Nabors Industries, Inc. et al. - MRRS Decision

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - relief from registration and prospectusrequirements in connection with statutory arrangement involvingan exchangeable share structure where exemptions may not beavailable for technical reasons. Exchangeco exempted from certaincontinuous disclosure and insider reporting requirements subjectto certain conditions. First trade deemed a distribution unlessmade in accordance with specified provisions of MultilateralInstrument 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).

Applicable Instruments

Multilateral Instrument 45-102 Resale of Securities.

IN THE MATTER OF
THE SECURITIES LEGISLATION
OF ALBERTA, BRITISH COLUMBIA, SASKATCHEWAN,
MANITOBA, ONTARIO, QUÉBEC, NEW BRUNSWICK,
NOVA SCOTIA, PRINCE EDWARD ISLAND,
NEWFOUNDLAND AND LABRADOR, YUKON TERRITORY,
NUNAVUT AND NORTHWEST TERRITORIES

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
NABORS INDUSTRIES, INC.,
NABORS EXCHANGECO (CANADA) INC.,
3064297 NOVA SCOTIA COMPANY AND
ENSERCO ENERGY SERVICE COMPANY INC.

MRRS DECISION DOCUMENT

1. WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Alberta, British Columbia, Saskatchewan, Manitoba, Ontario,Québec, New Brunswick, Nova Scotia, Prince Edward Island,Newfoundland and Labrador, Yukon Territory, Nunavut and theNorthwest Territories (the "Jurisdictions") has receivedan application from Nabors Industries, Inc. ("Nabors"),3064297 Nova Scotia Company ("Callco") and NaborsExchangeco (Canada) Inc. ("Canco") (collectively,the "Applicant") for a decision under the securitieslegislation, regulations, rules, instruments and/or policiesof the Jurisdictions (the "Legislation") that:

1.1 the requirements contained in the Legislationto be registered to trade in a security (the "RegistrationRequirement") and to file a preliminary prospectus anda prospectus and to obtain receipts therefore (the "ProspectusRequirement") shall not apply to certain trades and distributionsof securities to be made in connection with an agreement (the"Acquisition Agreement") to combine the businessesof Nabors and Enserco Energy Service Company Inc. ("Enserco")pursuant to a plan of arrangement (the "Arrangement")under Section 192 of the Canada Business Corporations Act, asamended (the "CBCA");

1.2 the requirements contained in the Legislationfor all of the Jurisdictions except Nova Scotia, Prince EdwardIsland, New Brunswick and Newfoundland and Labrador for a reportingissuer or the equivalent to issue a press release and file areport with the Decision Makers upon the occurrence of a materialchange, file and deliver an annual report, where applicable,interim and annual financial statements, information circularsand annual information forms and provide, where applicable,interim and annual management's discussion and analysis of financialconditions and results of operations (collectively, the "ContinuousDisclosure Requirements") shall not apply to Canco; and

1.3 the requirements contained in the Legislationfor all of the Jurisdictions except Nova Scotia, Prince EdwardIsland, New Brunswick and Newfoundland and Labrador that aninsider of a reporting issuer or the equivalent file reportsdisclosing the insider's direct or indirect beneficial ownershipof, or control or direction over, securities of the reportingissuer or the equivalent (the "Insider Reporting Requirements")shall not apply to insiders of Canco;

2. AND WHEREAS pursuant to the MutualReliance Review System for Exemptive Relief Applications (the"System") the Alberta Securities Commission is theprincipal regulator for this application;

3. AND WHEREAS the Applicant has representedto the Decision Makers that:

3.1 Nabors is a corporation organized and existingunder the laws of the State of Delaware, with its head officein Houston, Texas;

3.2 Nabors, together with its subsidiaries,is the largest drilling contractor in the world, conductingoil, gas and geothermal and drilling operations in the UnitedStates, Canada and internationally, primarily in South and CentralAmerica and the Middle East;

3.3 as at December 31, 2001, Nabors' total assetswere approximately US$4.2 billion, while its total operatingrevenues and net income for the financial year then ended wereapproximately US$2.2 billion and US$387.5 million, respectively;

3.4 the authorized capital stock of Nabors consistsof 418,000,000 shares of Nabors stock, par value US$0.10 pershare, of which 400,000,000 are shares in the common stock ofNabors ("Nabors Shares"), 10,000,000 are shares ofpreferred stock and 8,000,000 are shares of class B stock. Asat February 25, 2002, there were 140,943,885 Nabors Shares issuedand outstanding and no other shares of any class or series outstanding;

3.5 the Nabors Shares are currently listed andposted for trading on the American Stock Exchange (the "AMEX")under the symbol "NBR";

