Naftex Energy Corporation - s. 144

Headnote

Section 144 - Revocation of cease trade order - Issuer subject to cease trade order as a result of its failure to file annual and interim financial statements -- partial revocation previously granted to permit mailing of circular - Issuer has brought filings up to date and is otherwise not in default of Ontario securities law.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127(1), 127(5), 144.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, C.S.5, AS AMENDED (THE ACT)

AND

IN THE MATTER OF

NAFTEX ENERGY CORPORATION

ORDER

(Section 144)

WHEREAS Naftex Energy Corporation (Naftex) has made an application to the Director for an order under section 144 of the Securities Act (Ontario) (the Act) revoking a cease trade order made by the Director dated June 21, 2002 under section 127(1)(2) of the Act that trading in the shares of Naftex cease (the "Order").

AND WHEREAS Naftex was granted a partial revocation order on March 29, 2006 solely to permit Naftex to mail a management information circular (the Circular), to hold the meeting of the shareholders of Naftex (the Meeting) contemplated therein and to effect the share consolidation transaction contemplated therein (the Consolidation).

AND WHEREAS Naftex has represented to the Commission that:

1. Naftex is a public oil and gas exploration and development company incorporated under the laws of the Yukon Territory.

2. Naftex is a reporting issuer in British Columbia, Alberta, Ontario and the Yukon Territory and is also subject to cease trade orders issued by the British Columbia Securities Commission (BCSC) and the Alberta Securities Commission (ASC). Naftex has concurrently applied to the BCSC and ASC for a full revocation of their cease trade orders.

3. Naftex is authorized to issue an unlimited number of common shares without par or nominal value of which there were 94,289,963 shares issued and outstanding prior to the Consolidation (defined below) (the Old Shares).

4. The Old Shares were initially listed on the TSX Venture Exchange (the Exchange). Trading in the Old Shares was suspended by the Exchange effective May 31, 2002 as a result of the cease trade orders.

5. The Old Shares were later transferred to the NEX Board of the Exchange (the NEX) on December 1, 2003 for failure by Naftex to maintain the requirements of the Exchange. The Old Shares were officially delisted from the NEX on June 9, 2006.

6. The Order was issued against Naftex for failure to file financial statements for the year ended December 31, 2001 and for the three-month period ended March 31, 2002. Naftex subsequently failed to file annual financial statements for 2002, 2003 and 2004. Naftex was originally in non-compliance with the filing of its financial statements due to a lack of financial information regarding its activities in Egypt and Naftex was unable to timely file its financial statements beginning with the financial statements for the year ended December 31, 2001.

7. Naftex has now filed its annual financial statements and MD&A for the fiscal years ended December 31, 2001, 2002, 2003 and 2004, including the required annual chief executive officer and chief financial officer certifications, where applicable, and its interim financial statements and MD&A for the three, six, and nine month periods ended March 31, June 30 and September 30, 2005, respectively, including the required interim chief executive officer and chief financial officer certifications, where applicable.

8. Given Naftex's financial situation and outlook before the Consolidation, it was unlikely to pay any dividends to holders of the Old Shares (Shareholders) in the foreseeable future. Thus, Shareholders had limited liquidity and were not deriving any income from the Old Shares.

10. The Circular was mailed to Shareholders to request that they vote for a special resolution (the Consolidation Resolution) to amend the articles of incorporation of Naftex to complete the Consolidation.

11. Prior to the Consolidation, Norse Energy Corp ASA (Norse Energy) was the controlling shareholder of Naftex, holding 96.39% of the issued and outstanding Old Shares.

12. The Shareholders approved the Consolidation Resolution at the Meeting.

13. The Consolidation Resolution authorized Naftex to proceed with the Consolidation of the Old Shares on the basis of every 3,366,222 Old Share being consolidated into one New Share. No fractional shares were issued to holders of Old Shares pursuant to the Consolidation. Shareholders were entitled to be paid for their fractional Old Shares based on a price of $0.66 per Old Share.

14. Naftex has now completed the Consolidation and the sole shareholder of Naftex is Norse Energy. The Consolidation has resulted in Naftex becoming a wholly-owned subsidiary of Norse Energy.

15. As the previous holders of the Old Shares other than Norse Energy have no continuing interest in Naftex, and the Consolidation was completed before the applicable 2005 annual financial statement and March 31, 2006 interim financial statement filing deadlines, Naftex has not filed and does not intend to file audited financial statements, certificates or related MD&A for the year ended December 31, 2005 or interim financial statements, certificates or related MD&A for the interim period ended March 31, 2006.

16. In connection with the completion of the Consolidation, Naftex has also applied to cease to be a reporting issuer in British Columbia, Alberta and Ontario.

17. Naftex is seeking a full revocation of the Order.

AND WHEREAS considering the Application and the recommendation of the staff of the Commission;

AND WHEREAS the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Order be and is hereby revoked.

DATED June 23rd , 2006