Birch Lake Energy Inc.
TSX VENTURE : BLK

May 31, 2011 18:07 ET

Birch Lake Capital Inc. Announces Proposed $2,500,000 Private Placement Financing

CALGARY, ALBERTA--(Marketwire - May 31, 2011) - Birch Lake Energy Inc. ("Birch Lake" or the "Corporation) (TSX VENTURE:BLK) announces its intention to complete a non-brokered private placement offering of up to 7,812,500 common units at $0.16 per common unit and up to 6,250,000 flow-through units at $0.20 per flow-through unit, for aggregate total gross proceeds of up to $2,500,000. Each common unit will consist of one common share and one common share purchase warrant. Each flow-through unit will consist of one common share to be issued on a "flow-through" basis and one half of one common share purchase warrant. Each whole warrant will entitle the holder thereof to acquire one common share at a price of $0.30 per share for a period of one year after the closing. If, at any time after the expiry of the 4 month hold period, the closing price of the common shares on the TSX Venture Exchange is at least $0.45 for a period of 5 consecutive trading days, the Corporation may, at its option, accelerate the expiry date of the warrants by giving written notice thereof to all holders of warrants, and, in such case, the warrants will expire on the date which is the earlier of: (i) the 21st day after the date on which such written notice is given by the Corporation; and (ii) the original expiry date.

A finder's fee of up to 7% of the gross proceeds of the offering may be paid, on all or any portion of the funds raised pursuant to this offering. In addition, finders will receive finders warrants equal to up to 7% of the number of units issued in connection with the offering. Each finders warrant will entitle the holder to purchase one common share at the subscription price of the units for a period of one year after the closing.

The closing of the offering is expected to occur on or about June 20, 2011, and is subject to regulatory approval, including approval of the TSX Venture Exchange. For further details on the offering, please contact the Corporation. All securities issued in connection with the offering will be subject to a hold period of four months from the date of closing. The net proceeds from the offering will be used to finance the Corporation's continuing capital program and for general working capital purposes.

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, such as the review of strategic alternatives and establishing a portfolio base and developing a new web-site which by their nature are forward-looking statements and which are subject to numerous risks and uncertainties, some of which are beyond Birch Lake's control, including the impact of general economic conditions, industry 2 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 believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been 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.

Contact Information

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