3.6 as at February 22, 2002, there were nineregistered holders of Nabors Shares resident in Canada (outof a total of 2,447 registered holders) holding 1,744 NaborsShares, representing approximately 0.001% of the total numberof issued and outstanding Nabors Shares. As of March 27, 2002,there were 976 beneficial holders of Nabors Shares residentin Canada holding 243,022 Nabors Shares representing approximately0.17% of the total number of issued and outstanding Nabors Shares;

3.7 on February 25, 2002, the day immediatelyprior to the Arrangement being publicly announced, the closingprice for Nabors Shares was US$34.80, representing a marketcapitalization of approximately US$4.9 billion;

3.8 Nabors is subject to the reporting requirementsof the United States Securities Exchange Act of 1934, as amended(the "1934 Act");

3.9 Nabors is not a reporting issuer or theequivalent in any of the Jurisdictions but anticipates becominga reporting issuer or the equivalent, absent exemptive relieffrom the securities regulatory authority or regulator therein,in Alberta, Saskatchewan and Québec following, and asa consequence of, the completion of the Arrangement;

3.10 Callco is an indirect wholly-owned subsidiaryof Nabors. Callco is an unlimited liability company incorporatedunder the Companies Act (Nova Scotia) solely for the purposeof holding the various call rights associated with the exchangeablenon-voting shares of Canco to be issued pursuant to the Arrangement(the "Exchangeable Shares");

3.11 all of the issued and outstanding sharesof Callco will be held indirectly by Nabors at all materialtimes. Callco is not a reporting issuer or the equivalent anddoes not intend to become a reporting issuer or the equivalentin any province or territory of Canada;

3.12 Nabors and Callco have submitted an applicationto the securities regulatory authorities in Alberta and Saskatchewanto be deemed to have ceased to be reporting issuers or the equivalentafter the Effective Time (as defined below) of the Arrangement;

3.13 Canco was incorporated under the CBCA onMarch 8, 2002 for the purpose of implementing the Arrangement,and has its registered office in Calgary, Alberta. Canco hasnot carried on any business to date;

3.14 the authorized capital of Canco consistsof an unlimited number of common shares and an unlimited numberof Exchangeable Shares;

3.15 the only securities of Canco that are issuedor may be issued are common shares and Exchangeable Shares andall of the issued and outstanding common shares are held andwill continue to be held, indirectly, by Nabors as long as anyoutstanding Exchangeable Shares are owned by any person or entityother than Nabors or any of Nabors' subsidiaries. Upon completionof the Arrangement, all of the issued and outstanding ExchangeableShares will be held by former holders of Enserco Shares (asdefined below) who receive Exchangeable Shares in exchange fortheir Enserco Shares pursuant to the Arrangement;

3.16 Canco is not a reporting issuer or theequivalent in any of the Jurisdictions but anticipates becominga reporting issuer or the equivalent, in British Columbia, Alberta,Saskatchewan, Manitoba, Ontario and Québec following,and as a consequence of, the completion of the Arrangement;

3.17 the Exchangeable Shares were conditionallyapproved for listing on The Toronto Stock Exchange (the "TSE")on March 20, 2002, subject to completion of the Arrangementand the satisfaction of its customary requirements;

3.18 on November 17, 1988, Bonus Petroleum Cop.and Bonus Resources Ltd. were amalgamated under the CBCA byvirtue of a Certificate of Amalgamation to continue under thename Bonus Petroleum Corp. Bonus Petroleum Corp. changed itsname to Bonus Resource Services Corp. ("Bonus") onJune 6, 1996. Thereafter on August 1, 1998, Bonus, Pink PantherOilfield Services Ltd., Swab-Tech Inc. and Trimat Well ServicingInc. amalgamated under the CBCA by virtue of a Certificate ofAmalgamation to continue under the name Bonus. Bonus subsequentlychanged its name to Enserco Energy Service Company Inc. on May4, 2001;

3.19 Enserco is an integrated energy servicescompany providing production and drilling services to the NorthAmerican oil and gas industry, which, through its subsidiaries,currently operates over 200 service rigs and 30 drilling rigs;

3.20 Enserco has reported that, as at December31, 2001, Enserco's total assets were approximately Cdn. $407.2million, while its total operating revenues and net income forthe year ended December 31, 2001 were Cdn. $293.4 million andCdn. $45.3 million, respectively;

3.21 the authorized capital of Enserco consistsof an unlimited number of common shares ("Enserco Shares"),of which 26,179,861 Enserco Shares were issued and outstandingas of February 25, 2002. Up to an additional 741,630 EnsercoShares may be issued pursuant to outstanding in-the-money options("Enserco Options") and up to 77,000 Enserco Sharesmay be issued pursuant to outstanding out-of-the-money EnsercoOptions. Up to an additional 500,000 Enserco Shares may be issuedpursuant to outstanding warrants ("Warrants"). Upto an additional 2,500 Enserco Shares may be issued pursuantto certain share purchase rights ("Share Purchase Rights")pursuant to a cooperation agreement dated June 18, 2001 betweenBonus Well Servicing Partnership and Polar Energy Services Ltd.;

