Terra Energy Corp.
TSX : TT

Terra Energy Corp.

June 26, 2009 20:18 ET

Terra Energy Corp. Receives Shareholder Consent to Bought Deal

CALGARY, ALBERTA--(Marketwire - June 26, 2009) - Terra Energy Corp. (TSX:TT) ("Terra Energy" or the "Company") is pleased to announce that it has received written consent from holders of more than 50% of its common shares to the previously announced offering (the "Offering") of subscription receipts of the Company ("Subscription Receipts").

The Offering consists of a total of 14 million Subscription Receipts (including 7 million Subscription Receipts issued pursuant to the exercise, in full, of the option granted to the underwriters to increase the size of the Offering) at $1.45 per Subscription Receipt for anticipated gross proceeds of $20.3 million on closing of the Offering. Each Subscription Receipt purchased under the Offering is exchangeable for one unit ("Unit") of the Company. Each Unit is comprised of one common share of the Company and one-half of one common share purchase warrant ("Warrant"). Each whole Warrant shall be exercisable into one common share of the Company at a price of $1.90 per common share for a period of 24 months from the closing date of the Offering.

Pursuant to the Toronto Stock Exchange ("TSX") Company Manual, shareholder consent is required where the listed securities issuable pursuant to the Offering are deemed to be offered at a discount to the market price and the aggregate number of such issuable securities is greater than 25% of the number of listed securities of the issuer prior to the closing of the Offering on a non-diluted basis. The common shares of the Corporation issuable upon exercise of the Warrants are deemed by the TSX as being issued at a price per security less than the market price at the time of conversion and are regarded as part of the number of securities being issued pursuant to the Offering. Consequently, the number of common shares deemed to be issuable pursuant to the issuance of the Units and the exercise of the Warrants is 21,000,000 common shares which is approximately 28.1% of the currently outstanding 74,771,978 common shares of the Company. It is not anticipated that the Offering could materially affect control of the Company and it is not expected that any new persons or entities will become holders of 10% of the outstanding common shares of the Corporation as a result of the Offering.

It is anticipated that one insider will be acquiring up to 6,350,000 Subscription Receipts or approximately 45.4% of the Offering and upon closing of the Offering and subsequent exchange of Subscription Receipts into Units will own approximately 21,450,000 common shares or approximately 24.16% of the outstanding common shares.

The net proceeds of the Offering will be used by Terra Energy, in part, to fund the recently announced Peace River Arch acquisition upon its anticipated closing on or about July 15, 2009.

Closing of the Offering is expected to occur on or about July 7, 2009 and is subject to customary conditions and regulatory approvals, including the approval of the TSX.

READER ADVISORY

This media release contains certain statements which constitute forward-looking statements or information, including the closing of the Offering, control of the Company, holders of 10% of the outstanding common shares, insider participation in the Offering and the closing of the Peace River Arch acquisition. 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 information. As such, readers are cautioned not to place undue reliance on the forward looking information, 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.

Terra Energy is a junior oil and gas company 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'.

Contact Information

  • Terra Energy Corp.
    Cas H. Morel
    President & CEO
    (403) 699-7777
    or
    Terra Energy Corp.
    Bud K. Love
    Vice President, Finance & CFO
    (403) 699-7777
    or
    Terra Energy Corp.
    Dean N. Morrison, CFA
    Manager, Corporate Affairs
    (403) 699-7777