change raport
ATERIAL CHANGE REPORT
<br>1. Name and Address of Company
<br>Oilexco Incorporated (“Oilexco” or the “Company”)
<br>Suite 3200, 715 - 5th Avenue S.W.
<br>Calgary, Alberta T2P 2X6
<br>2. Date of Material Change
<br>February 4, 2009 and February 5, 2009
<br>3. News Release
<br>News releases were disseminated through the services of Marketwire on February 4 and
<br>5, 2009.
<br>4. Summary of Material Change
<br>On February 4, 2009 Oilexco advised that it received demand letters from The Royal
<br>Bank of Scotland plc, on behalf of itself and other lenders, for immediate payment of all
<br>amounts outstanding under the US $547.5 million senior and super senior credit facility
<br>and £100 million pre-development credit facility of Oilexco North Sea Limited
<br>(“ONSL”) with those banks. The demands are pursuant to guarantees that were given by
<br>Oilexco of ONSL’s obligations under the credit facilities when those facilities were
<br>entered into.
<br>On February 5, 2009 advised that it obtained a court order for protection under the
<br>Companies’ Creditors Arrangement Act (Canada) (“CCAA”). Ernst & Young Inc. was
<br>appointed monitor under the order.
<br>5. Full Description of Material Change
<br>5.1 Full Description of Material Change
<br>Oilexco advised that it received demand letters from The Royal Bank of Scotland
<br>plc, on behalf of itself and other lenders, for immediate payment of all amounts
<br>outstanding under the US $547.5 million senior and super senior credit facility
<br>and £100 million pre-development credit facility of ONSL with those banks. The
<br>demands are pursuant to guarantees that were given by Oilexco of ONSL’s
<br>obligations under the credit facilities when those facilities were entered into.
<br>As previously announced on January 7, 2009, an order of an English court
<br>appointed representatives of Ernst & Young LLP as joint administrators to
<br>manage the affairs, business and property of ONSL. The joint administrators
<br>have continued a previously initiated process for the sale of shares or assets of
<br>ONSL. Oilexco, through a wholly owned subsidiary, has submitted a non-binding
<br>expression of interest to acquire certain assets of ONSL by assumption of future
<br>obligations related to those assets. Oilexco has been advised that other nonbinding
<br>expressions of interest have also been received by the joint administrators
<br>of ONSL. It is expected that the sale of the assets or shares of ONSL will be
<br>concluded prior to the end of the first quarter of 2009; however Oilexco has no
<br>way of predicting who the ultimate purchaser or purchasers will be, nor the value
<br>to be realized through the sale process.
<br>Oilexco further advised that it obtained a court order on February 5, 2009 for
<br>protection under the CCAA. Ernst & Young Inc. was appointed monitor under
<br>the order.
<br>The order permits Oilexco (including its wholly-owned Alberta subsidiary
<br>Oilexco Technical Services Inc.) to remain in possession and control of its
<br>property, carry on its business, retain employees and other service providers and
<br>restructure its operations. Proceedings by creditors and others cannot be
<br>commenced without leave of the court and current proceedings are stayed. The
<br>order does not affect rights of The Royal Bank of Scotland plc and other lenders
<br>to shares of Oilexco’s wholly-owned United Kingdom subsidiary ONSL. Those
<br>shares were pledged by Oilexco as security for Oilexco’s obligations as guarantor
<br>of amounts owed by ONSL under the US $547.5 million senior and super senior
<br>credit facility and £100 million pre-development credit facility of ONSL with the
<br>lenders.
<br>5.2 Disclosure for Restructuring Transactions
<br>Not applicable.
<br>6. Reliance on subsection 7.1(2) of National Instrument 51-102
<br>Not applicable. This report is not being filed on a confidential basis.
<br>7. Omitted Information
<br>Not applicable.
<br>8. Executive Officer
<br>William H. Smith
<br>Executive Vice President & General Counsel
<br>Phone: (403) 262-5441
<br>9. Date of Report
<br>Dated February 13, 2009