3.22 the Enserco Shares are listed and postedfor trading on the TSE under the symbol "ERC";

3.23 Enserco is a reporting issuer or the equivalentin Alberta, British Columbia, Saskatchewan, Manitoba, Ontarioand Québec;

3.24 to the knowledge of the Applicant, Ensercois not in default of any requirements of the Legislation;

3.25 on March 19, 2002 the Applicant and Ensercoobtained under Section 192 of the CBCA an interim order (the"Interim Order") from the Court of Queen's Bench ofAlberta specifying, among other things, certain procedures andrequirements to be followed in connection with the calling andconduct of the Enserco Meeting (as defined below) and the completionof the Arrangement;

3.26 the Arrangement is subject to approvalof the holders of Enserco Shares ("Shareholders"),and the holders of Enserco Options, Warrants and Shares PurchaseRights (collectively, the "Enserco Security Holders")and the Court of Queen's Bench of Alberta by virtue of a finalorder (the "Final Order") approving the Arrangement;

3.27 a meeting of the Enserco Security Holders(the "Enserco Meeting") has been scheduled for April24, 2002 to consider and, if deemed appropriate, approve theArrangement;
3.28 an information circular dated on or about March 20, 2002(the "Circular") prepared in accordance with the Legislationwill be mailed to the Enserco Security Holders in connectionwith the Enserco Meeting and filed with each of the DecisionMakers concurrently therewith;

3.29 the Circular contains or incorporates byreference prospectus-level disclosure concerning the Arrangementand the business and affairs of both Nabors and Enserco as wellas certain historical financial information regarding both Naborsand Enserco;

3.30 at the Enserco Meeting, each Shareholderwill be entitled to one vote for each Enserco Share held, andeach holder of Options, Warrants and Share Purchase Rights willbe entitled to one vote for each Enserco Share such holder wouldreceive on a valid exercise thereof;

3.31 upon receipt of the approval of the EnsercoSecurity Holders at the Enserco Meeting, the Applicant and Ensercowill thereafter apply to the Court of Queen's Bench for theFinal Order;

3.32 subject to the satisfaction or waiver ofall closing conditions, including the receipt of all regulatoryapprovals, it is currently anticipated that the Arrangementwill be completed on or about April 26, 2002;

3.33 under the terms of the Arrangement, atthe effective time (the "Effective Time") on the dateshown on the registration statement issued upon filing Articlesof Arrangement under the CBCA giving effect to the Arrangement(the "Effective Date"):

3.33.1 each Enserco Share that is not held byeither a Shareholder who has exercised its dissent right andwho is ultimately entitled to be paid the fair value of itsEnserco Shares, or by Nabors or any affiliate thereof, willbe transferred to, and acquired by, Canco, in exchange for,at the Shareholder's election (or deemed election): (a) Cdn.$15.50 plus simple interest thereon at the rate of 6% per annumin respect of the period from, but not including, February 25,2002 to and including the Effective Date (the "Per SharePrice"); or (b) such number of fully paid and non-assessableExchangeable Shares as is determined pursuant to an ExchangeRatio (as defined in paragraph 3.34);

3.33.2 each Enserco Share in respect of whichno election or no effective election has been made by the Shareholder(other than Enserco Shares held by (i) a Shareholder who hasexercised its dissent right and is ultimately entitled to bepaid the fair market value of its Enserco Shares, or (ii) Ensercoor any affiliate) will be transferred to, and acquired by, Cancowithout any act or formality on the part of the Shareholderor Canco, free and clear of all liens, claims and encumbrances,and the Shareholder shall be deemed to have elected to receivein exchange therefore the Per Share Price in cash;

3.33.3 each Warrant that has not been duly exercisedprior to the Effective Time shall thereafter represent the rightto purchase that number of Nabors Shares equal to the numberof Enserco Shares subject to such Warrant multiplied by theExchange Ratio (as defined in paragraph 3.34). The exerciseprice per Nabors Share under the Warrant shall equal the exerciseprice per Enserco Share of such Warrant immediately prior tothe Effective Time divided by the Exchange Ratio. If the foregoingcalculation results in the Warrant being exercisable for a fractionof a Nabors Share, then the number of Nabors Shares subjectto such Warrant shall be rounded down to the next whole numberof Nabors Shares and the total exercise price for the Warrantshall be reduced by the exercise price of the fractional NaborsShare. The term to expiry, conditions to and manner of exercisingand all other terms and conditions of such Warrant will be unaffectedexcept to the extent necessary to reflect the changes to thesecurities acquirable upon exercise and to the exercise price,and any document or agreement previously evidencing such Warrantshall thereafter evidence and be deemed to evidence such Warrantafter the Effective Time; and

