Magnum Hunter Resources Corporation

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- issuer requests relief from the requirements of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities -- issuer has less than 10% of its securityholders resident in Canada -- less than 10% of the issuer's issued and outstanding securities are held by residents of Canadian -- issuer exempt from requirements of NI 51-101 provided that the issuer complies with the oil and gas disclosure requirements of the SEC, NYSE and NYSE Amex.

Applicable Legislative Provisions

National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

Citation: Magnum Hunter Resources Corporation, Re, 2011 ABASC 573

November 22, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

MAGNUM HUNTER RESOURCES CORPORATION

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer be exempted from the requirements of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this application;

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the provinces of Canada other than Alberta and Ontario; and

(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and CSA Staff Notice 51-324 Glossary to NI 51-10 Standards of Disclosure for Oil and Gas Activities have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation governed by the laws of the state of Delaware, with its head office in Houston, Texas. The Alberta Securities Commission was selected as principal regulator because the registered and business offices of the Filer's Canadian subsidiaries, MHR Callco Corporation and MHR Exchangeco Corporation (Exchangeco), are located in Calgary, Alberta.

2. The Filer is engaged in the business of acquisition, development and production of oil and natural gas, with the significant majority of its assets and operations located outside of Canada.

3. The Filer is a reporting issuer or equivalent in each of the provinces of Canada and is not in default of securities legislation in any of the provinces of Canada.

4. The Filer's authorized capital stock consists of 250,000,000 shares of common stock of the Filer (Common Stock), 4,000,000 shares of 10.25% Series C Cumulative Preferred Stock of the Filer (Series C Stock), 5,750,000 shares of 8.0% Series D Cumulative Preferred Stock of the Filer (Series D Stock) and common stock warrants of the Filer (Warrants, together with Common Stock, Series C Stock and Series D Stock, the Securities). In addition, the Filer has issued one share of its special voting preferred stock to the trustee under the voting and exchange agreement in connection with the arrangement involving NuLoch Resources Inc. (NuLoch). As at 30 September 2011, the issued and outstanding Securities of the Filer consisted of the following: 129,516,860 shares of Common Stock, 4,000,000 shares of Series C Stock, 1,421,237 shares of Series D Stock and Warrants exercisable into 278,662 shares of Common Stock. As at 14 October 2011, the Filer had issued and outstanding Warrants exercisable into 13,531,929 shares of Common Stock.

5. The Securities, with the exception of the Warrants, are registered under the 1934 Act. Shares of the Filer's Common Stock are listed on the New York Stock Exchange (the NYSE) under the symbol "MHR" and shares of its Series C Stock and Series D Stock are listed on the NYSE Amex under the symbol "MHR.PRC" and "MHR.PRD", respectively.

6. Exchangeco, an indirect wholly-owned subsidiary of the Filer, is a corporation governed by the laws of the Province of Alberta and was incorporated for the sole purpose of implementing the acquisition of all the issued and outstanding common shares of NuLoch by way of plan of arrangement completed effective 3 May 2011 in order to allow for the issuance of the exchangeable shares of Exchangeco (Exchangeable Shares) to certain former shareholders of NuLoch. Each Exchangeable Share is, as nearly as practicable, the economic equivalent of the share of Common Stock of the Filer and may be exchanged by the holder thereof, for no additional consideration at any time, for one share of Common Stock. In any event, it is expected that each Exchangeable Share will be exchanged for one share of Common Stock one year from the effective date of the arrangement with NuLoch, subject to certain conditions and unless exchanged earlier upon the occurrence of certain events. As at 30 September 2011, the issued and outstanding securities of Exchangeco included 3,778,245 Exchangeable Shares.

7. Exchangeco is relying, and will continue to rely, on the continuous disclosure record of the Filer pursuant to section 13.3 of National Instrument 51-102 Continuous Disclosure Obligations and pursuant to subsection 8.2(1) of NI 51-101.

8. The Filer is subject to, and is in compliance with, all applicable requirements imposed by the SEC, the 1933 Act, the 1934 Act, the United States Sarbanes-Oxley Act of 2002 and the rules of the NYSE and NYSE Amex (collectively, the US Rules).

9. The Filer currently prepares disclosure with respect to its oil and natural gas activities (the Oil and Gas Disclosure) in accordance with both the US Rules and NI 51-101, as modified by an order granted on 22 June 2011 (Magnum Hunter Resources Corporation, Re, 2011 ABASC 352).

10. The Filer qualifies as an "SEC foreign issuer" under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102) and relies on and complies with the exemptions from Canadian continuous disclosure requirements afforded to SEC foreign issuers under Part 4 of NI 71-102.

11. The Filer has made a good faith investigation to confirm the residency of the holders of its outstanding securities. Based on this investigation, the Filer has concluded that residents in Canada: (a) do not directly or indirectly beneficially own more than 10% of the aggregate number of Securities and Exchangeable Shares; and (b) do not directly or indirectly comprise more than 10% of the aggregate number of beneficial holders of Securities and Exchangeable Shares.

12. None of the Securities or Exchangeable Shares are listed or posted for trading on any "marketplace" in Canada (as such term is defined in National Instrument 21-101 Marketplace Operation), and neither the Filer nor Exchangeco has any present intention to list the Securities or the Exchangeable Shares, as applicable, on any stock exchange or market in Canada.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted for so long as:

(a) residents of Canada do not directly or indirectly beneficially hold more than 10% of the aggregate number of outstanding Securities and Exchangeable Shares;

(b) residents of Canada do not directly or indirectly comprise more than 10% of the aggregate number of beneficial holders of Securities and Exchangeable Shares;

(c) residents of Canada do not directly or indirectly beneficially hold more than 10% of the aggregate outstanding number of any new class or series of securities issued by the Filer or any subsidiary thereof;

(d) residents of Canada do not directly or indirectly comprise more than 10% of the aggregate number of beneficial holders of any new class or series of securities issued by the Filer or any subsidiary thereof;

(e) the Filer is subject to and complies with the US Rules in connection with its oil and natural gas activities;

(f) the Filer issues in Canada, and files on SEDAR, a news release stating that it will provide the Oil and Gas Disclosure in accordance with the US Rules rather than in accordance with NI 51-101; and

(g) the Filer files the Oil and Gas Disclosure with the securities regulatory authority or regulator in each of the provinces of Canada as soon as practicable after the Oil and Gas Disclosure is filed pursuant to the US Rules.

"Blaine Young"
Associate Director, Corporate Finance