Terra Energy Corp.
TSX : TT

Terra Energy Corp.

November 13, 2009 19:24 ET

Terra Energy Announces Results for Third Quarter 2009

CALGARY, ALBERTA--(Marketwire - Nov. 13, 2009) - Terra Energy Corp. ("Terra Energy" or the "Corporation") (TSX:TT) is pleased to release its Financial Statements and related Management's Discussion and Analysis for the three and nine month periods ended September 30, 2009. Copies of Terra Energy's third quarter 2009 results may be obtained at www.sedar.com or www.terraenergy.ca.

"While it has been a challenging year, to date, for natural gas prices, Terra Energy remains strongly positioned to achieve our 'near term' objectives for further growth and balance with respect to our conventional operations," stated Cas H. Morel, President and CEO. "In addition, with our increasing size and improving access to capital markets, we believe we are now able to actively pursue the growth and development of our considerable portfolio of non-conventional resources including our Montney Gas, Montney Oil, and Halfway resource development opportunities."

Third Quarter 2009 Highlights

  • Average production per day increased 40 percent to 6,117 barrels of oil equivalent ("boe") per day compared to 4,370 boe per day in the third quarter 2008.
  • During the third quarter, the Corporation generated positive cash flow from operations of $6,418,133 ($0.07 per basic and diluted share) and an operating netback of $14.15 per boe.
  • Gross revenue for the third quarter 2009 decreased 36 percent to $13,583,659 from $21,199,751 in the same period of 2008. The decrease was largely attributable to lower natural gas prices.
  • Production expense decreased by 28 percent to $7.20 per boe in the third quarter 2009 compared to $10.02 per boe during the same period in 2008.
  • During the third quarter, the Corporation closed the acquisition of assets in the Peace River Arch consisting of approximately 2,200 boe per day for total consideration of approximately $75.5 million. The acquisition added significant production and reserves while also materially improving the Corporation's oil to gas weighting, development portfolio, and adding considerable undeveloped acreage. The acquisition was funded from proceeds of a $20.3 million private placement equity financing with the remainder funded from the Corporation's bank line which was increased to $90 million in conjunction with closing of the acquisition.

Subsequent to the third quarter, on November 9, 2009, the Corporation announced an agreement to sell its small, non-operated interests in the mature Boundary Lake Units 1 (2.3515%) and 2 (4.7129%) for gross proceeds of $24 million, subject to customary closing adjustments. The transaction is expected to close on or before December 15, 2009.

Terra Energy is a junior oil and gas corporation engaged in the exploration for, and development and production of, natural gas and oil in Western Canada. Terra Energy's common shares trade on the Toronto Stock Exchange under the symbol 'TT'.

READER ADVISORY

All amounts in Canadian dollars unless otherwise specified

A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such disclosure of boe's may be misleading, particularly if used in isolation.

This media release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the Corporation's ability to achieve further growth and balance with respect to its conventional operations, its ability to actively pursue the growth and development of its non-conventional resource development opportunities as a result of its increasing size and improving access to capital and the expected closing of the disposition of the Corporation's interests in Boundary Lake Units 1 and 2. Although Terra Energy believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been 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. Risks include, but are not limited to: the risks associated with the oil and gas industry (eg., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Terra Energy 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.

Contact Information

  • Terra Energy Corp.
    Dean N. Morrison, CFA
    Vice-President, Corporate Affairs
    (403) 699-7777
    www.terraenergy.ca