3.33.4 each Option and each Share Purchase Rightthat has not been duly exercised or surrendered for terminationprior to the Effective Time shall be terminated and, in considerationfor such termination, each holder of such Option or Share PurchaseRight shall receive cash, without interest, in an amount equalto the greater of: (A) the positive difference, if any, between(i) the product of the Per Share Price and the number of EnsercoShares that are subject to issuance upon the exercise of suchOption or Share Purchase Right, as the case may be, and (ii)the cash exercise price of such Option or Share Purchase Right;and (B) $0.10, for each Enserco Share subject to such issuance;

3.34 the "Exchange Ratio" will bedetermined by dividing the Per Share Price by the simple averageof the weighted average trading price of Nabors Shares on theAMEX over the 10 consecutive trading days ending on the thirdBusiness Day prior to the date of the Enserco Meeting (the "MeasurementPeriod") using a currency exchange rate of Canadian dollarsto U.S. dollars equal to the average of the noon buying ratesin New York City for cable transfers in Canadian dollars ascertified for customs purposes by the Federal Reserve Bank ofNew York for each trading day in the Measurement Period (the"Nabors Average Price"). The "Simple Averageof the Weighted Average Trading Price" is determined bydividing the aggregate sale price of all Nabors Shares soldon the AMEX during the Measurement Period by the total numberof Nabors Shares sold;

3.35 as an alternative to the exchange contemplatedby paragraph 3.33.1 each Shareholder shall be entitled to transferits Enserco Shares to a newly incorporated corporation (a "Holdco")and transfer the issued and outstanding shares thereof (collectively,"Holdco Shares") to Canco (the "Holdco Alternative"),provided that on or prior to and as of the Effective Date:

3.35.1 the Shareholder is a resident of Canadafor the purposes of the Income Tax Act (Canada) (the "ITA");

3.35.2 Holdco is incorporated no earlier than60 days prior to the Effective Date, under the CBCA;

3.35.3 the Shareholder transfers its EnsercoShares to Holdco solely in consideration for the Holdco Shares;

3.35.4 Holdco has no indebtedness or liabilitiesand owns no assets other than the Enserco Shares;

3.35.5 the Shareholder indemnifies Nabors, Enserco,Canco and Callco for any and all liabilities of Holdco (otherthan tax liabilities of Holdco that arise solely as a resultof the tax status of Acquiror, Canco or Callco as a "financialinstitution" for purposes of the ITA) in a form satisfactoryto Nabors in its sole discretion, and such Shareholder eitherhas net assets as reflected on its audited financial statementsfor its most recently ended fiscal year which are satisfactoryto Nabors or provides Nabors with security satisfactory to Naborsin respect of such Shareholder's indemnification obligationsas set out above;

3.35.6 prior to the Effective Date, Holdco (i)declares one or more stock dividends which (if the Holdco Sharesare to be acquired by Canco) may be in the form of preferredshares of Holdco that are converted into common shares of Holdcoprior to the Effective Date; (ii) increases the stated capitalof the Holdco Shares; or (iii) (if the Holdco Shares are tobe acquired by Canco) declares one or more cash dividends, providedthat such cash is used to subscribe, directly or indirectly,for shares of Holdco;

3.35.7 on the Effective Date, Holdco has noissued shares outstanding other than the Holdco Shares and suchshares will be owned by the Shareholder;

3.35.8 on or prior to the Effective Date, Holdcohas never entered into any transaction (or conducted any businessor operations or engaged in any activity) other than those describedherein or such other transactions as are necessary to facilitatethose transactions described herein with Nabor's consent, actingreasonably;

3.35.9 other than as provided in 3.35.6 above,Holdco will not declare or pay any dividends or other distributions;

3.35.10 the Shareholder shall prepare and fileall income tax returns of its Holdco in respect of the taxationyear-end of such Holdco ending immediately prior to the acquisitionof such Holdco Shares by Canco subject to Nabor's right to approveall such returns as to form and substance;

3.35.11 the Shareholder provides Enserco andNabors with copies of all documents necessary to effect thetransactions contemplated in this Section at least ten daysprior to the Effective Date which documents must be approvedby both Enserco and Nabors in their sole discretion; and

3.35.12 the Shareholder and its Holdco executea share purchase agreement in the form required by Nabors, actingreasonably, providing for, among other things, the sale of theHoldco Shares to Canco;

3.36 to the extent a Shareholder elects to utilizethe Holdco Alternative, at the Effective Time, each Holdco Sharewill be transferred to, and acquired by, Canco without any actor formality on the part of the holder of such Holdco Shareor the entity which acquires such Holdco Share, free and clearof all liens, claims and encumbrances, in exchange for, at theholder's election (or deemed election):

