Terra Energy Corp.
TSX VENTURE : TTR

Terra Energy Corp.

March 17, 2008 17:44 ET

Terra Energy Corp. Announces 2008 Capital Expenditure Plan

CALGARY, ALBERTA--(Marketwire - March 17, 2008) - Terra Energy Corp. ("Terra Energy" or the "Company") (TSX VENTURE:TTR) is pleased to announce that its Board of Directors has approved the Capital Expenditure Plan for 2008 and a Capital Budget of approximately $30 million. "With the back-bone of our south peace gathering system completed during 2007, Terra Energy's 2008 capital expenditure program will focus on development programs, exploiting past exploration success," said Cas H. Morel, President and CEO of Terra Energy. "It is imperative that we live within our means and I am pleased to announce that our plans for the year allow us to grow production and reduce debt, all within projected cash flows."

Terra Energy's 2008 capital expenditure program is designed to be funded entirely from the Company's cash flow from operations (estimated approx. $30 million). Cash flow from operations has been forecasted based upon an estimated average natural gas price of $7.25 per GJ for the calendar year.

The Company will revisit its 2008 Capital Expenditure Plan and Budget during 2008 when and if additional funds become available either through increased production revenue or possible asset sales. Should this occur, it would be the Company's intention to accelerate its development program for the Sunrise Gas Field. The Capital Expenditure Plan for 2008, as currently approved, anticipates a production exit rate of 5,200 boed for Terra Energy.

The infrastructure component of Terra Energy's Capital Expenditure Plan (approximately $8 million) consists primarily of the final leg of our South Peace gathering system. This final leg consists of a 25.4km pipeline tying-in the Eight Mile North gas field and the Sunrise gas field to the Company's recently completed facilities at Tower. The line will be constructed in three stages, with the first stage currently under construction.

The drilling and completions component of the Capital Expenditure Plan (approximately $20 million) will, once again, be largely directed at the Company's Fort St. John core area. The Company expects to drill 13 gross (7.2 net) wells, many of which have multi-zone potential.

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.

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