Black Birch Capital Acquisition II Corp.
TSX VENTURE : BBT.P

April 27, 2012 09:30 ET

Black Birch Capital Acquisition II Corp. Announces Proposed Qualifying Transaction With Richfield Oils Inc.

TORONTO, ONTARIO--(Marketwire - April 27, 2012) -

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Black Birch Capital Acquisition II Corp. (TSX VENTURE:BBT.P) ("Black Birch" or the "Corporation"), a capital pool company listed on the TSX Venture Exchange ("TSXV") is pleased to announce that it has entered into a Letter of Intent ("Letter of Intent") effective as of April 19, 2012 with Richfield Oils Inc. ("Richfield") with respect to a proposed acquisition by the Corporation (the "Acquisition") of Richfield's interests in oil and gas properties located in the Chigwell area of Alberta (the "Richfield Assets"). It is intended that the Acquisition will constitute the Qualifying Transaction of the Corporation in accordance with Policy 2.4 of the TSXV.

The Letter of Intent contemplates that, in exchange for the Richfield Assets, Black Birch shall issue to Richfield an aggregate of 5,000,000 Common Shares in the capital of Black Birch at a deemed price of $0.15 per common share for total consideration of $750,000.

The Letter of Intent also contemplates that Black Birch will complete a private placement (the "Offering") of a minimum of 6,500,000 Units (the "Units") of Common Shares and Common Share Purchase Warrants and a maximum of 12,000,000 Units. The Units will be priced at $0.15 per Unit and the Warrants will be exercisable at a price of $0.25 per Warrant until the date that is two years from the closing of the Offering. The aggregated gross proceeds realized on the minimum amount will be $975,000, and on the maximum amount $1,800,000. The Corporation may compensate an agent in conjunction with the Offering and the terms of such compensation will be disclosed in a future press release. The Offering shall close concurrently with the Acquisition.

The proceeds from the Offering will be used for exploration and development of the Richfield Assets and general working capital requirements. Additional amounts have been allocated for costs required to complete the Acquisition and for unallocated working capital. There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary in order for the Corporation to achieve its business objectives.

The completion of the Acquisition and the Offering are subject to the approval of the TSXV and all other necessary regulatory approvals. The completion of the Acquisition is also subject to certain other additional conditions precedent, including, but not limited to: (i) the entering into of a definitive agreement by Black Birch and Richfield on or before May 15, 2012 (the "Definitive Agreement"); (ii) completion of satisfactory due diligence by each of Black Birch and Richfield; (iii) completion of an engineering report on the Richfield Assets, which report shall be satisfactory to Black Birch and shall be compliant with the requirements of National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities; (iv) the approval of the Acquisition by the TSXV; (v) approval of each of Black Birch's and Richfield's respective board of directors; (vi) completion of at least the minimum amount of the Offering; (vii) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (viii) certain other conditions typical in a transaction of this nature.

Following the completion of the Acquisition and assuming completion of the maximum Offering, approximately 24,365,000 Common Shares are anticipated to be issued and outstanding in the capital of the Corporation. In addition, the Corporation already has issued and outstanding incentive stock options entitling the holders thereof to purchase up to an aggregate of 736,500 Common Shares at an exercise price of $0.10 per share and agents' options entitling the holders to purchase up to an aggregate of 536,500 Common Shares at an exercise price of $0.10 per share.

Following the completion of the Acquisition and subject to the approval of the TSXV, Black Birch also intends to grant additional incentive stock options to employees, consultants, directors and officers of Black Birch in accordance with the terms of the Corporation's stock option plan.

The only insiders of the Corporation after completion of the Acquisition will be Richfield and the directors and officers of the Corporation, being Paul Haber, Dong Sheng Li, Yuxin (James) Xiang and Richard J. Boswell.

The proposed Qualifying Transaction will be at arm's length, and accordingly, will not require approval by the majority of the minority shareholders of the Corporation. The Corporation anticipates that the proposed transaction will not require Sponsorship and will be applying to the TSXV for an exemption of Sponsorship of the transaction. However, there is no assurance that an exemption of Sponsorship will be granted by the TSXV.

Trading in the shares of the Corporation will be halted until such time as all required documents are filed with the TSXV. Upon completion of the Qualifying Transaction, the Corporation will be classified as an Oil and Gas Issuer on the TSXV.

About Richfield

Richfield is a private company incorporated under the Business Corporations Act (Alberta) on September 26, 1980 under the name 252904 Alberta Ltd. The company changed its name to "Richfield Oils Inc." on November 1, 1996. The shares of Richfield are owned by Richard J. Boswell (99.9%), President of Richfield, and Anne M. Boswell (0.1%), wife of Richard J. Boswell.

Richfield owns a 100 percent working interest in 160 acres of land in the Chigwell area of central Alberta (the "Richfield Assets"), which is located approximately 72 kilometers south of Edmonton. There are currently two abandoned wells on Richfield's lands, which had produced from the Leduc formation. Well 14-18-041-24W4 was drilled and completed in March 1984 as a Leduc oil well. The well produced a total of 236,846 barrels of oil and 187,946 Mcf of gas before being shut-in in March 1992. Upon completion of the Qualifying Transaction, the Corporation plans to drill a new well at 14-18-41-24W4 into the Leduc E pool. Further information concerning the Richfield Assets will be included in a subsequent news release.