3.36.1 the Per Share Price in cash withoutadditional interest; or
3.36.2 such number of fully paid and non-assessable ExchangeableShares as is equal to the Exchange Ratio, in each case multipliedby a fraction having as its numerator the number of EnsercoShares held by the Holdco and as its denominator the numberof issued and outstanding Holdco Shares of the Holdco;

3.37 no fractions of Exchangeable Shares willbe issued in exchange for Enserco Shares pursuant to the Arrangementand such fractional interests will not entitle the owner toexercise any rights as a shareholder of Canco or Nabors. Inlieu of any fractional securities, each holder otherwise entitledto a fraction of an Exchangeable Share will be entitled to receivea cash payment equal to the product of the fractional interestand the Nabors Average Price;

3.38 as a result of the foregoing, upon thecompletion of the Arrangement, all of the issued and outstandingEnserco Shares will be held directly or indirectly by Naborsand its affiliates;

3.39 it is expected that the Enserco Shareswill be delisted from the TSE on or after the Effective Date.Enserco will continue to be a reporting issuer or the equivalentthereof, absent exemptive relief from the securities regulatoryauthority or regulator therein, in Alberta, British Columbia,Saskatchewan, Manitoba, Ontario and Québec. It is expectedthat Enserco will apply for such exemptive relief upon completionof the Arrangement;

3.40 Nabors will apply to the AMEX to list theNabors Shares to be issued in exchange for the ExchangeableShares and upon exercise of the Warrants;

3.41 the rights, privileges, conditions andrestrictions attaching to the Exchangeable Shares (the "ExchangeableShare Provisions"), the terms and conditions of the votingand exchange trust agreement to be entered into between Nabors,Canco and a Canadian trust company (the "Trustee")in connection with the Arrangement (the "Voting and ExchangeTrust Agreement") and the terms and conditions of the supportagreement to be entered into between Nabors, Callco and Cancoin connection with the Arrangement (the "Support Agreement")are described in the Circular, and are summarized below;

3.42 the Exchangeable Shares will be issuedby Canco and will be exchangeable at any time after the EffectiveDate (subject to earlier redemption in accordance with the Arrangement),on a one-for-one basis, at the option of the holder, for NaborsShares. An Exchangeable Share will provide a holder with economicterms and voting rights, which are, as nearly as practicable,equivalent to those of a Nabors Share. Shareholders who areresidents of Canada and who receive Exchangeable Shares underthe Arrangement may, upon filing the necessary tax elections,obtain a full or partial deferral of taxable capital gains forCanadian federal income tax purposes in certain circumstances.In addition, provided the Exchangeable Shares are listed ona prescribed stock exchange (which currently includes the TSE),they will be "qualified investments" for certain investorsand will not constitute "foreign property", in eachcase, under the ITA;

3.43 subject to applicable law and the exerciseof the Retraction Call Right (as defined and described below),a holder of Exchangeable Shares will be entitled at any timefollowing the Effective Time to require Canco to redeem anyor all of the Exchangeable Shares registered in the name ofsuch holder for an amount per share equal to the current marketprice of a Nabors Share (as adjusted, if necessary) (the "ExchangeableShare Price") on the last Business Day prior to the datethe holder desires Canco to redeem the Exchangeable Shares (the"Retraction Price"), which will be fully paid andsatisfied by the delivery for each Exchangeable Share of oneNabors Share and any dividends payable or deliverable on suchExchangeable Share. When a holder of Exchangeable Shares makesa retraction request (a "Retraction Request"), Callcowill have an overriding call right (the "Retraction CallRight") to purchase all but not less than all of the ExchangeableShares subject to the Retraction Request in exchange for theRetraction Price, pursuant to the Exchangeable Share Provisions;

3.44 subject to applicable law and the RedemptionCall Right (as defined and described below), Canco:

3.44.1 may at any time on or after the fifthanniversary of the Effective Date; or

3.44.2 will at any time, provided there areless than 1,500,000 Exchangeable Shares outstanding (excludingthose held by Nabors and its affiliates) or on the occurrenceof certain other events as described in the Arrangement,

redeem all but not less than all of the thenoutstanding Exchangeable Shares (the "Redemption Date")for an amount per share equal to the Exchangeable Share Priceon the last Business Day prior to the Redemption Date (the "RedemptionPrice"), which will be fully paid and satisfied by thedelivery for each Exchangeable Share of one Nabors Share andany dividends payable or deliverable on such Exchangeable Share.Callco will have an overriding right (the "Redemption CallRight") to purchase on the Redemption Date all but notless than all of the Exchangeable Shares then outstanding (otherthan Exchangeable Shares held by Nabors and its affiliates)for a purchase price per share equal to the Redemption Price,as set out in the Arrangement;

