Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - relief from requirement to offer identicalconsideration to all shareholders. U.S. Shareholders hold approximately0.55% of the shares of the target company. Delivery of offerorshares to the target shareholders would be overly burdensome.Instead of U.S. target shareholders receiving securities asconsideration for the target shareholders by them, they willreceive the cash proceeds from the sale of such securities bya depository.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 97(1) and 104(2)(c).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTAAND ONTARIO

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

TUSK ENERGY INC.

AND

IN THE MATTER OF

DEL ROCA ENERGY LTD.

 

MRRS DECISION DOCUMENT

1. WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") ineach of British Columbia, Alberta, and Ontario (the "Jurisdictions")has received an application from TUSK Energy Inc. ("TUSK")for a decision under the securities legislation of the Jurisdictions(the "Legislation") exempting TUSK from the requirementcontained in the Legislation to offer holders of class ofsecurities subject to a take-over bid identical consideration(the "Identical Consideration Requirement") in connectionwith an offer to purchase the common shares of Del Roca EnergyLtd ("Del Roca");

2. AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System")the Alberta Securities Commission is the principal regulatorfor this application

3. AND WHEREAS, unless otherwise defined,the terms used herein shall have the meanings set out in NationalInstrument 14-101 Definitions;

4. AND WHEREAS TUSK has represented to theDecision Makers that:

4.1 TUSK is a corporation incorporated underthe laws of Alberta;

4.2 the head office of TUSK is in Calgary,Alberta;

4.3 TUSK is a reporting issuer in each ofthe Jurisdictions;

4.4 the authorized capital of TUSK consistsof an unlimited number of common shares (the "TUSKShares") and unlimited number of first and second preferredshares issuable in series ( the "Preferred Shares");

4.5 as of December 4, 2002, there were 17,607,474TUSK Shares and no Preferred Shares outstanding;

4.6 the TUSK Shares are listed and postedfor trading on the Toronto Stock Exchange;

4.7 TUSK is not in default of any requirementunder the Legislation;

4.8 Del Roca is a corporation incorporatedunder the laws of Alberta;

4.9 the head office of Del Roca is in Calgary,Alberta;

4.10 Del Roca is a reporting issuer in eachof the Jurisdictions;

4.11 the authorized capital of Del Rocaincludes an unlimited number of common shares (the "DeRoca Shares") and an unlimited number of preferredshares ("Del Roca Preferred Shares");

4.12 as of December 4, 2002, there were20,306,893 Del Roca Shares issued and outstanding and noDel Roca Preferred Shares outstanding;

4.13 the Del Roca Shares are listed andposted for trading on the TSX Venture Exchange Inc.;

4.14 to the knowledge of TUSK, Del Rocais not in default of any requirement under the Legislation;

4.15 TUSK has made a take-over bid for allof the Del Roca Shares currently outstanding or issuableupon the exercise of outstanding options or warrants (the"Bid");

4.16 under the Bid, holders of Del RocaShares may elect to receive for each Del Roca Share held:

4.16.1 0.25 of one TUSK Share;

4.16.2 $0.64 cash; or

4.16.3 a combination of cash and TUSKShares;

4.17 a maximum of 2.8 million TUSK Sharescan be issued under the Bid;

4.18 to the best information of TUSK, thereare 6 registered holders of Del Roca Shares (the "U.S.Shareholders") resident in the United States of America(the "United States");

4.19 to the best information of TUSK, theU.S. Shareholders currently hold a total of 110,692 TUSKShares, representing 0.55% of the total number of outstandingDel Roca Shares;

4.20 TUSK is not eligible to use the multi-jurisdictionaldisclosure system adopted by the United States;

4.21 any TUSK Shares that might be issuedunder the Bid to the U.S. Shareholders will not be registeredor otherwise qualified for distribution under the SecuritiesAct of 1933 in the United States;

4.22 the delivery of TUSK Shares to theU.S. Shareholders would require the filing of a registrationstatement and subject TUSK to continuous disclosure requirementswhich would be overly burdensome to TUSK;

4.23 to the extent that U.S. Shareholderselect to receive TUSK Shares in exchange for their Del RocaShares, TUSK proposes to deliver the TUSK Shares to CIBCMellon Trust company, who will sell the TUSK Shares on behalfof the U.S. Shareholders and deliver to them their pro ratashare of the proceeds of such sale, less commissions andapplicable withholding taxes;

4.24 any sale of TUSK Shares described inparagraph 4.23 will completed within five trading days ofthe date that TUSK takes up the Del Roca Shares tenderedby the applicable U.S. Shareholders under the Bid;

4.25 any sale of TUSK Shares described inparagraph 4.23 will be done in a manner intended to maximizethe consideration to be received from the sale by the applicableU.S. Shareholder and minimize any adverse impact of thesale on the market for the TUSK shares;

4.26 except to the extent that relief fromthe Identical Consideration Requirement is granted herein,the Bid is being made in compliance with the requirementsunder the Legislation concerning take-over bids;

5. AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

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

7. THE DECISION of the Decision Makers underthe Legislation is that, in connection with the Bid, TUSKis exempt from the Identical Consideration Requirement insofaras U.S. Shareholders who would otherwise receive TUSK Sharesunder the Bid receive instead cash proceeds from the saleof those TUSK Shares in accordance with the procedures setout in paragraph 4.23.

January 24, 2003.

"Eric T. Spink"                    "ThomasG. Cooke"