Sea Dragon Energy Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption to provide more recent Form 51-101F1 information in an information circular. Filer required to include Form 51-101F1 information as at December 31, 2010. Filer granted relief to provide Form 51-101F1 information dated as at September 30, 2011 instead.

Applicable Legislative Provisions

NI 41-101 General Prospectus Requirements.

NI 51-102 Continuous Disclosure Obligations.

March 28, 2012

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

SEA DRAGON ENERGY 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) that, pursuant to Section 13.1 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), the Filer be exempt, subject to certain conditions, from the requirement to provide under Item 14.2 of Form 51-102F5 Information Circular (Form 51-102F5), certain reserves data and other oil and gas disclosure relating to National Petroleum Company Egypt Limited (NPC) as required by paragraph 5.5(1)(a) of Form 41-101F1 Information Required in a Prospectus (Form 41-101F1) in the information circular to be sent to certain securityholders of the Filer (the Information Circular) in connection with an Acquisition (as defined herein) (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, Nova Scotia, New Brunswick, 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, MI 11-102 or NI 51-102 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:

The Filer and NPC

1. The Filer is a corporation incorporated under the Canada Business Corporations Act. The Filer's head office is located in Calgary, Alberta.

2. The Filer is a reporting issuer or its equivalent in all of the provinces of Canada other than Québec (the Reporting Jurisdictions), and is not, to its knowledge, in default of its obligations pursuant to the securities legislation of the Reporting Jurisdictions.

3. NPC is a British Virgin Islands business company incorporated under the BVI Business Companies Act, 2004 and is a wholly owned subsidiary of Golden Crescent Investments Ltd., a British Virgin Islands business company (Golden Crescent).

The Acquisition

4. On March 19, 2012, the Filer entered into an amended and restated share purchase agreement (the Acquisition Agreement) with Golden Crescent providing for the acquisition by the Filer of all of the issued and outstanding shares in the capital of NPC from Golden Crescent (the Acquisition). Upon completion of the Acquisition, NPC will become a wholly-owned subsidiary of the Filer, directly or indirectly.

5. Subject to any working capital adjustments made in accordance with the terms of the Acquisition Agreement, the consideration payable by the Filer will include, among other things, the issuance to Golden Crescent of: i) 437,500,000 common shares in the capital of the Filer at a deemed price of US$0.20 per share, and (ii) 60,000 convertible preferred shares at an issue price of US$1,000.00 per preferred share (collectively, the Payment Shares).

6. Completion of the Acquisition is subject to, among other things, the approval by the Filer's shareholders (the Shareholders) of a resolution approving certain matters including the Acquisition and the issuance of the Payment Shares to Golden Crescent in connection with the Acquisition (the Share Issuance Resolution). While the Acquisition itself does not require the approval of the Shareholders under applicable securities and corporate legislation, the policies of the TSX Venture Exchange (the TSXV) provide that shareholder approval is required for any acquisition which results in the creation of a new control person. Upon completion of the Acquisition and a private placement financing to be completed prior to the closing of the Acquisition, it is anticipated that Golden Crescent will hold more than 20% of the Filer's issued and outstanding common shares, and accordingly would be considered a "control person" under the policies of the TSXV. In addition, the Shareholders will be asked to vote upon a special resolution approving the consolidation of the Filer's common shares on a 10 for 1 basis (the Share Consolidation Resolution).

The Information Circular

7. The Filer intends to present the Share Issuance Resolution and the Share Consolidation Resolution to the Shareholders at a special meeting of shareholders on April 30, 2012 (the Meeting). Pursuant to Item 14.2 of Form 51-102F5, if, among other things, action is to be taken in respect of a significant acquisition, the disclosure required in the Information Circular in respect of the Meeting "must be the disclosure (including financial statements) prescribed under securities legislation and described in the form of prospectus that the entity would be eligible to use immediately prior to sending and filing the information circular ...". With respect to NPC the disclosure is required to be in accordance with National Instrument 41-101 General Prospectus Requirements, and more specifically, under Form 41-101F1.

8. Item 5.5 of Form 41-101F1 requires, among other things, disclosure in accordance with Form 51-101F1 Statement of Reserves Data and Other Oil and Gas Information (the Form 51-101F1 Information). The Form 51-101F1 Information is required to be disclosed as at the end of the most recent financial year for which the Information Circular includes an audited balance sheet of the issuer. The Filer is required to include in the Information Circular an audited balance sheet as at December 31, 2010. The Filer is not yet required to include in the Information Circular an audited balance sheet as at December 31, 2011.

9. The Filer proposes to include, among its other required disclosure, the Form 51-101F1 Information as at September 30, 2011 rather than December 31, 2010 (the Proposed Reserves Disclosure). The Proposed Reserves Disclosure will give the Shareholders more recent information than if the Form 51-101F1 Information were dated as at December 31, 2010.

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 the Filer includes the Proposed Reserves Disclosure in the Information Circular.

"Blaine Young"
Associate Director, Corporate Finance