PetroNova Inc.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Exemption granted from the requirement to prepare financial statements in accordance with Canadian GAAP -- Issuer recently became a reporting issuer -- Issuer has not previously prepared financial statements in accordance with Canadian GAAP -- Issuer has assessed the readiness of its staff, board and audit committee -- Relief granted subject to conditions.

Applicable Legislative Provisions

National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency.

February 2, 2011

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

PETRONOVA INC.

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Makers) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting the Filer from the requirement in section 4.2 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107) that financial statements be prepared in accordance with Canadian GAAP (the Exemption Sought), in order that the Filer may prepare its annual financial statements for the year ended December 31, 2010 in accordance with Part I of the CICA Handbook, that is International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IFRS-IASB).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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

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

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

Interpretation

Terms defined in National Instrument 14-101Definitions and MI 11-102 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 was incorporated on September 16, 2009 pursuant to the laws of Alberta and was initially a wholly owned subsidiary of Inepetrol AB, a company incorporated pursuant to the laws of Sweden (Inepetrol). On June 15, 2010, the Filer incorporated PetroNova International Inc., pursuant to the laws of the Cayman Islands as a wholly owned subsidiary. On June 28, 2010, the Filer, through its subsidiary PetroNova International Inc., acquired all of the shares of PetroNova Colombia Inc. (formerly named Inepetrol Colombia Inc.), a company which was incorporated pursuant to the laws of the Cayman Islands on June 21, 1996, from Inepetrol (the Acquisition). The Filer's head office is Bogota, Columbia and its registered office is Calgary, Alberta.

2. In connection with its initial public offering prospectus (the Prospectus), the Filer was granted relief from the requirement in section 3.2 of NI 52-107Acceptable Accounting Principles, Auditing Standards and Reporting Currency, as it then was, in order to permit the Filer to use IFRS-IASB to prepare its financial statements included in the Prospectus.

3. The Filer became a reporting issuer in the Jurisdictions and Passport Jurisdictions on December 14, 2010.

4. The TSX Venture Exchange approved the listing of common shares issued pursuant to the Prospectus which are now trading under the symbol "PNA".

5. An aggregate of 165,301,302 common shares of the Filer are issued and outstanding.

6. The Filer is not, to its knowledge, in default of its obligations under the Legislation or the securities legislation of the Jurisdictions and the Passport Jurisdictions.

7. The Filer has a financial year-end of December 31.

8. The Canadian Accounting Standards Board has confirmed that publicly accountable enterprises will be required to prepare their financial statements in accordance with IFRS-IASB for financial statements relating to fiscals years beginning on or after January 1, 2011.

9. NI 52-107 sets out acceptable accounting principles for financial reporting under the Legislation by domestic issuers, foreign issuers, registrants and other market participants. Under NI 52-107, a domestic issuer must use Canadian GAAP with the exception that an SEC registrant may use US GAAP and only foreign issuers may use IFRS-IASB.

10. In CSA Staff Notice 52-321 Early Adoption of International Reporting Standards -- Use of US GAAP and Reference IFRS-IASB, staff of the Canadian Securities Administrators recognized that some issuers may wish to prepare their financial statements in accordance with IFRS-IASB for periods beginning prior to January 1, 2011 and indicated that staff were prepared to recommend exemptive relief on a case by case basis to permit an issuer to do so.

11. At the material times prior to the Acquisition, all of the business of the Filer was carried on within a corporate group that was subject to common control and ownership. Accordingly, the Acquisition was accounted for on a continuity of interest basis whereby the Filer is assumed to have had ownership of the entire business for all financial periods presented.

12. The Filer has evaluated its overall readiness to use IFRS, including the readiness of its staff, board of directors and audit committee, and has concluded that it is adequately prepared to use IFRS effective immediately. The Filer has considered the implications of using IFRS on its obligations under securities legislation including but not limited to, those relating to CEO and CFO certifications, business acquisition reports and offering documents.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

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

(a) the Filer prepares its annual financial statements for the year ended December 31, 2010 in accordance with IFRS-IASB; and

(b) the Filer's annual IFRS-IASB financial statements disclose an explicit and unreserved statement of compliance with IFRS.