About Black Birch

Black Birch is a capital pool company listed and posted for trading on the TSXV under the trading symbol "BBT.P".
The current Directors of Black Birch are Paul Haber of Brooklin, Ontario, Dong Sheng Li of Scarborough, Ontario, Yuxin (James)

Xiang of Mississauga, Ontario. At present, there are no proposed changed to the Corporation's Board of Directors arising as a result of the Acquisition.

Below is a brief description of key management and Directors of the Corporation following the completion of the Acquisition of the Richfield Assets:

Richard J. Boswell will be the interim Chief Executive Officer of the Corporation. Mr. Boswell graduated from the University of Calgary with a Bachelor of Commerce degree and has 30 years of oil and gas industry experience. He was a co-founder and President of Crozet Exploration Ltd, a private resource company, from 1980 to 1987 and was Land Manager of its successor, Crozet Oil & Gas Ltd., from 1987 to 1989. From 1989 to 1992, Mr. Boswell was Land Manager for Hardy Oil and Gas Ltd., a private resource company. From 1992 to 1996, he was an Officer and Director of Stateside Energy Ltd., a publicly listed company. Mr. Boswell was also a founding Director of Tonka Development Ltd., a publicly listed company, from incorporation until its sale in March 2002. From March, 2006, to May, 2007, Mr. Boswell was Vice President of Land at Mirage Energy Ltd., a public resource company. Beginning in June 2007, Mr. Boswell was President and Director of Kierland Resources Ltd. ("Kierland"). Mr. Boswell was the President of Kierland until June 30, 2010 and a Director of Kierland until November 2010.

Paul Haber will continue to be the Chief Financial Officer and a Director of the Corporation. Mr. Haber is also the Managing Director of Haber and Co. Ltd. which provides corporate finance and capital market advisory services to small and medium sized businesses. Mr. Haber currently serves as CFO of New Sage Energy Corp., CFO of Oremex Silver Inc. and Oremex Gold Inc. and Interim CFO of CRS Electronics Inc., and he has served as CFO of other private and public companies. Currently, Mr. Haber is a director of CRS Electronics Inc., High Desert Gold Corp., South American Silver Corporation, and China Health and Diagnostic Inc. Prior to forming Haber and Co., from 2004 through March 2007, Mr. Haber was Vice President, Chief Financial Officer and Corporate Secretary of QuStream Corporation. From 2001 to 2004, Mr. Haber was Senior Vice President and Chief Financial Officer at Protana Inc. Mr. Haber holds an honours BA from the University of Toronto and is both a Chartered Accountant and Certified Public Accountant.

Mr. Haber is 42 years old and is a Canadian citizen resident in Brooklin, Ontario. Mr. Haber will not work full-time for the Corporation, however, he will devote such time as required in connection with the management of the Corporation and completion of the Qualifying Transaction.

Dong Sheng Li will continue to be a Director of the Corporation. Mr. Li has held a position of a technologist at AMEC Earth & Environmental Limited (a provider of environmental, geotechnical and project management services) since July 2003. Prior thereto, Mr Li worked as an engineer at Fujian Geological Engineering Company in China. Mr. Li holds a Bachelor of Engineering from China University of Geology.

Mr. Li is 42 years old and is a Canadian citizen resident in Scarborough, Ontario. Mr. Li will not work full-time for the Corporation, however, he will devote such time as required in connection with the management of the Corporation and completion of the Qualifying Transaction.

Yuxin (James) Xiang will continue to be a Director of the Corporation. Mr. Xiang is also the President of CNX Consulting Inc. which provides accounting and financial advisory services to Chinese companies that are seeking listing, financing and M&A opportunities in North America. Mr. Xiang serves as the CFO of IND Dairytech Limited. From January 2006 to May 2009, Mr. Xiang served as the CFO of GobiMin Inc. Prior to that, Mr. Xiang worked in corporate finance management in a few TSX listed companies including COM DEV International, ATS Automation Tooling System and CFM Corporation. Mr. Xiang holds a BA from Huazhong University of Science & Technology in China and an MBA from York University. Mr. Xiang is a Certified Management Accountant (Ontario) and Certified Public Accountant (Delaware).

Mr. Xiang is 39 years old and is a Canadian citizen resident in Mississauga, Ontario. Mr. Xiang will not work full- time for the Corporation, however, he will devote such time as required in connection with the management of the Corporation and completion of the Qualifying Transaction.

The background information with respect to the Corporation's Secretary will be disclosed in a subsequent news release.

READER ADVISORY

This news release may contain certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with mining exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other explorers and producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Completion of the transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the information circular or filing statement to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The forward-looking statements contained in this press release are made as of the date of this press release, and Black Birch does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

7,365,000 Common Shares Issued

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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