Peregrine Energy Ltd. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - relief from the requirement to file historical financial information in a Business Acquisition Report.

Applicable Ontario Statutory Provisions

National Instrument 51-102, Continuous Disclosure Obligations, subsection 13.1.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA, ONTARIO AND QUÉBEC

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

PEREGRINE ENERGY LTD.

(formerly TESORO ENERGY CORP.)

MRRS DECISION DOCUMENT

1. WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, Ontario and Québec (the "Jurisdictions") has received an application from Peregrine Energy Ltd. ("Peregrine") for a decision, under the securities legislation of the Jurisdictions (the "Legislation"), or in Québec by a revision of the general order that will provide the same result as an exemption order, that Peregrine be exempt from the requirement in the Legislation to include the historical financial statements for the period ending December 31, 2002 in a Business Acquisition Report ("BAR") relating to Tesoro Energy Corp.'s purchase (the "Purchase") of certain oil and gas assets (the "Assets") from Fairborne Energy Ltd. ("Fairborne").

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

3. AND WHEREAS, unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions;

4. AND WHEREAS Peregrine has represented to the Decision Makers that:

4.1 Peregrine has been formed by amalgamation under the laws of the Province of Alberta and Peregrine's head office is located in Calgary, Alberta;

4.2 Peregrine is a reporting issuer in each of British Columbia, Alberta, Ontario and Quebec, is not in default of the securities legislation in any of these jurisdictions and its common shares are listed on the Toronto Stock Exchange;

4.3 Peregrine is the successor by amalgamation to Tesoro Energy Corp. ("Tesoro") pursuant to an amalgamation agreement between Tesoro and Peregrine Energy Ltd. entered into on May 31, 2004 and effective July 21, 2004, whereby the resulting entity carries on business as "Peregrine Energy Ltd."

4.4 Tesoro purchased the Assets from Fairborne on June 7, 2004;

4.5 Pursuant to NI 51-102, Tesoro is required to file the BAR in connection with the purchase of the Assets on or before August 21, 2004;

4.6 the acquisition of the Assets constituted a "significant acquisition" by Tesoro within the meaning of section 8.3 of NI 51-102. Accordingly, Peregrine/Tesoro is required to include in the BAR, among other things:

(a) the operating statements respecting the Assets and the auditors report thereon as at and for the fiscal year ended December 31, 2002, (the "Operating Statements");

4.7 The accounting software and computer systems Fairborne used to generate the historical financial records respecting the Assets is no longer accessible as Fairborne has switched to a new computer accounting system, as such, Tesoro's Auditors have been unable to review the background information to the financial statements, and accordingly are unable to give an appropriate Auditors report respecting the Operating Statements pertaining to the Assets for the year ended December 31, 2002. In addition, the financial information which does exist for the time period in question does not relate specifically to the Assets, and would be of little value to the public.

4.8 Peregrine will include in the BAR:

(a) the audited financial statements for the year ended December 31, 2003, and interim financial statements for the period ended June 30, 2004;

(b) in lieu of audited financial statements for the year ended December 31, 2002, the available summary information for that period pertaining to the properties acquired from Fairborne; and

(c) the reserve information required by the Legislation;

(d) through c being, collectively, the "Alternate Disclosure")

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

6. AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

7. THE DECISION of the Decision Makers under the Legislation is that Peregrine is exempt from the Requirement to disclose the financial records required by NI 51-102 in respect of the Assets for the period ended December 31, 2002, provided the Alternate Disclosure is included in the BAR.

August 23, 2004.

"Mavis Legg"