Rock Well Petroleum Inc.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions - issuer granted relief from prospectus requirements in connection with the first trade of common shares of an issuer distributed to purchasers resident in certain jurisdictions under an exempt offering.
Applicable Legislative Provisions
National Instrument 45-102 Resale of Securities.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am, ss. 25, 53 and 74(1).
Citation
Rock Well Petroleum Inc., 2008 ABASC 390.
June 24, 2008
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
ROCK WELL PETROLEUM INC.
(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 under the securities legislation of the Jurisdictions (the Legislation) for:
(a) an exemption from the prospectus requirements (the Exemption Sought) for the first trade of common shares of the Filer distributed to purchasers resident in British Columbia, Quebec and the Jurisdictions under available exemptions in connection with private placements completed from May 19, 2005 to April 16, 2006 (the Private Placements); and
(b) a decision (the Confidentiality Relief Sought) that the application and this decision (collectively, the Confidential Materials) be held in confidence by the Decision Makers until the earliest of the following:
(i) the date on which the Offering (as defined below) or the listing of the Common Shares (as defined below) on the LSE (as defined below) is publicly disclosed;
(ii) the date on which the Filer advises the Decision Makers that there is no longer any need to hold the Confidential Materials in confidence; and
(iii) 90 days after the date of this decision.
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 section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia and Quebec; and
(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Interpretation
Defined terms contained in National Instrument 14-101 Definitions 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 under the laws of Alberta on February 28, 2005, and is governed by the Business Corporations Act (Alberta). The Filer was extraprovincially registered under the laws of British Columbia on March 4, 2005 and under the laws of Saskatchewan on July 21, 2006.
2. The Filer's head office is in Sheridan, Wyoming.
3. The Filer's Canadian head office and registered office are located in Calgary, Alberta.
4. The Filer is not a reporting issuer in any jurisdiction in Canada nor are any of its securities listed or posted for trading on any exchange in Canada. The Filer has no present intention of becoming a reporting issuer in Canada.
5. The Filer's mind and management is not located in Alberta.
6. The authorized capital of the Filer consists of an unlimited number of Class A common shares (the Common Shares), of which 213,907,541 Common Shares are issued and outstanding, and an unlimited amount of Class B shares, issuable in series, of which none are outstanding.
7. In the Private Placements, 12,834,666 Common Shares were sold and issued to residents of Canada (the Canadian Common Shares).
8. In the absence of an order granting the Exemption Sought, the first trade of the Canadian Common Shares by a resident of British Columbia, Quebec and the Jurisdictions (the Canadian Shareholders) will be deemed to be a distribution pursuant to National Instrument 45-102 Resale of Securities (NI 45-102) unless, among other things, the Filer is and has been a reporting issuer in a jurisdiction of Canada for the four months immediately preceding the trade.
9. The exemption provided for by section 2.14(1) of NI 45-102 will not be available to the Canadian Shareholders with respect to a first trade of Canadian Common Shares as the criteria set out at Section 2.14(1)(b) of NI 45-102 are not met in that, at the distribution date, residents of Canada did not hold less than 10% of the Common Shares and did not represent in number less than 10% of the total number of owners, directly or indirectly, of Common Shares.
10. The Filer has determined that as of June 17, 2008, Canadian residents hold approximately 6% of the total issued and outstanding Common Shares.
11. Using reasonable efforts, the Filer determined that as of June 17, 2008, 13.47% of the total number of shareholders, direct or indirect, of Common Shares are residents of Canada. If all of the beneficial holders of Common Shares were accounted for, the Filer believes that less than 10% of the total number of shareholders, direct or indirect, would be resident in Canada.
12. The Filer proposes to conduct an initial public offering of its Common Shares (the Offering). None of the Common Shares to be issued under the Offering will be distributed to residents of Canada.
13. The Filer has made an application to list the Common Shares for trading on the London Stock Exchange (LSE), following which, the Common Shares will be publicly traded on such foreign exchange.
14. Immediately following the Offering, the Canadian Common Shares will constitute less than 10% of the issued and outstanding Common Shares. Further, after giving effect to the Offering, it is anticipated that holders of the Canadian Common Shares will represent in number less than 10% of the total number of owners, directly or indirectly, of Common Shares of the Filer.
15. No market currently exists in Canada for the Common Shares and none is expected to develop. It is intended that any resale of the Canadian Common Shares by Canadian residents will be effected through the facilities of the LSE, in accordance with its rules and regulations.
16. The Filer will be subject to the reporting obligations under the rules of the LSE. Canadian Shareholders will receive copies of all shareholder materials provided to all other holders of Common Shares, as required by the rules of the LSE.
17. The Filer is not in default of securities legislation in any jurisdiction.
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:
1. the Exemption Sought is granted provided that:
(a) at the date of the trade, the Filer is not a reporting issuer in any jurisdiction in Canada; and
(b) the trade is made through an exchange, or a market, outside of Canada; and
2. the Confidentiality Relief Sought is granted.