Equatorial Energy Inc. - MRRS Decision

MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - relief for officers and directors of reporting issuerand its subsidiaries from the insiders reporting requirements with respect to the acquisition of securities under anautomatic share purchase plan, subject to certain conditions including annual reporting.

Applicable Ontario Statutory Provision

Securities Act, R.S.O. 1990, c.S.5, as am. ss.1(1), 107, 108, 121(2)(a)(iii).

Regulation Cited

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am. Part VIII.

Policies Cited

Ontario Securities Commission Policy Statement No. 10.1.

Instrument Cited

Proposed National Instrument 55-101 - Exemption From Certain Insider Reporting Requirements (1999), 22 OSCB 5161.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF THE PROVINCES

OF BRITISH COLUMBIA, ALBERTA AND ONTARIO

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF EQUATORIAL ENERGY INC.

MRRS DECISION DOCUMENT

1. WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of the provincesof British Columbia, Alberta and Ontario (the "Jurisdictions") has received an application from Equatorial EnergyInc. (the "Filer") for a decision under the securities legislation of the Jurisdictions (the "Legislation") that therequirements contained in the Legislation for an insider of a reporting issuer or the equivalent thereof to fileinsider reports disclosing the insider's direct or indirect beneficial ownership of, or control or direction over,securities of the reporting issuer (the "Insider Reporting Requirement") shall not apply to the acquisition byinsiders of the Filer of certain securities of the Filer pursuant to an automatic securities purchase plan of theFiler under certain conditions;

2. AND WHEREAS pursuant to 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 in this Decision Document the terms;

3.1 "automatic securities purchase plan" means a plan designated by a reporting issuer or equivalent tofacilitate the acquisition of previously issued securities of the reporting issuer or equivalent byemployees of the reporting issuer or equivalent where:

(a) the timing of acquisitions of securities, the number of securities acquired by each participant and theprice paid for the securities are established by a procedure set out in the Plan; and

(b) the acquisitions of securities pursuant to the Plan are made by a trustee on the open market; and

3.2 "lump sum provision" means a provision of an automatic securities purchase plan which allows adirector or senior officer to acquire securities pursuant to an optional lump-sum or cash paymentprovision;

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

4.1 the Filer is an independent energy company engaged in the acquisition, exploration and developmentof oil and gas properties in Western Canada and Indonesia, continued under the laws of the Provinceof Alberta, is a reporting issuer or equivalent under the Legislation and is not in default of anyrequirements of the Legislation;

4.2 the Filer's head office is located in Calgary, Alberta;

4.3 the Filer is authorized to issue an unlimited number of common shares without nominal or par valueand an unlimited number of preferred shares without nominal or par value, issuable in series, of which19,164,935 Common Shares and 21,134,203 series 1 convertible preferred shares were issued andoutstanding as at the date hereof. An aggregate of 1,875,000 common shares have been reservedfor issuance pursuant to the Filer's incentive share option plan dated May 18, 1999;

4.4 the Filer has established the employee share purchase plan (the "Plan") for certain of its directors,officers and employees, which Plan is an automatic securities purchase plan;

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

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

7. THE DECISION of the Decision Makers pursuant to the Legislation is that, subject to the restrictions set forthbelow, the Insider Reporting Requirement shall not apply to the insiders of the Filer with respect to theacquisition of common shares in the capital of the Filer pursuant to the Plan provided that:

7.1 each insider files a report, in the form prescribed for insider trading reports under the Legislation,disclosing each acquisition of securities under the Plan that has not been disclosed by or on behalfof the insider:

(a) for any securities acquired under the Plan which have been disposed of or transferred, withinthe time required by securities legislation for filing a report disclosing the disposition ortransfer; and

(b) for any securities acquired under the Plan during a calendar year which have not beendisposed of or transferred, within 90 days of the end of the calendar year;

7.2 the exemptive relief granted by this Decision shall not apply to the acquisition of securities of the Filerpursuant to a lump-sum provision of the Plan;

7.3 the exemptive relief granted by this Decision shall not apply to an insider that beneficially owns,directly or indirectly, voting securities of the Filer, or exercises control or direction over votingsecurities of the Filer, or a combination of both, carrying more than 10% of the voting rights attachedto all outstanding voting securities of the Filer.

DATED at Calgary, Alberta on the 9th of January,2000.

Mavis Legg, CA

Manager, Securities Analysis