Birch Lake Energy Inc. and Veraz Petroleum Ltd.: Proposed Arrangement Does Not Receive Shareholder Approval; Arrangement Agreement Terminated

CALGARY, ALBERTA--(Marketwire - Dec. 20, 2012) - Birch Lake Energy Inc. ("Birch Lake") (TSX VENTURE:BLK) and Veraz Petroleum Ltd. ("Veraz") (TSX VENTURE:VRZ.H) announced that the proposed arrangement pursuant to which Birch Lake was to acquire all of the issued and outstanding shares of Veraz did not receive the requisite shareholder approval at the special meeting (the "Special Meeting") of shareholders of Veraz held today to consider the arrangement, and as a result Birch Lake and Veraz agreed to terminate the arrangement agreement in respect of the proposed arrangement and will not be proceeding with the arrangement.

As set forth in Veraz's information circular and proxy statement mailed in connection with the Special Meeting, any shares of Veraz deposited in anticipated completion of the arrangement will be returned to the depositing Veraz shareholders by first class mail in the name of and to the address specified by the Veraz shareholders in their respective Letters of Transmittal or, if no such name and address was specified, in such name and to such address as shown on the register maintained by Veraz's transfer agent.

Birch Lake is proceeding with its previously announced non-brokered private placement of common shares and flow-through shares. Birch Lake completed the first tranche of the private placement for gross proceeds of $526,200, as announced on December 3, 2012 and intends to complete a final tranche on December 31, 2012. For further information on the private placement, please refer to the press releases of Birch Lake dated November 6, November 29 and December 3, 2012.