Denison Energy Inc. - ss. 4(b) of Reg. 289

Headnote

Consent given to an offering corporation under the OBCA to continue under the CBCA.

Statutes Cited

Business Corporations Act, R.S.O. 1990, c. B.16, as am., 181.

Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Regulations made under the Business Corporations Act, R.R.O. 1990, Reg. 289/00, s. 4(b).

IN THE MATTER OF

R.R.O. 1990, REGULATION 289/00 (the Regulation)

MADE UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO),

R.SO. 1990 c. B.16, AS AMENDED (the OBCA)

AND

IN THE MATTER OF

DENISON ENERGY INC.

CONSENT

(Subsection 4(b) of the Regulation)

UPON the application of Denison Energy Inc. (Denison) to the Ontario Securities Commission (the Commission) requesting a consent from the Commission for Denison to continue in another jurisdiction pursuant to subsection 4(b) of the Regulation;

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

AND UPON Denison representing to the Commission that:

1. Denison proposes to make an application to the Director under the OBCA pursuant to section 181 of the OBCA (the Application for Continuance) for authorization to continue as a corporation under the Business Corporations Act (Alberta), R.S.A. 2000 c. B-9, as amended (the ABCA).

2. Pursuant to subsection 4(b) of the Regulation, where a corporation is an offering corporation, the Application for Continuance must be accompanied by a consent from the Commission.

3. Denison was formed pursuant to an amalgamation dated February 12, 1973 under the OBCA. Denison's current principal and registered office is located at the Atrium on Bay, 40 Dundas Street West, Suite 320, Toronto, Ontario M5G 2C2.

4. Denison is an offering corporation under the OBCA and is a reporting issuer under the Securities Act, R.S.O. 1990, c. S.5, as amended (the Act). Denison is also a reporting issuer under the securities legislation of each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland. Denison intends to remain a reporting issuer in Ontario and British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.

5. Denison's issued and outstanding common shares are currently listed for trading on the Toronto Stock Exchange.

6. Denison is not in default under any provision of the Act or the regulations made under the Act or under the securities legislation of any other jurisdiction where it is a reporting issuer.

7. Denison is not a party to any proceedings or to the best of its knowledge, information and belief, pending proceeding under the Act.

8. Pursuant to the proposed reorganization of Denison, Denison will be restructured into three publicly traded companies pursuant to an arrangement (the Arrangement) in accordance with section 182 of the OBCA. The Arrangement will consist of the following significant events:

(a) the amalgamation of Denison with Tenwest Uranium Limited, a wholly-owned subsidiary of Denison;

(b) the transfer of all of Denison's petroleum and natural gas assets to Denison Resources Inc., a wholly-owned subsidiary of Denison Oil Corporation which is a wholly owned subsidiary of Denison, and the assumption by Denison Resources Inc. of substantially all of the liabilities of Denison related to such assets;

(c) the transfer of all of Denison's mining leases and mining and environmental services related assets to a wholly-owned subsidiary of Denison, Denison Mines Inc., and the assumption by Denison Mines Inc. of substantially all of the liabilities related to such assets;

(d) the distribution to each shareholder of Denison of one-fifth of a common share of Denison Oil Corporation and one common share of Denison Mines Inc. for each common share of Denison held by such shareholders; and

(e) a consolidation of the common shares of Denison on a one for 21 basis.

9. On the completion of the distribution of the shares of Denison Mines Inc. and Denison Oil Corporation to the current shareholders of Denison pursuant to the Arrangement, Denison will complete a private placement (the Subscription) of common shares of Denison to an investor group designated by Matco Capital Ltd. (Matco). The Subscription will raise approximately $5.3 million and will result in Matco and its designated investors holding a 45% interest in Denison following the transaction. Denison has agreed with Matco that it will use its reasonable commercial efforts to effect the continuance of Denison from Ontario to Alberta as soon as possible following the effective time of the Arrangement.

10. James S. Blair, Gregory S. Fletcher and Paul F. Little, currently directors of Denison will continue as directors of Denison and will be joined on the board by Ronald P. Mathison and Martin A. Lambert.

