Birch Lake Energy Inc.
TSX VENTURE : BLK

December 10, 2010 14:52 ET

Birch Lake Energy Inc. Announces Proposed $750,000 Private Placement Financing

CALGARY, ALBERTA--(Marketwire - Dec. 10, 2010) - 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 3.75 million units at $0.20 per unit for total gross proceeds of up to $750,000. Each unit will consist of one common share and one half of one common share purchase warrant. Each whole warrant will entitle the holder thereof to acquire one additional common share at a price of $0.50 per share for a period of 8 months 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 $1.00 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 8% 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 8% of the number of units issued in connection with the offering. Each finders warrant will entitle the holder to purchase one common share at $0.20 per share for a period of one year after the closing.

The closing of the offering is expected to occur on or about December 20, 2010, 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.

It is anticipated that certain officers and directors of Birch Lake will subscribe under the offering. Birch Lake currently anticipates that it will be able to rely upon exemptions from the various requirements of TSXV Policy 5.9 and Multilateral Instrument 61-101 for the issuance of units to insiders.

The Corporation is actively conducting due diligence with respect to acquiring interests in high impact oil opportunities in Alberta and Saskatchewan as well as evaluating a number of large international oil and gas exploration opportunities. In this regard, 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