Birch Lake Energy Inc and Veraz Petroleum Ltd. Reach Agreement In Principle In Connection With Proposed Business Combination

Birch Lake Energy Inc (Birch Lake) and Veraz Petroleum Ltd. (Veraz) announced that they have reached an agreement in principle whereby, subject to the execution of definitive documentation and other customary conditions, the Corporation has agreed to acquire all of the currently issued and outstanding common shares of Veraz (the Proposed Acquisition). In connection with the Proposed Acquisition, Birch Lake will issue approximately 6.0 million common shares to the holders of Veraz common shares, on the basis of 0.112100125 of a Birch Lake common share for every one Veraz common share. Upon completion of the Proposed Acquisition, 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 Proposed 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.