C&C Energia Ltd.

Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- Exemption from the requirement under Part 8 of NI 51-102 to include financial statements in a Business Acquisition Report -- the Filer will provide alternative disclosure on the basis that the acquisition was in substance an acquisition by the Filer of an interest in oil and gas properties.

Applicable Legislation

National Instrument 51-102 Continuous Disclosure Obligations

Citation: C&C Energia Ltd., Re, 2011 ABASC 390

July 21, 2011

IN THE MATTER OF

SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(The Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS OF EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

C&C ENERGIA LTD.

(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) exempting the Filer from the requirement to include in a business acquisition report (BAR) certain financial information as required under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) in respect of a significant acquisition made by the Filer, on the condition that the Filer include in the BAR the Alternative Financial Disclosure (defined below) (the Exemption Sought).

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 subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; 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

Terms defined in National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer was incorporated under the Business Corporations Act (Alberta) on February 28, 2005. On March 8, 2005, the Filer amended its articles to change its name to "C&C Energy Canada Ltd." On May 24, 2010, in preparation for the Filer's initial public offering, the Filer amended it articles to among other things, change its name from "C&C Energy Canada Ltd." to "C&C Energia Ltd." Its head office is located in Calgary, Alberta.

2. The Filer is an independent resource company whose principal business activities consist of the exploration for, and development and production of, oil resources in Colombia.

3. The Filer is a reporting issuer in each of the provinces of Canada, and is not to its knowledge, after reasonable inquiry, in default of securities legislation of any jurisdiction in Canada.

4. The common shares of the Filer are listed and posted for trading on the Toronto Stock Exchange under the symbol "CZE".

5. On March 25, 2011, a subsidiary of the Filer entered into a purchase and sale agreement (the Acquisition Agreement) with Ramshorn International Limited (the Vendor), Ramshorn Holdings Limited, a subsidiary of the Vendor (the Holding Subsidiary) and Nabors Global Holdings II Limited, the Vendor's parent company, providing for the indirect acquisition (the Acquisition) by the Filer of certain oil and gas properties and related assets in Colombia (the Assets).

6. Subsequent to the entering into of the Acquisition Agreement and immediately prior to the closing of the Acquisition the Vendor transferred the Assets to the Holding Subsidiary. The Acquisition was completed on May 9, 2011.

7. As a result of the Acquisition Agreement, the Filer acquired through its subsidiary, 100% of the issued and outstanding shares of the Holding Subsidiary.

8. The Holding Subsidiary is an inactive subsidiary of the Vendor that was used by the Vendor for the purpose of facilitating the Acquisition. At the time of the closing of the Acquisition, the Holding Subsidiary had no assets or liabilities other than the Assets, and carried on no other business.

9. The acquisition of the Assets by way of the purchase and sale of the issued and outstanding shares of the Holding Subsidiary was made for the purpose of facilitating the Acquisition in a manner that achieved certain tax efficiencies for the Vendor and facilitated the governmental approval process for the Acquisition in Colombia.

10. The Acquisition constitutes a "significant acquisition" for the Filer within the meaning of Part 8 of NI 51-102. Accordingly, the Filer is required to file a BAR in respect of the Acquisition.

11. The financial year end of the Filer is December 31 and the financial year end of the Holding Subsidiary is December 31.

12. Pursuant to Item 3 of Form 51-102F4 Business Acquisition Report (Form 51-102F4) and Part 8 of NI 51-102, the Filer would, absent the Exemption Sought, be required to include in its BAR for the Acquisition, subject to the exemptions provided therein:

(a) an income statement, a statement of retained earnings and a cash flow statement of each of the two most recently completed financial years in respect of the Holding Subsidiary, a balance sheet as at the end of each such financial year, and notes to the financial statements;

(b) an auditors' report on the income statement, statement of retained earnings and cash flow statements for the most recently completed financial year in respect of the Holding Subsidiary and the balance sheet as at the end of such financial year;

(c) an income statement, a statement of retained earnings and a cash flow statement of each of the most recently completed interim period and a comparable period in the preceding financial year in respect of the Holding Subsidiary, a balance sheet as at the end of each such periods, and notes to the financial statements;

(d) a pro forma balance sheet of the Filer as at March 31, 2011 that gives effect to the Acquisition as if it had taken place as at such date; and

(e) a pro forma income statement of the Filer for the financial year ended December 31, 2010, and for the three month interim period ended March 31, 2011, in each case giving effect to the acquisition as if it had taken place at December 31, 2010 together with pro forma earnings per share.

