Prospectus excerpt:  This short form prospectus qualifies the distribution (the “Offering”) of 2,000,000 preferred units (the “Preferred Units”) of Birchcliff Energy Ltd. (“Birchcliff” or the “Corporation”) at a price of $25.00 per Preferred Unit. Each Preferred Unit will be comprised of: (i) one cumulative redeemable 5-year rate reset preferred share, series A (a “Series A Preferred Share”) of Birchcliff with an issue price of $25.00 per Series A Preferred Share to yield initially 8.00% per annum; and (ii) three common share purchase warrants (each a “Warrant”) of Birchcliff. Each Warrant will entitle the holder thereof to purchase one common share of the Corporation (a “Common Share”) at any time prior to 5:00 p.m. (Toronto time) on or before the date that is 24 months from the Closing Date (as defined herein) at a price of $8.30 per Common Share. The Warrants will be created and issued pursuant to the terms of a warrant indenture (the “Warrant Indenture”) to be dated the Closing Date between the Corporation and Olympia Trust Company (“Olympia”), as Warrant agent thereunder. The Series A Preferred Shares and the Warrants comprising the Preferred Units will separate immediately upon the closing of the Offering. See “Details of the Offering” and “Plan of Distribution”.

The holders of Series A Preferred Shares will be entitled to receive, as and when declared by the board of directors of Birchcliff (the “Board of Directors”) out of moneys of Birchcliff properly applicable to the payment of dividends, fixed cumulative preferential cash dividends for the initial period from and including the date of issue of the Series A Preferred Shares to, but excluding, September 30, 2017 (the “Initial Fixed Rate Period”), at an annual rate of $2.00 per share, payable quarterly on the last day of March, June, September and December in each year (less any tax required to be deducted or withheld by Birchcliff). If any such date is not a Business Day (as defined herein), the dividend will be paid on the next succeeding Business Day. Assuming an issue date of August 8, 2012, the first dividend, if declared, will be paid on October 1, 2012 (being the first Business Day following September 30, 2012) in the amount of $0.2935 per share. See “Details of the Offering”.