RIGEL ENERGY CORPORATION RIGEL OIL & GAS LTD. INVERNESS PETROLEUM LTD. INVERNESS ENERGY LTD.

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1 re: and RIGEL ENERGY CORPORATION RIGEL OIL & GAS LTD. INVERNESS PETROLEUM LTD. INVERNESS ENERGY LTD. An application by Rigel Energy Corporation, Rigel Oil & Gas Ltd., Inverness Petroleum Ltd. and Inverness Energy Ltd. for an Order declaring that section 99 of the Public Utilities Board Act, and section 99 of the Public Utilities Board Act to the extent that it may be incorporated into the Gas Utilities Act by operation of sections 50 and 51 of the Gas Utilities Act, does not apply to the Applicants with respect to a certain transaction. BEFORE: B. T. McMANUS, Q.C. Member FILE April 29, 1996

2 - 2 - A P P E A R A N C E S For Rigel Energy Corporation : Mr. J. Jay Park Rigel Oil & Gas Ltd. Macleod Dixon Inverness Petroleum Ltd. and Inverness Energy Ltd.

3 - 3 - O R D E R The Alberta Energy and Utilities Board (the Board) hereby adopts as an Order, this report of B. T. McManus, the Member authorized pursuant to section 10 of the Alberta Energy and Utilities Board Act, S.A. 1994, c. A-19.5 and section 18 of the Public Utilities Board Act, R.S.A. 1980, c. P-37 to report on the matter; UPON THE APPLICATION by Rigel Energy Corporation, Rigel Oil & Gas Ltd., Inverness Petroleum Ltd. and Inverness Energy Ltd. (the Applicants) to the Board for an Order declaring that section 99 of the Public Utilities Board Act, R.S.A. 1980, c. P-37 (the PUB Act), and section 99 of the PUB Act to the extent that it may be incorporated into the Gas Utilities Act, R.S.A. 1980, c. G-4 (the GU Act) by operation of sections 50 and 51 of the GU Act, does not apply to the Applicants with respect to a certain transaction, the particulars of which are set out in Schedule "A" attached to this Order (the Transaction); AND UPON READING: (1) the Application dated April 23, 1996; and (2) the Affidavit of Donald R. Gardner sworn April 24, 1996; AND UPON HEARING the Application in the Board's Calgary Offices on April 25, 1996;

4 - 4 - AND UPON HEARING Counsel for the Applicants; AND IT APPEARING that no other interested person has made any submission or objection with respect to the Application; AND WHEREAS, in the opinion of Counsel, the Transaction will constitute a "union" pursuant to the provisions of section 99 of the PUB Act; AND IT APPEARING that the Applicants are not designated utilities as listed in the Designation Regulations pursuant to section 91.1 of the PUB Act and section 25.1 of the GU Act; AND IT APPEARING that the Transaction will not adversely affect any member of the public of Alberta; AND WHEREAS the Board considers that, for the purposes of the Transaction, the public convenience and public interests do not reasonably require the application of section 99 of the PUB Act to the Applicants; THEREFORE, IT IS HEREBY DECLARED that, pursuant to section 71(1)(c) of the PUB Act, section 99 of the PUB Act does not apply to the Applicants for the purposes of the Transaction; AND IT IS FURTHER DECLARED that, pursuant to section 3(1)(c) of the GU Act, section 99 of the PUB Act to the extent that it may be incorporated into the GU Act by operation of sections 50 and 51 of the GU Act is also exempted for the purposes of the Transaction; AND IT IS HEREBY DECLARED that nothing in this Order shall bind, affect or prejudice the Board in its consideration of any other matter or question relating to any public utility owned, operated, managed or controlled by the Applicants. Dated at Calgary, Alberta this 29th day of April, (Signed) B. T. McMANUS, Q.C. (Issued with original signature) MEMBER

5 - 5 - BOARD FOLLOWING IS SCHEDULE "A" ATTACHED TO AND FORMING PART OF ALBERTA ENERGY AND UTILITIES DATED APRIL 29, 1996 (Signed) B. T. McMANUS, Q.C. (Issued with original signature) MEMBER

6 - 6 - SCHEDULE "A" THE TRANSACTION On or before January 1, 1997, it is the intention of Rigel Energy Corporation (Rigel) to: (a) (b) transfer to Rigel Oil & Gas Ltd. (Rigel Oil), a wholly-owned subsidiary of Rigel, all of the outstanding shares of Inverness Petroleum Ltd. (Inverness); and amalgamate Rigel Oil, Inverness and Inverness Energy Ltd. (a wholly owned subsidiary of Inverness) to form an amalgamated company which will be wholly-owned by Rigel. For the purposes of this Application, any transfer to Rigel Oil of the shares of Inverness, and any amalgamation of Inverness, Inverness Energy Ltd. and Rigel Oil, shall be considered to be part of the Transaction.

7 - 5 - U96035 AND IT IS FURTHER DECLARED that, pursuant to section 3(1)(c) of the GU Act, section 99 of the PUB Act to the extent that it may be incorporated into the GU Act by operation of sections 50 and 51 of the GU Act is also exempted for the purposes of the Transaction; AND IT IS HEREBY DECLARED that nothing in this Order shall bind, affect or prejudice the Board in its consideration of any other matter or question relating to any public utility owned, operated, managed or controlled by the Applicants. Dated at Calgary, Alberta this 29th day of April, (Signed) B. T. McMANUS, Q.C. MEMBER

8 - 6 - U96035 BOARD FOLLOWING IS SCHEDULE "A" ATTACHED TO AND FORMING PART OF ALBERTA ENERGY AND UTILITIES DATED APRIL 29, 1996 (Signed) B. T. McMANUS, Q.C. MEMBER