13. Subsection 8.10(3) of NI 51-102 provides an exemption from the financial statement disclosure requirements that would otherwise apply under Part 8 of NI 51-102 if the significant acquisition is of a business that is an interest in an oil and gas property, provided that, among other things: (i) the acquisition is not an acquisition of securities of another issuer; and (ii) the Filer includes in the BAR for the Acquisition, historical operating statements in respect of the Assets and pro forma operating statements of the Filer as required under paragraph 8.10(3)(e) of NI 51-102.

14. All of the conditions set forth in subsection 8.10(3) of NI 51-102 are satisfied, except for the fact that the Acquisition is an acquisition of securities of another issuer.

15. The Filer does not have access to the source documents required to prepare audited financial statements for the Holding Subsidiary and cannot therefore fulfill the BAR requirements.

16. The Filer proposes to include in the BAR to be filed in respect of the Acquisition all of the information that would be required under paragraph 8.10(3)(e) of NI 51-102, being:

(a) an audited operating statement presenting gross revenue, royalty expenses, production costs and operating income of the Assets for the year ended December 31, 2010;

(b) an unaudited operating statement presenting gross revenue, royalty expenses, production costs and operating income of the Assets for the year ended December 31, 2009;

(c) unaudited operating statements presenting gross revenue, royalty expenses, production costs and operating income of the Assets for the three month periods ended March 31, 2011 and March 31, 2010, respectively;

(d) an unaudited pro forma operating statement of Filer presenting gross revenue, royalty expenses, production costs and operating income for the year ended December 31, 2010 giving effect to the Acquisition as if it had taken place at January 1, 2010;

(e) an unaudited pro forma operating statement of Filer presenting gross revenue, royalty expenses, production costs and operating income for the three months ended March 31, 2011 giving effect to the Acquisition as if it had taken place at January 1, 2010;

(f) a description of the Assets and disclosure regarding the annual oil production volumes from the Assets, as contemplated in subparagraphs 8.10(3)(e)(iii) and (iv) of NI 51-102; and

(g) information regarding the estimated reserves and future related net revenue attributable to the Assets and estimated oil production volumes therefrom, as contemplated in paragraph 8.10(3)(g) of NI 51-102,

(collectively, the Alternative Financial Disclosure).

17. The Acquisition was, in substance, an acquisition by the Filer of an interest in oil and gas properties constituting a business. For certain tax and governmental approval efficiencies, the transaction was structured by the Vendor as a purchase by the Filer of all of the issued and outstanding shares of the Holding Subsidiary rather than the acquisition of the Assets directly from the Vendor. Absent these considerations, the Filer would have acquired the Assets directly from the Vendor and availed itself of the exemption provided in subsection 8.10(3) of NI 51-102 with respect to the financial disclosure to be included in the BAR.

18. The Alternative Financial Disclosure provides complete information regarding the business acquired by the Filer. The Holding Subsidiary was an inactive subsidiary of the Vendor used by the Vendor to facilitate the Acquisition, which had no assets or liabilities other than the Assets, which it acquired immediately before the Acquisition in connection with the Acquisition.

19. The Filer seeks a decision of the Decision Makers under section 13.1 of NI 51-102 exempting the Filer from the requirements to include in the BAR to be filed in respect of the Acquisition, the financial statements and other information required pursuant to Item 3 of Form 51-102F4, provided that the BAR includes the Alternative Financial Disclosure.

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 the Filer includes the Alternative Financial Disclosure in the BAR to be filed in respect of the Acquisition.