National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – application for a decision that the issuer is not a reporting issuer under applicable securities laws – issuer in default of certain filing obligations as a reporting issuer under applicable securities laws – outstanding securities are beneficially owned, directly or indirectly by fewer than 15 securityholders in each jurisdiction and fewer than 51 securityholders worldwide – requested relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
Citation: Re Craft Oil Ltd., 2017 ABASC 171
November 10, 2017
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR CEASE TO BE
A REPORTING ISSUER APPLICATIONS
IN THE MATTER OF
CRAFT OIL LTD.
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all the jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
(a) the Alberta Securities Commission is the principal regulator for this application,
(b) the Filer has provided notice that sub-section 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon each juris-diction of Canada, other than Alberta and Ontario, and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the Business Corporations Act (Alberta) (the ABCA) and is a reporting issuer in each jurisdiction of Canada.
2. The Filer's head office is located in Calgary, Alberta.
3. The Filer is applying for an order that it has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer.
4. On March 20, 2017, the Filer completed a sale of all or substantially all of its assets to Cardinal Energy Ltd. (the Cardinal Transaction) in exchange for shares of Cardinal Energy Ltd. (the Cardinal Shares). The Cardinal Transaction was approved by 99.95% of the votes cast by Shareholders at a special meeting held on March 17, 2017.
5. Subsequent to the Cardinal Transaction, the Filer's only remaining assets were:
(a) the Cardinal Shares;
(b) shares of Point Loma Resources Ltd. (the Point Loma Shares) which were acquired pursuant to a purchase and sale agreement dated January 23, 2017 between the Filer and Point Loma Resources Ltd; and
(c) working capital surplus, including cash and cash-equivalent assets in the approximate amount of $3.5 million and some equipment that was no longer being used for operations.
6. Pursuant to a statutory plan of arrangement under section 193 of the ABCA completed on June 6, 2017 (the Arrangement), all of the outstanding common shares of the Filer (the Common Shares) were acquired by Manitok Energy Inc. (Manitok) in consideration for common shares of Manitok.
7. On June 5, 2017, the Arrangement was approved by 99.84% of the votes cast by holders of the Common Shares (the Shareholders) at a special meeting of the Shareholders, as well as 99.80% of the votes cast by Shareholders after excluding the votes required by Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. The Arrangement was approved by the Court of Queen's Bench of Alberta on June 6, 2017.
8. Pursuant to the Arrangement, the Point Loma Shares and the Cardinal Shares were distributed to the Shareholders.
9. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
10. No securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
11. The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
12. The Filer has no current intention to distribute any securities by way of a public or private offering of securities in Canada.
13. The Filer is not in default of any of its obligations under the Legislation as a reporting issuer, except for the obligation to file its annual financial statements and management's discussion and analysis for the period ended December 31, 2016 as required under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), the related certificates of such annual statements for the year ended December 31, 2016 as required under National Instrument 52-109 Certification of Disclosure (NI 52-109), a statement of reserves data and other oil and gas information for the year ended December 31, 2016 as required under National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101), a report of an independent qualified reserves evaluator for the year ended December 31, 2016 as required under NI 51-101, a report of management and directors for the year ended December 31, 2016 as required under NI 51-101, its interim financial report and management's discussion and analysis for the periods ended March 31, 2017 and June 31, 2017 as required under NI 51-102 (the Interim Statements) and the related certificates of such Interim Statements as required under NI 52-109 (collectively, the Defaults).
14. The Filer is unable to rely on the simplified procedure set out in National Policy 11-206 Process for Cease to be a Reporting Issuer Applications because of the Defaults.
15. The Filer, upon grant of the Order Sought, will no longer be a reporting issuer in any jurisdiction of Canada.
Each of the Decision Makers is satisfied that the order meets the test contained in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
Alberta Securities Commission