Terra Energy Corp.
TSX VENTURE : TTR

Terra Energy Corp.

March 19, 2007 09:15 ET

Terra Energy Announces New Discovery at Eight Mile North

CALGARY, ALBERTA--(CCNMatthews - March 19, 2007) - Terra Energy Corp. (TSX VENTURE:TTR) ("Terra Energy" or the "Company") is pleased to announce a new discovery at its Eight Mile Field/North. The Company, and its partners, have just completed a seventy two hour production flow test on the Terra et al 7-8-81-17 W6M well (the "7 of 8 Well"). The 7 of 8 Well was drilled late in 2006 as an exploration well targeting the Triassic Age formations, including the Halfway and Doig, and reached a total depth of 1,988 meters. The 7 of 8 Well was logged and cased last December, and has remained standing until the recent completion operation. The logs indicated approximately 9 meters of potential porosity in the one interval tested, with average porosities of 9.5%.

The 7 of 8 Well was completed in early March 2007 and the seventy two hour production test was conducted March 14 through 17, 2007. After fracture stimulation the final test rate was 3.5 mmcf/day at a flowing pressure of 7,700 kpa.

"This is an exciting new discovery for Terra Energy, and proves up an entirely new play within our Fort St. John core operating area." Said Cas H. Morel, President and CEO. "Our geotechnical team has clearly demonstrated its capability when it comes to finding these tighter sands of Triassic age."

In the absence of historical production information, it is difficult to estimate the actual size of the new gas pool or how the 7 of 8 Well will actually perform when placed on production. Terra Energy and its partners are proceeding with plans to drill additional wells south of the 7 of 8 Well with a view towards delineating the size of the pool. The location of the 7 of 8 Well was selected because it was projected as the highest and most northerly location on the defining seismic anomaly. The first follow-up location is planned in Section 5 of the same township, with a second follow-up location being discussed.

Only upon receipt of the results of further delineation wells will Terra Energy and its partners be in a position to announce a full field development plan for the Eight Mile Field North. However, Terra Energy has commenced scouting of a right-of-way with a view towards linking the Eight Mile Field North to the Company's planned central compression and dehydration facility in the Tower Field. This would involve the construction of approximately five miles of pipeline, and would be subject to regulatory approvals and to the successful completion of a crossing of the Peace River.

The 7 of 8 Well was part of a farm-out arrangement entered into by Terra Energy on or about October 12, 2006 with three industry partners, including Regal Energy Ltd., whereby the farmee group committed to approximately 80% of the cost of two farm-in wells to earn an approximate 48% working interest in two sections per well. The farm-out arrangement includes a rolling option to continue drilling and earning on the same basis in the total 22 Sections making up the Eight Mile Field North. Terra Energy is paying a 20% cost share and as farmor is being carried for approximately 32% by the other parties. Terra Energy's working interest will be approximately 20% plus the carried gross over-riding royalty before payout and 52% after payout.

The new discovery in Eight Mile North represents the second of three separate and distinct Triassic Doig plays which the Company has identified. The Company previously announced success in the first of these three plays, which has been referred to as the Eight Mile Field South, including the 3-3-81-17W6M well and the 9-4-81-17W6M well. The Eight Mile Field South is scheduled to be placed on production by September of 2007, as the Company has committed to 3.25mmcf/day of production towards a gas plant being constructed by a midstreamer in the area. The third Triassic Doig play is planned to be drilled in the fourth quarter of 2007. The Company's lands in Eight Mile include approximately 86 gross sections of land in total where Terra Energy holds an average working interest of approximately 85%.

READER ADVISORY

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.

The media release may contain forward-looking statements including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These 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. Additional information on these and other factors that could affect Terra Energy's operations or financial results are included in Terra Energy's reports on file with Canadian securities regulatory authorities.

The reader is further cautioned that estimating reserves requires judgments and decisions based upon available geological, geophysical, engineering and economic data. These estimates may change, having either a positive or negative effect on the net earnings of the Company as further information becomes available and as the economic environment changes.

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'.

The TSX Venture Exchange does not accept 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
    Website: www.terraenergy.ca