Birchcliff Energy Ltd.

Birchcliff Energy Ltd.

March 30, 2005 09:25 ET

Birchcliff Announces CDN$240 Million Acquisition of Peace River Arch Oil & Gas Properties & Conference Call




MARCH 30, 2005 - 09:25 ET

Birchcliff Announces CDN$240 Million Acquisition of
Peace River Arch Oil & Gas Properties & Conference Call

CALGARY, ALBERTA--(CCNMatthews - March 30, 2005) -

This press release is not for distribution to United States Newswire
Services or for dissemination in the United States.

Birchcliff Energy Ltd. (TSX VENTURE:BIR) ("Birchcliff") is pleased to
announce that it has entered into an acquisition agreement dated March
29, 2005 to acquire oil and natural gas properties in the Peace River
Arch Area of North West Alberta (the "Properties") for approximately
CDN$240 million after estimated closing adjustments. Closing is expected
on or before May 31, 2005.

The Properties, which are located in the Peace River Arch, currently
produce approximately 4,800 boe/day, weighted 80% towards natural gas
and natural gas liquids and 20% light oil.

Acquisition Highlights include:

- 60% average working interest.

- 55% of production is operated.

- 4 properties represent 75% of the production from the Pouce Coupe,
Gordon Dale, Progress and Rycroft areas of Alberta.

- 205,000 gross developed acres of land.

- 116,000 gross undeveloped acres and 75,000 net undeveloped acres (66%
average working interest).

- Significant ownership interests in 10 facilities, 2 operated gas
plants, 2 non-operated gas plants and numerous compressor stations,
several oil batteries and miscellaneous infrastructure.

- A licensed copy of a minimum of 37.5 square km of 3-D seismic and 767
km of 2-D seismic to assist Birchcliff in the ongoing identification and
evaluation of the upside potential associated with these assets.

- Light oil is not hedged.

- Approximately 40% of the natural gas is sold under contracts that
expire in October 31, 2005. Birchcliff has no current plans to hedge its

- The establishment of a clearly focused core area in the Peace River
Arch with larger contiguous blocks of developed and undeveloped land.

- Majority of properties have year round access.

- Birchcliff has the opportunity to exploit, develop and explore for oil
& gas where there is multi-zone potential with ownership in a developed
infrastructure system.

Birchcliff has identified and expects to pursue 60 gross drilling
locations and 30 gross recompletions and reactivations on existing
wells. To date, Birchcliff has identified an inventory in excess of 250
potential opportunities.


Management has targeted an exit rate of 5,500 to 6,000 boe/day for 2006.
The character of the properties and their multi-zone potential should
provide Birchcliff with low cost production and reserve additions.


An independent engineering reserve report prepared for the vendor,
effective January 1, 2005, done substantially in accordance with NI
51-101 assigned proved reserves of 8.7 million boe and proved plus
probable reserves of 12.2 million boe. The reserve life index on a
proved plus probable basis is approximately 6.7 years. Birchcliff
intends to obtain a NI 51-101 compliant engineering report and will make
further disclosure once that is available.


A portion of the production is subject to Rights of First Refusal
("ROFRS"), which could reduce the purchase price as well as the amount
of production acquired.


Birchcliff will fund the transaction through a combination of cash on
hand (approximately CDN$55 million) plus a drawdown on a CDN$219 million
credit facility provided by Scotia Capital. Subsequent to closing,
Birchcliff will negotiate a conventional bank line of credit. The
balance of the Scotia Capital facility will be repaid in one year
through a combination of the sale of non-strategic assets or various
other alternatives.


Estimated Total Net Purchase Price CDN$240 million
Undeveloped Land ($250/Acre) (1) CDN$18.75 million
Production and Reserve Value CDN$221.25 million
Cost per Producing boe per day (2) CDN$46,000
Cost per Proved boe CDN$25.31/boe
Cost per Proved + Probable CDN$18.21/boe

(1) Based on 75,000 net undeveloped acres
(2) Based on an estimated 4,800 boe/day

The transaction is subject to a number of regulatory, stock exchange and
Birchcliff shareholder approvals.


The acquisition has provided Birchcliff with the critical mass,
infrastructure and land base to establish a significant operating
position and core area in the Peace River Arch area of Alberta.
Birchcliff intends to actively exploit, develop and explore for natural
gas and light oil in this core area.

Birchcliff also intends to pursue acquisition/consolidation
opportunities in the Peace River Arch and to actively add to its land
and production position, utilizing its infrastructure system to its

Jeff Tonken, President of Birchcliff, said, "This acquisition
establishes Birchcliff as a strong junior energy producer with the
majority of our assets producing natural gas and the remainder a high
quality light oil in the Peace River Arch of Alberta. We have a
significant developed land base with tremendous optimization and
recompletion opportunities, infill and step-out drilling opportunities.
Further, we have a large undeveloped land base with large tracts of
contiguous blocks of property. This undeveloped land is contained within
or close to our infrastructure system that will allow us to bring our
production additions to market. We have excellent light oil development
plays at Pouce Coupe and Progress. Finally Birchcliff has positioned
itself to participate in higher impact natural gas exploration
opportunities in the Peace River Arch Area of Alberta."

The number one rule in the oil and gas acquisition arena is location,
location, location. Birchcliff now has a significant production base,
excellent exploration, development and exploitation opportunities in the
Peace River Arch area of North West Alberta which has positioned
Birchcliff for significant growth through the drill bit. Birchcliff has
control and access to substantial infrastructure in the area. Birchcliff
is now positioned to participate in deeper, multi-zone potential, high
deliverability, large reserve, high impact exploration plays. Suffice to
say, all of us who are significant shareholders of Birchcliff are
excited about the future opportunities for our company."


To discuss the proposed transaction a conference call with a question &
answer segment will be held on Wednesday, March 30, 2005 at 8:00 a.m.
Mountain Standard Time (10:00 am Eastern Time). To participate, please
call 1-888-458-1598 (from Canada) and use conference i.d. 4578073
followed by the # key.

Following the conference call, a copy of the call may be accessed by
phone by dialing 1-877-653-0545 from within North America using the
conference reference number 273058 followed by the # key. This call will
be available until April 30, 2005.

Birchcliff is a publicly traded company that trades on the TSX Venture
Exchange under the symbol "BIR".


Contact Information

    Birchcliff Energy Ltd.
    A. Jeffery Tonken
    President & Chief Executive Officer
    (403) 261-6410
    (403) 261-6424 (FAX)
    Birchcliff Energy Ltd.
    Myles Bosman
    Vice President, Exploration & C.O.O.
    (403) 261-6412
    (403) 261-6424 (FAX)
    Birchcliff Energy Ltd.
    Jim Surbey
    Vice President, Corporate Development
    (403) 261-6416
    (403) 261-6424 (FAX)
    Birchcliff Energy Ltd.
    Bruno P. Geremia
    Vice President & C.F.O.
    (403) 261-6417
    (403) 261-6424 (FAX)
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.