financial year, prepared in accordance with, or reconciledto, Canadian GAAP, which includes the following line items:

(a) oil and gas revenue;

(b) operating income before other expenses;

(d) net earnings;

6.11. if, in the future, the Decision Makers make rules requiring interim financial statements to include abalance sheet, the disclosure included in paragraph 6.10 above would also be required to include asummary of BRCEL's balance sheet, prepared in accordance with, or reconciled to, Canadian GAAP,including the following line items:

(a) current assets;

(b) non-current assets;

(d) non-current liabilities;

6.12. the filings referred to in paragraphs 6.9, 6.10 and 6.11 above are to be made within the time limits, andin accordance with the applicable filing fees required by the Legislation provided that the first filing tobe made by BRCEL under paragraph 6.10 shall be in respect of the first quarter ending March 31,2001 and the first filing to be made by BRCEL under paragraph 6.9 shall be in respect of the financialyear ended December 31, 2000.

March 9, 2001.

"Agnes Lau, CA"