3.45 except as required by law or under theSupport Agreement, Voting and Exchange Trust Agreement or theterms of the Exchangeable Share Provisions, the holders of ExchangeableShares will not be entitled to receive notice of, or attendor vote at, any meeting of shareholders of Canco;

3.46 on the Effective Date, Nabors, Canco andthe Trustee will enter into the Voting and Exchange Trust Agreementpursuant to which Nabors will issue to the Trustee a numberof Nabors Shares equal to the number of Exchangeable Sharesissued and outstanding (other than Exchangeable Shares heldby Nabors and its affiliates), which will be held by the Trusteeto enable the holders of Exchangeable Shares to have votingrights that are equivalent to those of holders of Nabors Shares.Each registered holder of Exchangeable Shares (other than Naborsand its affiliates) (a "Beneficiary") on the recorddate for any meeting at which shareholders of Nabors are entitledto vote will be entitled to instruct the Trustee to vote oneNabors Share held by the Trustee for each Exchangeable Shareheld by the Beneficiary. Pursuant to the Support Agreement,the Exchangeable Shares are subject to adjustment or modificationin the event of a stock split or other change to the capitalstructure of Nabors so as to maintain the initial one-to-onerelationship between the Exchangeable Shares and the NaborsShares;

3.47 the Exchangeable Share Provisions willprovide that each Exchangeable Share will entitle the holderto dividends from Canco payable at the same time as, and thesame as or economically equivalent to, each dividend paid byNabors on a Nabors Share;

3.48 on the liquidation, dissolution or winding-upof Canco or any other distribution of the assets of Canco amongits shareholders for the purpose of winding-up its affairs,holders of the Exchangeable Shares will have, subject to applicablelaw and the overriding right of Callco (the "LiquidationCall Right") to purchase all but not less than all of theoutstanding Exchangeable Shares (other than Exchangeable Sharesheld by Nabors and its affiliates) from the holders of ExchangeableShares on the effective date of such liquidation, dissolutionor winding-up (the "Liquidation Date") for a purchaseprice per share equal to the Exchangeable Share Price on thelast Business Day prior to the Liquidation Date (the "LiquidationAmount"), preferential rights to receive from Canco theLiquidation Amount for each Exchangeable Share held, which willbe fully paid and satisfied by the delivery of one Nabors Shareand any dividends payable or deliverable on such ExchangeableShare;

3.49 on the liquidation, dissolution or winding-upof Canco (or when any other insolvency event described in theCircular occurs, and while it continues) each holder of ExchangeableShares (other than Nabors and its affiliates) will be entitledto instruct the Trustee to exercise the exchange right (the"Exchange Right") granted to the Trustee in the Votingand Exchange Trust Agreement to require Nabors to purchase fromsuch holder all or any part of the Exchangeable Shares heldby the holder for a purchase price per share equal to the ExchangeableShare Price, which will be fully paid and satisfied by the deliveryof one Nabors Share and any dividends payable or deliverableon such Exchangeable Share;

3.50 in order for the holders of the ExchangeableShares to participate on a pro rata basis with the holders ofNabors Shares in the distribution of assets of Nabors in connectionwith any voluntary or involuntary liquidation, dissolution orwinding-up proceedings with respect to Nabors or to effect anyother distribution of the assets of Nabors among its shareholdersfor the purpose of winding up its affairs (a "LiquidationEvent"), immediately prior to the Liquidation Event eachExchangeable Share will, pursuant to the automatic exchangeright granted to the Trustee in the Voting and Exchange TrustAgreement, automatically be exchanged for Nabors Shares equalto the Exchangeable Share Price under the Voting and ExchangeTrust Agreement;

3.51 the Exchangeable Shares will have a preferenceover the common shares of Canco and any other shares rankingjunior to the Exchangeable Shares with respect to the paymentof dividends and the distribution of assets in the event ofa liquidation, dissolution or winding-up of Canco, whether voluntaryor involuntary, or any other distribution of the assets of Cancoamong its shareholders for the purpose of winding-up its affairs;

3.52 on the Effective Date, Nabors, Canco andCallco will enter into the Support Agreement which will providethat Nabors will not declare or pay dividends on the NaborsShares unless Canco simultaneously declares or pays, as thecase may be, an equivalent dividend or other distribution economicallyequivalent thereto on the Exchangeable Shares, and that Naborswill ensure that Canco and Callco will be able to honour theredemption and retraction rights and dissolution entitlementsthat are attributes of the Exchangeable Shares under the ExchangeableShare Provisions and the Redemption Call Right, Retraction CallRight and Liquidation Call Right. The Support Agreement willalso provide that, without the prior approval of Canco and theholders of the Exchangeable Shares, Nabors will not issue ordistribute Nabors Shares, securities exchangeable for or convertibleinto or carrying rights to acquire Nabors Shares, rights, optionsor warrants to subscribe for or to purchase Nabors Shares, evidencesof indebtedness or other assets of Nabors to the holders ofNabors Shares, nor will Nabors subdivide, re-divide, reduce,combine, consolidate, reclassify or otherwise change the NaborsShares unless the same or an economically equivalent distributionor change is simultaneously made to the Exchangeable Shares;

