Veraz Petroleum Ltd. announces changes to Birch Lake financing and impact on previously announced arrangement

        






Veraz Petroleum Ltd. announces changes to Birch Lake financing and impact on previously announced arrangement

CALGARY, Nov. 29, 2012 /CNW/ - Veraz Petroleum Ltd. ("Veraz") (NEX: VRZ) announced today that Birch Lake Energy Inc. ("Birch Lake") (TSXV:BLK) has amended the terms of its previously announced non-brokered private placement (the "Birch Lake Financing") such that it will now issue and sell up to a maximum of 10,000,000 common shares ("Birch Lake Shares") at a price of $0.10 per share and up to a maximum of 8,333,334 Birch Lakes Shares on a flow-through basis at a price of $0.12 per share. Birch Lake had previously announced that under the Birch Lake Financing it would sell up to 8,333,350 Birch Lake Shares at a price of $0.12 per share and up to 7,142,900 Birch Lake Shares on a flow-through basis at a price of $0.14 per share.

The changes to the terms of the Birch Lake Financing will not have any impact on the terms of the previously announced plan of arrangement whereby Birch Lake will acquire all of the issued and outstanding common shares ("Veraz Shares") of Veraz on the basis of 0.112100125 of a Birch Lake Share for each Veraz Share (the "Arrangement").  However, as a result of the increase in the number of Birch Lake Shares that may be issued pursuant to the Birch Lake Financing and the reduction in the offer price, Veraz shareholders may experience additional dilution pursuant to the Birch Lake Financing.  Under the old Birch Lake Financing terms, there would have been approximately 73,417,467 Birch Lake Shares outstanding following the Arrangement and the closing of a fully subscribed Birch Lake Financing, of which former Veraz shareholders would have held approximately 8.2%.  Under the new Birch Lake Financing terms, there will be approximately 76,274,551 Birch Lake Shares outstanding following the Arrangement and the closing of a fully subscribed Birch Lake Financing, of which former Veraz shareholders will hold approximately 7.9%.

The arrangement agreement dated November 21, 2012 between Veraz and Birch Lake has been amended by way of a consent and waiver document (the "Arrangement Amending Agreement") to reflect the changes to the Birch Lake Financing.  A copy of the Arrangement Amending Agreement is available on SEDAR at www.sedar.com.

For further information with respect to the Arrangement and Birch Lake, please refer to the information circular and proxy statement (the "Circular") of Veraz which has been mailed to Veraz shareholders in connection with the special meeting of shareholders to be held on December 20, 2012 to consider and approve the Arrangement, a copy of which is available on SEDAR.  In accordance with the terms of the Interim Order made by the Court of Queen's Bench of Alberta on November 23, 2012 in respect of the Arrangement, this press release amends information contained in the Circular in respect of the Birch Lake Financing and related matters.

Forward Looking Statements

This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including statements regarding the Arrangement, the Birch Lake Financing and the number of Birch Lake Shares that will be outstanding following completion of the Arrangement. Such forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Veraz's control, including the ability of Birch Lake and Veraz to satisfy the conditions to completion of the Arrangement and otherwise complete the Arrangement, and the ability of Birch Lake to complete the Birch Lake Financing. Although Veraz believes that the expectations in the forward-looking statements are reasonable, they are 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 statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, 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, Veraz 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.

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.

SOURCE Veraz Petroleum Ltd.

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