Mooncor Oil & Gas Corp.

Mooncor Oil & Gas Corp.
Birch Lake Energy Inc.

February 26, 2014 17:00 ET

Mooncor Oil & Gas and Birch Lake Energy Announce Proposed Acquisition of Birch Lake by Mooncor

TORONTO, ONTARIO and CALGARY, ALBERTA--(Marketwired - Feb. 26, 2014) - Mooncor Oil & Gas Corp. ("Mooncor") (TSX VENTURE:MOO) and Birch Lake Energy Inc. ("Birch Lake") (TSX VENTURE:BLK) are pleased to announce that they have entered into a non-binding letter agreement (the "LOI") for the arm's length acquisition by Mooncor of 100% of the common shares of Birch Lake Energy Inc. ("Birch Lake") (TSX VENTURE:BLK). Pursuant to the terms of the LOI, the acquisition is subject to completion of certain conditions precedent, including, satisfactory due diligence, execution of a definitive agreement and receipt of all necessary director, shareholder, regulatory and TSX Venture Exchange approvals.

Pursuant to the LOI, Mooncor and Birch Lake have agreed to combine their businesses and the parties anticipate completing the acquisition by means of a triangular amalgamation (the "Amalgamation"). The Amalgamation will effectively provide for the acquisition of all of the outstanding equity interests of Birch Lake by Mooncor, indirectly through a wholly-owned Alberta incorporated subsidiary of Mooncor (the "Amalgamation Entity") in a transaction in which the shareholders of Birch Lake will receive shares of Mooncor (the "Mooncor Shares") and, if applicable, convertible securities of Mooncor. As a result of the Amalgamation of Amalgamation Entity and Birch Lake (the "Amalgamated Corporation"), Mooncor will become the sole beneficial owner of all of the outstanding shares of Amalgamated Corporation. The exchange ratio for the exchange of securities of Birch Lake will be 1:1.

The Amalgamation is an arm's length transaction and therefore is not a related party transaction pursuant to Multilateral Instrument 61-101. As a result, no meeting of Mooncor shareholders is expected to be required as a condition to completion of the Amalgamation.

As at the date hereof, the Amalgamation would result in Mooncor issuing an aggregate of 58,180,383 Mooncor Shares to the shareholders of Birch Lake, and convertible securities at $0.18 per share exercisable for an additional 3,525,000 Mooncor Shares. Following the completion of the Amalgamation, 208,114,903 Mooncor Shares would be outstanding and 16,367,242 Mooncor Shares would be reserved for issuance. On closing, current Mooncor shareholders would hold approximately 72.04% of the Mooncor Shares and former Birch Lake shareholders would own approximately 27.96% of the Mooncor Shares.

Birch Lake is junior oil and gas company engaged in the exploration for and the acquisition, development and production of oil and natural gas reserves. Birch Lake's main asset is a light oil play on 8.125 sections (5,200 acres) (3.067 net sections (1,963 net acres)) on the Lochend Cardium trend in Alberta (0.6 net sections (384 net acres) of which are set to expire on April 30, 2014). Additional information about Birch Lake and its properties and business is available on SEDAR (

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although each of Mooncor and Birch Lake believe that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, each of Mooncor and Birch Lake disclaim any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

Neither 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.

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