3.53 the Arrangement involves or may involve,a number of trades and/or distributions of securities (collectively,the "Trades"), in respect of which there may be noregistration or prospectus exemptions available under the Legislation,including, without limitation, the issuance of the ExchangeableShares and replacement Warrants; the issuance of Nabors Sharesupon the exchange of Exchangeable Shares and the issuance ofNabors Shares upon the exercise of Warrants; the creation andexercise of all the various rights under the Voting and ExchangeTrust Agreement, Support Agreement and Exchangeable Share Provisions;and the issuance of shares of Nabors and its affiliates (includingCanco and Callco) in connection with the Arrangement;

3.54 the fundamental investment decision tobe made by an Enserco Security Holder will be made at the timewhen such holder votes in respect of the Arrangement. As a resultof this decision, unless Exchangeable Shares are sold in themarket, a holder (other than a dissenting Shareholder) willultimately receive Nabors Shares in exchange for the EnsercoShares held by such holder. The use of the Exchangeable Shareswill provide certain Canadian tax benefits to certain Canadianholders but will otherwise be, as nearly as practicable, theeconomic and voting equivalent of the Nabors Shares. As such,all subsequent exchanges of Exchangeable Shares are in furtheranceof the holder's initial investment decision;

3.55 as a result of the economic and votingequivalency in all material respects between the ExchangeableShares and the Nabors Shares, holders of Exchangeable Shareswill have an equity interest determined by reference to Nabors,rather than Canco. Dividend and dissolution entitlements willbe determined by reference to the financial performance andcondition of Nabors, not Canco. Accordingly, it is the informationrelating to Nabors, not Canco, that will be relevant to theholders of Exchangeable Shares;

3.56 the Circular discloses that Nabors andCanco have applied for relief from the Registration Requirementand Prospectus Requirement, the Continuous Disclosure Requirementsand Insider Reporting Requirements for insiders of Canco. TheCircular also identifies the limitations imposed on any resaleof Exchangeable Shares or Nabors Shares and the continuous disclosurethat will be provided to holders of Exchangeable Shares if therequested relief is granted;

3.57 following completion of the Arrangement,assuming an Exchange Ratio of 0.2808 (based upon the closingprice of Nabors Shares, and the Canadian dollar exchange ratein effect, on the day immediately prior to the Arrangement beingpublicly announced), and assuming that Exchangeable Shares areconsidered to be Nabors Shares, it is expected that the beneficialholders of Nabors Shares resident in Canada will hold approximately4.3% of the issued and outstanding Nabors Shares calculatedbased upon the number of beneficial and registered Shareholdersand registered holders of Nabors Shares who are residents ofCanada and on the assumption that the consideration to be paidby Nabors to Shareholders pursuant to the Arrangement will consistentirely of Exchangeable Shares (other than in respect of approximately20.5% of Enserco Shares acquired by Nabors pursuant to prioragreement for cash);

3.58 following completion of the Arrangement,Nabors will concurrently send to holders of Exchangeable Sharesor Nabors Shares resident in the Jurisdictions all disclosurematerial it sends to holders of Nabors Shares resident in theUnited States pursuant to the 1934 Act;

4. AND WHEREAS under the System, thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

5. AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

6. AND WHEREAS the Decision of the DecisionMakers pursuant to the Legislation is that:

6.1 the Registration Requirement and ProspectusRequirement shall not apply to the Trades;

6.2 the first trade in Exchangeable Shares acquiredin connection with the Arrangement shall be deemed to be a distributionor primary distribution to the public under the Legislationof the Jurisdiction in which the trade takes place, unless:

6.2.1 except in Quebec,
6.2.1.1 the conditions in subsections (3) or (4) of Section2.6 of Multilateral Instrument 45-102 Resale of Securities ("MI45-102") are satisfied; and provided further that, in determiningthe period of time that Canco has been a reporting issuer forthe purposes of Section 2.6 of MI 45-102, the period of timethat Enserco has been a reporting issuer may be included; or

6.2.1.2 where such first trade is a "controldistribution" as such term is defined in MI 45-102, suchtrade is made in compliance with Sections 2.8 of MI 45-102;and provided further that, in determining the period of timethat Canco has been a reporting issuer for the purposes of Section2.8 of MI 45-102, the period of time that Enserco has been areporting issuer may be included; and the period of time thata holder of Exchangeable Shares (or an affiliated or controlledentity of such holder) held Enserco Shares shall be includedin the calculation of the hold period);

