CALGARY, ALBERTA--(Marketwired - Dec. 23, 2013) - Terra Energy Corp. ("Terra" or the "Company") (TSX:TT) is pleased to announce that it has entered into a new $25 million secured lending facility (the "Facility" or "Agreement") with a Senior Canadian Chartered Bank.
The Facility is comprised of a $22.5 million revolving operating demand line and a $2.5 million non-revolving acquisition/development demand line with an annual renewal date of May1st. The proceeds of the Facility will initially be utilized to repay and replace the Company's former lending facility, with the balance being applied towards working capital.
In accordance with the terms and conditions of the Agreement, Terra will continue to strengthen its balance sheet with the objective of adding $5 million of additional net capital during calendar 2014 through a combination of equity capital (common or preferred), subordinated debt capital or non-core asset proceeds, $2 million of which will be targeted prior to the scheduled annual review in 2014. In addition, Terra has, subject to availability and pricing, committed to entering into various defensive natural gas hedges on a minimum volume of 7.5MMcf/day on a quarter by quarter basis through to the end of 2015 at pricing equivalent to $3.25 per Mcf, or better.
In the near term, the Facility will allow the Company to proceed with many capital projects which have been placed on hold pending completion of this refinancing, including the funding of certain pipeline projects to tie-in existing tested wells and many recompletion projects targeting oil and natural gas liquids.
With the support of a Senior Banking partner and a strengthened balance sheet in place, Terra is now in a position to advance it's "post-Montney" strategy for 2014 and beyond. Additional guidance on this strategy will be shared with the marketplace in the coming weeks.
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'.
This media release may contain certain statements which constitute forward-looking statements or information ("forward-looking statements"). Although Terra believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate. 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.