Birch Lake Energy Inc.

April 04, 2011 12:12 ET

Birch Lake Energy Inc. Announces Asset Acquisition at Halkirk

CALGARY, ALBERTA--(Marketwire - April 4, 2011) - Birch Lake Energy Inc. ("Birch Lake" or the "Corporation) (TSX VENTURE:BLK) announces that it has entered into a general conveyance agreement with arm's length third party vendors pursuant to which the Corporation has acquired near Halkirk Alberta, an undivided 100% working interest in certain petroleum and natural gas rights underlying 3,040 acres, and an undivided 50% working interest in rights beneath an additional 480 acres for a total of 3,520 gross acres (3,280 net acres). The total consideration paid by Birch Lake to acquire the interests underlying 5.5 sections (5.125 net sections) was $1,700,001, comprised of $200,001 in cash and 6,000,000 common shares issued from the Corporation's treasury at a deemed price of $0.25 per share. This transaction is subject to final approval by the TSX Venture Exchange.

William H. Petrie, the President and Chief Executive Officer of the Corporation states "This acquisition gives the Corporation a meaningful land position with multi-well potential in what is currently one of the more active plays in Alberta utilizing horizontal drilling and multi-stage fracturing techniques in the development of light oil reserves. As operator, Birch Lake will be employing the most current and efficient drilling and completion methods in the exploitation of these lands. A research report published by Macquarie Capital Markets Canada Ltd. and dated February 7, 2011 reports average "peak" rates of 105 to 126 boepd (barrels of oil equivalent per day) per well for two of the main operators in the Halkirk area. Reserves are estimated in this same report at 115,000 barrels of oil equivalent (boe), proved plus probable, per well from the Viking Formation in the Halkirk core area. The Corporation is unable to confirm that the production or reserves information reported by Macquarie was prepared by a qualified reserves evaluator or auditor or in accordance with the COGE Handbook.

Based on current production spacing units for the area, Birch Lake could drill up to 22 horizontal wells on the acquired leases, a number of which are adjacent to Alberta Crown lands that were recently acquired for more than $800,000 per section. We are pleased that the vendors recognize the upside potential of owning equity in the Corporation by having agreed to accept the majority of the acquisition consideration in shares of Birch Lake at a premium to their recent trading price."

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 anticipated exploration activities, 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 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