Terra Energy Corp.
TSX VENTURE : TTR

Terra Energy Corp.

April 20, 2009 09:00 ET

Terra Energy Acquires Tecton Energy Canada

CALGARY, ALBERTA--(Marketwire - April 20, 2009) - Terra Energy Corp. ("Terra Energy" or the "Company") (TSX VENTURE:TTR) is pleased to announce that it has agreed to acquire all of the shares of Tecton Energy Canada ULC ("Tecton") in cash and share exchange transaction valued at $8 million Cdn. Terra Energy has agreed to pay $4 million in cash and issue $4 million in common shares priced at $1.55 per share (representing a five-day weighted average price of the Company's stock). Closing of the transaction is subject to regulatory approvals and is scheduled to occur in late May, 2009 following due diligence reviews to be performed on Tecton.

"The current economic downturn and low commodity price environment provide Terra Energy with many growth opportunities.", said Cas H. Morel, President and CEO of Terra Energy. "Prior to embarking on deals which may be more oil weighted or which involve new fields of operation, the Company has decided to further solidify its position in the Fort St. John area of British Columbia with this strategic acquisition. The opportunity set and fit with our existing land base and infrastructure is compelling."

Tecton is a private company whose assets consist primarily of 140 gross sections of P&NG mineral rights (71 net) located in the immediate vicinity of Fort St. John. These lands are either adjacent to or proximal to lands currently owned by Terra Energy. The mineral rights cover approximately 89,910 gross acres (46,011 net), with Montney rights throughout and many sections in which all mineral rights are included from surface to basement.

In May of 2008, Terra Energy sold mineral rights in only the Montney formation in approximately 110 sections of land for a total purchase price of approximately $67 million. The Tecton lands do have the potential for Montney gas. More important to Terra Energy, however, is that the Tecton lands have potential in numerous other formations which the Company has been exploiting over the past five years, including the Baldonnel, Charlie Lake, Halfway, Doig, Belloy and Kiskatinaw formations.

As a result of the proximity of the Tecton lands to the Company lands, the Company's existing seismic data base can be used and easily expanded to assist in the exploitation of these new lands. Furthermore, the Company's significant investment over the past three years in building pipelines and other infrastructure will be rewarded through the development of the multi-zone potential from the Tecton lands.

A map of the combined Terra Energy lands and the Tecton lands is available for viewing at the Company's website, at www.terraenergy.ca.

READER ADVISORY

This media release contains certain statements which constitute forward-looking statements or information, including completion of the acquisition, development potential and the positioning of the Corporation for future growth and value creation. 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 TSX Venture Exchange under the symbol 'TTR'.

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.

Contact Information

  • Terra Energy Corp.
    Mr. Bud Love
    Vice President of Finance and Chief Financial Officer
    (403) 699-7777