11. Pursuant to a purchase option (the CalFrac Option) executed on December 30, 2003, among CalFrac Well Services Ltd. (CalFrac), Matco Investments Ltd. (on behalf of itself and all other shareholders of CalFrac) and Denison, the shareholders of CalFrac granted an irrevocable option to Denison to purchase all of the common shares of CalFrac for an aggregate purchase price of approximately $227.5 million, less the net debt of Calfrac at December 30, 2003 (approximately $25.2 million) and less the amount of any debt assumed by CalFrac subsequent to December 30, 2003.

12. CalFrac is a private corporation incorporated under the provisions of ABCA and is engaged in the provision of specialized oilfield services, principally hydraulic fracturing and other well stimulation services, to exploration and production companies in the oil and gas industry throughout western Canada and the Rocky Mountain region of the United States. The head office and registered office of CalFrac is located at 411 - 8th Ave S.W., Calgary, Alberta T2P 1E3.

13. If Denison exercises the Calfrac Option and completes the acquisition of Calfrac (the Calfrac Acquisition) it intends to complete a vertical short form amalgamation (the Amalgamation) of Denison and CalFrac, to change the name of the continuing corporation from Denison Energy Inc. to CalFrac Well Services Ltd. and to have R. Tim Swinton and Douglas R. Ramsay, each of whom is a resident of Calgary, Alberta, join the board of directors. Following these transactions, Calfrac's oil and gas industry services business will become Denison's ongoing business and will be managed from Calfrac's head office.

14. The Application for Continuance of Denison was approved by the shareholders of Denison by special resolution at the Special Meeting of securityholders (the Meeting) held on March 3, 2004. The Approval for Continuance is part of a reorganization resolution (the Reorganization Resolution) that includes approval for the Arrangement, the Subscription, the Application for Continuance, a change in name and a reduction in the deficit, contributed surplus and common share capital of Denison (the Reorganization).

15. Pursuant to Section 185 of the OBCA, all shareholders of record as of the record date for the Meeting were entitled to dissent rights with respect to the Reorganization (the Dissent Rights).

16. The management information circular dated January 29, 2004 (the Circular) provided to all securityholders in connection with the Meeting, advised Dension shareholders of their Dissent Rights.

17. The principal reason for the Application for Continuance is that following the Reorganization:

(a) Denison will not conduct any material business activities or have any material assets in Ontario;

(b) management of Denison will be located in Calgary, Alberta;

(c) each of the directors of Denison, except Paul F. Little, will be resident in Calgary, Alberta;

(d) the registered and head office of Denison will be located at 400, 407 - 8th Ave S.W., Calgary, Alberta T2P 1E5 and, if the Calfrac Acquisition is completed, it will be located at 411-8^th Ave S.W. Calgary, Alberta, T2P 1E3;

(e) the only material asset of Denison will be the Calfrac Option; and

(f) if the Calfrac Acquisition is completed, Denison intends to complete the Amalgamation which will require Denison to be an Alberta corporation.

18. On March 5, 2004, Denison applied to the Ontario Supreme Court of Justice for a final order to approve the Arrangement. Denison expects to receive the Certificate of Arrangement on March 8, 2004, immediately after which Denison intends to file the Application for Continuance. Articles of Continuance will only be filed in Alberta if the Arrangement becomes effective.

19. By letter dated January 16, 2004, OSC staff confirmed that they would not object to Denison's application for a change of the principal regulator for materials filed under National Policy 43-201 Mutual Reliance Review System for Prospectuses and Annual Information Forms from the OSC to the Alberta Securities Commission (the ASC). By letter dated January 19, 2004 the ASC confirmed it would act as principal regulator for Denison's preliminary prospectus that was filed the week of January 19, 2004.

20. The material rights, duties and obligations of a corporation governed by the ABCA are substantially similar to those of a corporation governed by the OBCA.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

THE COMMISSION HEREBY CONSENTS to the continuance of Denison as a corporation under the ABCA.

March 5, 2004.