Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - corporation deemed to have ceased to bea reporting issuer after all of its outstanding securities acquiredby another corporation pursuant to an arrangement agreement.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,s. 83.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA AND ONTARIO

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

SOUTHWARD ENERGY LTD.

 

MRRS DECISION DOCUMENT

1. WHEREAS, the local securities regulatoryauthority or regulator (the "Decision Maker") inAlberta and Ontario (the "Jurisdictions") has receivedan application from Southward Energy Ltd. ("Southward")for a decision under the securities legislation of the Jurisdictions(the "Legislation") that Southward be deemed tohave ceased to be a reporting issuer under the Legislation;

2. AND WHEREAS under the Mutual Reliance ReviewSystem for Exemptive Relief Applications (the "System")the Alberta Securities Commission is the principal regulatorfor this application;

3. AND WHEREAS Southward has represented tothe Decision Maker that:

3.1 Southward was incorporated pursuantto the Business Corporations Act (Alberta) (the "ABCA")on April 24, 1981;

3.2 Southward's head office and principaladdress is located in Calgary, Alberta;

3.3 Southward is a reporting issuer in BritishColumbia, Alberta and Ontario;

3.4 the authorized share capital of Southwardconsists of an unlimited number of common shares (the "CommonShares"), as of May 9, 2003;

3.5 as of May 9, 2003, 24,513,825.66667Common Shares are issued and outstanding;

3.6 the Common Shares were delisted fromthe Toronto Stock Exchange on May 2, 2003 and no securitiesof Southward are listed or quoted on any exchange or market;

3.7 Southward has made a concurrent applicationto the British Columbia Securities Commission pursuant tosection 88 of the Securities Act (British Columbia)and section 2 of the British Columbia Instrument 11-502,that Southward be deemed to have ceased to be a reportingissuer on May 19, 2003;

3.8 pursuant to an arrangement agreementdated March 16, 2003 between Southward Energy Ltd. and 1022971Alberta Ltd. ("1022971"), (the "ArrangementAgreement"), the parties thereto agreed, among otherthings, to take all reasonable action necessary to giveeffect to a Plan of Arrangement (the "Arrangement")under section 193 of the ABCA;

3.9 at the special meeting of shareholdersof Southward (the "Securityholders") held on April28, 2003, the Securityholders of Southward approved theArrangement;

3.10 the Arrangement was approved by FinalOrder of the Court of Queen's Bench of Alberta on April28, 2003, and on the filing of Articles of Arrangement underthe ABCA, the Arrangement was made effective on April 30,2003;

3.11 under the Arrangement, each issuedand outstanding Common Share (other than Common Shares heldby dissenting Securityholders and non-board lot holders)was acquired by 1022971 for $4.77 per Common Share;

3.12 as a result of the Arrangement, 1022971became, and is currently, the sole securityholder of Southward;

3.13 Southward has no securities, includingdebt securities, outstanding, other than the Common Shares;

3.14 Southward does not intend to seek publicfinancing by way of an offering of its securities;

3.15 Southward is not in default of thesecurities legislation of the Jurisdictions;

4. AND WHEREAS under the System, the MRRSDecision 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 meetthe Decision has been met;

6. THE DECISION of the Decision Maker underthe Legislation is that Southward is deemed to have ceasedto be a reporting issuer under the Legislation.

May 27, 2003.

"Patricia M. Johnston"