Birch Lake Energy Inc. announced that it has filed a statement of defence and counterclaim relating to the claim filed by Bernum Petroleum Ltd. The claim relates to the company's Lochend Assets, being the non-operated working interest of 40% in certain petroleum and natural gas rights underlying 6,560 gross acres in the Lochend-Bearspaw area of Alberta. As set out in the statement of defence, Birch Lake denies that it is indebted to Bernum and that Bernum is entitled to the relief that is has requested. Birch Lake claims that Bernum was, among other things, in breach of the applicable agreement with respect to the drilling and completion operations on the two subject wells. This caused loss and damages to Birch Lake including the forfeiture of the company's working interest in certain lands that were held by drilling. In addition, Birch Lake claims that Bernum has breached the AMI agreement, prompting the loss of Birch Lake's working interest in certain other AMI lands, causing consequential damage and loss to the company. Pursuant to the counterclaim, Birch Lake is seeking damages for reduced production and production revenues, improperly seized petroleum substances and improperly withheld information on the initial well and for loss of participation on the second well. Birch Lake is also seeking damages for the loss of the company's working interest in the lands held by the second well and other AMI lands.

Birch Lake Energy Inc. and Sundance Energy Corporation announced that they have agreed to terminate the letter agreement previously announced on March 4, 2013, with respect to the joint venture and proposed business combination, and enter a mutual release with respect to all obligations contemplated pursuant to the letter agreement.

Birch Lake Energy Inc. announced that Bernum Petroleum Ltd. has filed a statement of claim against Birch Lake regarding the company's Lochend Assets, being the non-operated working interest of 40% in certain petroleum and natural gas rights underlying 7,760 gross acres (2,718 net) in the Lochend-Bearspaw area of Alberta. As set out in the court documents, Bernum is claiming that Birch Lake is in default under the related joint operating agreement and is seeking a judgement in the amount of $1.532 million, plus interest in the amount of $11,365. Bernum is also seeking court approval for the sale of Birch Lake's working interest in the Lochend Assets. The company has taken immediate steps to vigorously defend this claim and preserve its rights in the joint venture assets including a detailed review of the completion operations on the initial well which led to the apparent collapse of the production casing string during the frac operation and the resulting loss of more than half the productive well bore. The Corporation is also conducting a detailed review of the drilling operations of the second well during which intermediate casing was not able to be successfully run to depth drilled, resulting in drilling difficulties during the horizontal section and the eventual loss of the horizontal section after nearly reaching total depth. Financial constraints prevented BLK from participating in a re-drill of the horizontal leg and forfeiture of the one-section lease.