Birch Lake Energy Inc. and Veraz Petroleum Ltd. Announce Plan of Arrangement

CALGARY, Nov. 22, 2012 /CNW/ - Birch Lake Energy Inc. ("Birch Lake" or the "Corporation") (TSXV: BLK) and Veraz Petroleum Ltd. ("Veraz") (NEX: VRZ) announced today that, further to the proposed acquisition announced on November 6, 2012, they have entered into an arrangement agreement (the "Arrangement Agreement") with respect to the acquisition by Birch Lake of all of the issued and outstanding common shares of Veraz (the "Transaction").  Under the terms of the Arrangement Agreement, Veraz shareholders will receive 0.112100125 of a Birch Lake common share for every one (1) Veraz common share.  The Transaction will be undertaken by means of a plan of arrangement (the "Arrangement") under the Business Corporations Act (Alberta). Birch Lake will issue approximately 6.0 million common shares to Veraz shareholders.  The Arrangement Agreement contemplates that Veraz will hold a meeting of its shareholders on or prior to December 20, 2012 to permit Veraz shareholders to vote on the Arrangement.

The Arrangement Agreement provides that completion of the Transaction is subject to certain conditions, including receipt of all regulatory approvals, including approval of the TSX Venture Exchange, the approval of the shareholders of Veraz and the approval of the Court of Queen's Bench of Alberta.  The Transaction is anticipated to close on December 21, 2012.

Upon completion of the Transaction (and before the completion of Birch Lake's proposed financing of common shares and flow-through shares for gross proceeds of up to $2,000,008), Birch Lake expects to have a total of approximately 57,941,217 common shares issued and outstanding (of which former shareholders of Veraz will hold approximately 10.4%) and $2.3 million in cash (in addition to any funds received through the proposed financing).

Upon completion of the Transaction, the board and management team of the Corporation will consist of the current directors and officers of the Corporation with the addition of one existing Veraz director, Gerardjan (Oppe) Cosjin.  It is anticipated that a second existing Veraz director, Trevor Mitzel, will join the Corporation as an advisor upon completion of the Transaction, and will be appointed to the Board of Directors of Birch Lake at the Corporation's next Annual General Meeting (subject to shareholder approval).

For further information, please refer to the joint press release of Birch Lake and Veraz dated November 6, 2012 and filed on SEDAR at and the information circular and proxy statement of Veraz which is expected to be mailed to Veraz shareholders and filed on SEDAR on November 29, 2012 in connection with the special meeting of Veraz shareholders to be held to consider and approve the Transaction.

Forward Looking Statements

This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including statements regarding Birch Lake's business, the Transaction, the timing of the meeting of Veraz shareholders and the closing of the Transaction. Such forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Birch Lake's and Veraz's control, including the ability of Birch Lake and Veraz to satisfy the conditions to completion of the Transaction, the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Birch Lake and Veraz believe that the expectations in their respective forward-looking statements are reasonable, they are based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Birch Lake does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

About Birch Lake Energy Inc.

Birch Lake is a junior oil and gas company engaged in the exploration for and the acquisition, development and production of oil and natural gas reserves. The Corporation's common shares are listed to trade on the TSX Venture Exchange under the symbol "BLK".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Birch Lake Capital Inc.

For further information:

William H. Petrie
President and Chief Executive Officer of Birch Lake
(403) 457-1944

Paul Baay
Chairman of the Board of Veraz
(403) 619-8407

Organization Profile

Birch Lake Capital Inc.

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Veraz Petroleum Ltd.

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