Terra Energy Corp.
TSX VENTURE : TTR

Terra Energy Corp.

May 29, 2009 09:00 ET

Terra Energy Announces Results of First Quarter 2009

CALGARY, ALBERTA--(Marketwire - May 29, 2009) - Terra Energy Corp. (TSX VENTURE:TTR) ("Terra Energy" or the "Company") is pleased to release its Financial Statements and related Management's Discussion and Analysis for the three month period ended March 31, 2009. Copies of Terra Energy's First quarter 2009 results may be obtained at www.sedar.com or www.terraenergy.ca.

Q1-2009 Highlights:

- Average production per day increased 25.9% to 5,884 BOED during the three month period ended March 31, 2009, compared to 4,675 BOED during the same period in 2008.

- Despite lower commodity prices, Operating Netbacks increased approximately 3% year over year from $7.5 million to $7.7 million during the three month periods ended March 31, 2009 equating to $0.10 per share. The Company generated Cash Flow from Operations of $6.2 million for the quarter or $.09 per share.

- The Company reported a net loss for the three month period ended March 31, 2009 of $920 thousand compared to a loss of $1.12 million for the same period for 2008.

- Operating expense per unit of production decreased 13.6% year over year from $11.08 per BOE to $9.57 per BOE for the three month period ended March 31, 2009.

- During Q1-2009, the Company acquired approximately 115,646 net acres of crown land in the Peace River Arch area of western Alberta and British Columbia at an average price of $17.05 per acre.

- The Company accelerated some of its drilling plans for the year. In total, the Company drilled 5 wells (3.7 net) during this period, all of which have been cased, and completed or awaiting completion.

Guidance

On April 20th, 2009, Terra Energy announced that it had agreed to purchase all of the shares of Tecton Energy Canada ULC ("Tecton") in a cash and share exchange transaction valued at $8 million Cdn. The Company has agreed to pay $4 million in cash and issue 2,580,465 common shares priced at $1.55 per share. 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. The majority of 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.

Terra Energy has received approval to list its common shares on the Toronto Stock Exchange (the "TSX"). The Company's common shares will commence trading on the TSX at market open on Monday, June 1, 2009 under the symbol "TT". The Company's common shares will be delisted from the TSX Venture Exchange in conjunction with the commencement of trading on the TSX.

Terra Energy continues to maintain a strong balance sheet. The Company will continue to position itself for future growth and consider opportunities for value creation in the current economic environment.

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.

This media release contains certain statements which constitute forward-looking statements or information, including completion of the Tecton 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. Additional information on these and other factors that could affect Terra Energy's operations or financial results are included in Terra Energy's Annual Information Form and other documents on file with Canadian securities regulatory authorities 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, Finance and Chief Financial Officer
    (403) 699-7777
    Website: www.terraenergy.ca