Terra Energy Corp.

Terra Energy Corp.

September 07, 2012 19:13 ET

Terra Energy Announces Debt Restructuring Process and Expanded Marketing Engagement

CALGARY, ALBERTA--(Marketwire - Sept. 7, 2012) - Terra Energy Corp. ("Terra" or the "Company") (TSX:TT) is pleased to announce that its Board of Directors have approved a debt restructuring proposal from a subordinated debt provider to restructure Terra's existing credit facility.

The subordinated debt facility will be subject to an intercreditor agreement by and among the lender of the subordinated debt facility and Terra's senior lenders, confirmatory due diligence by the subordinated debt provider, and all appropriate regulatory approvals. The subordinated debt facility contemplates a four year term and will be used to reduce the existing senior lending facility, to support a commodity hedging program, to fund day-to-day working capital requirements and to pursue targeted development projects.

In support of the debt restructuring proposal, the Company's syndicate of senior lenders, including the Canadian Imperial Bank of Commerce and ATB Financial, have agreed to amend the existing credit facility to allow for Terra to complete the restructuring contingent upon the intercreditor agreement being completed by September 21, 2012 and conditions precedent being waived by September 30, 2012. Funding of the subordinated debt facility is anticipated to occur by October 16, 2012. Accordingly, Terra's existing credit facility has been extended through to the same date.

In relation to the Company's marketing processes, Terra's Montney process remains on-going and the Company, along with its advisors, has selected October 15, 2012 as a due date for non-binding proposals.

Additionally, the Company has engaged Macquarie Tristone of Macquarie Capital Markets Canada Ltd. and Scotiabank, to undertake a company-wide marketing process in parallel to the unconventional Montney resource assets currently being marketed. In parallel to the current Montney process, Terra is seeking proposals for the purchase of all, or any subset, of its conventional (non-Montney) assets and operations, with the choice of structuring same as an asset or share transaction(s).

The Company would also like to announce the appointment of Blair Scott to the position of General Manager of Production Operations, effective September 1, 2012. Blair has been an integral part of the Terra team since the Company's inception in 2004 and has managed all aspects of the Company's field operations. In conjunction with this appointment, the Company announces the departure of Graham Collins, Vice President of Production. Mr. Collins has made significant contributions to the growth of the organization during his time at the Company. Terra and its Board of Directors would like to thank Mr. Collins and wish him all the best in his future endeavours.

Terra 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's common shares trade on the Toronto Stock Exchange under the symbol 'TT'.

Reader Advisory

All amounts in Canadian dollars unless otherwise specified.

Forward-Looking Statements

This media release may contain certain statements which constitute forward-looking statements or information ("forward-looking statements"), including statements regarding the proposed subordinated debt facility to restructure Terra existing credit facility, the timing of funding under the subordinated debt facility and the due date for non-binding proposals in connection with Terra's Montney process.. The Company cautions that there are no guarantees that: (i) the subordinated debt facility will be completed and the restructuring of Terra's existing facility in the times currently contemplated or at all; or (ii) the various marketing processes and efforts to sell assets of the Company will result in a transaction or, if a transaction is undertaken, the terms or timing of such transaction. Although Terra 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 available to the Company. 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. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed 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 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.
    Bud Love
    Vice President of Finance, & Chief Financial Officer

    Terra Energy Corp.
    Berk Sumen
    Manager, Corporate Affairs
    403.264.7189 (FAX)