6.2.2 in Québec,

6.2.2.1 Canco or one of the parties to the Arrangement(including, for greater certainty, Enserco) is and has beena reporting issuer in Québec in good standing for thetwelve months immediately preceding the first trades (and forthe purpose of determining the period of time that the issueror one of the parties to the Arrangement has been a reportingissuer in Québec, the period of time that Enserco wasa reporting issuer may be included);

6.2.2.2 no unusual effort is made to preparethe market or to create a demand for the Exchangeable Shares;

6.2.2.3 no extraordinary commission or considerationis paid to a person or company in respect of the trade; and

6.2.2.4 if the selling Exchangeable Share holderis an insider or officer of Nabors or Canco, the selling ExchangeableShare holder has no reason to believe that Nabors or Canco arein default of the Legislation;

6.3 the first trade in Nabors Shares acquiredin connection with the Arrangement shall be deemed to be a distributionor primary distribution to the public under the Legislationunless, at the time of the trade:

6.3.1 except in Québec,

6.3.1.1 if Nabors is a reporting issuer in anyJurisdiction listed in Appendix B to MI 45-102 other than Québec,the conditions in subsections (3) or (4) of Section 2.6 of MI45-102 are satisfied; and for the purpose of determining theperiod of time that Nabors has been a reporting issuer underSection 2.6, the period of time that Enserco has been a reportingissuer may be included; or

6.3.1.2 if Nabors is not a reporting issuerin any Jurisdiction other than Québec, such first tradeis made through an exchange, or a market, outside of Canada;and

6.3.2 in Québec,

6.3.2.1 Nabors or one of the parties to theArrangement (including, for greater certainty, Enserco) is andhas been a reporting issuer in Québec in good standingfor the twelve months immediately preceding the first trades(and for the purpose of determining the period of time thatthe issuer or one of the parties to the Arrangement has beena reporting issuer in Québec, the period of time thatEnserco was a reporting issuer may be included);

6.3.2.2 no unusual effort is made to preparethe market or to create a demand for the Nabors Shares;

6.3.2.3 no extraordinary commission or considerationis paid to a person or company in respect of the trade; and

6.3.2.4 if the selling Nabors Share holder isan insider or officer of Nabors or Canco, the selling NaborsShare holder has no reason to believe that Nabors or Canco arein default of the Legislation;

6.4 the Continuous Disclosure Requirements shallnot apply to Canco so long as:

6.4.1 Nabors sends concurrently to all holdersof Exchangeable Shares or Nabors Shares resident in Canada alldisclosure material furnished to holders of Nabors Shares residentin the United States, including, without limitation, copiesof its proxy solicitation materials and its annual financialstatements, which financial statements will be prepared solelyin accordance with US GAAP;

6.4.2 Nabors files with each Decision Makercopies of all documents required to be filed by it with theSEC under the 1934 Act, and such filings are made under Canco'sSEDAR profile and the filing fees which would otherwise be payableby Canco in connection with such filings are paid;

6.4.3 Nabors complies with the requirementsof the AMEX in respect of making public disclosure of materialinformation on a timely basis and forthwith issues in Canadaand files with the Decision Makers any press release that disclosesa material change in Nabors' affairs;

6.4.4 Canco complies with the material changereporting requirements in respect of material changes in theaffairs of Canco that would be material to holders of ExchangeableShares but would not be material to holders of Nabors Shares;

6.4.5 Nabors includes in all future mailingsof proxy solicitation materials (if any) to holders of ExchangeableShares a clear and concise statement explaining the reason forthe mailed material being solely in relation to Nabors and notin relation to Canco, such statement to include a referenceto the economic equivalency between the Exchangeable Sharesand the Nabors Shares and the right to direct voting at Nabors'shareholders' meetings pursuant to the Voting and Exchange TrustAgreement (without taking into account tax effects);

6.4.6 Nabors remains the direct or indirectbeneficial owner of all of the issued and outstanding votingsecurities, including, without limitation, common shares ofCanco; and

6.4.7 Canco does not issue any securities tothe public other than the Exchangeable Shares in connectionwith the Arrangement; and

6.5 the Insider Reporting Requirements, andthe requirement to file an insider profile under National Instrument55-102 System for Electronic Disclosure by Insiders, shall notapply to Canco and each insider of Canco, so long as:

6.5.1 such insider of Canco does not receiveor have access to, in the ordinary course, information as tomaterial facts or material changes concerning Nabors beforethe material facts or material changes are generally disclosed;and

6.5.2 such insider of Canco is not a directoror senior officer of Nabors, or a "major subsidiary"of Nabors, as such term is defined in National Instrument 55-101Exemptions from Certain Insider Reporting Requirements as ifNabors were a reporting issuer.

April 18th, 2002.

"Glenda A. Campbell"      "Jerry A. Bennis"