re: QUESTAR RESOURCES CORP. and KACEE EXPLORATION INC. An application by Questar Resources Corp. and KACEE Exploration Inc. 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 6640-98 April 1, 1996
- 2 - A P P E A R A N C E S For Questar Resources Corp. Mr. Jeffrey E. Dyck and Code Hunter Wittmann KACEE Exploration Inc.
- 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 Questar Resources Corp. and KACEE Exploration Inc. (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 certain transactions, the particulars of which are set out in Schedule "A" attached to this Order (the Transaction); AND UPON READING: (1) the Application dated March 21, 1996; (2) the Affidavit of Barry R. Giovanetto sworn March 21, 1996, and the Affidavit of Howard R. Ward sworn March 20, 1996; and (3) the Management Proxy Circular of Questar; AND UPON HEARING the Application in the Board's Calgary Offices on March 27, 1996;
- 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 1st day of April, 1996. MEMBER
- 5 - BOARD FOLLOWING IS SCHEDULE "A" ATTACHED TO AND FORMING PART OF ALBERTA ENERGY AND UTILITIES DATED APRIL 1, 1996 MEMBER
SCHEDULE "A" THE TRANSACTION The transaction is a plan of arrangement pursuant to section 186 of the Business Corporations Act (Alberta) between Questar Resources Corp. and KACEE Exploration Inc. DETAILS OF THE TRANSACTIONS 1. Pursuant to the terms and conditions of an Arrangement Agreement made as of February 23, 1996 between Questar Resources Corp. ("Questar") and KACEE Exploration Inc. ("KACEE"), upon the requisite approvals of certain security holders of Questar and upon the entering of the Final Order of the Court of Queen's Bench of Alberta and filing of Articles of Arrangement with the Registrar of Corporations pursuant to the Business Corporations Act (Alberta), each two (2) outstanding common shares of Questar will be extchanged for one fully paid and non-assessable common share of KACEE in exchange for 1.98 of such Questar common shares and 0.0898 warrants to purchase common shares of KACEE for 0.02 of such Questar common shares. Each full warrant shall be exercisable into one KACEE common share within 12 months from the date of issue at a price of $0.60 per KACEE common share. 2. Upon the arrangement becoming effective, Questar will become a wholly-owned subsidiary of KACEE.
- 5 - 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 1st day of April, 1996. (Signed) B. T. McMANUS, Q.C. MEMBER
- 6 - BOARD FOLLOWING IS SCHEDULE "A" ATTACHED TO AND FORMING PART OF ALBERTA ENERGY AND UTILITIES DATED APRIL 1, 1996 (Signed) B. T. McMANUS, Q.C. MEMBER