Terra Energy Corp.
TSX : TT

Terra Energy Corp.

March 24, 2010 09:00 ET

Terra Energy Corp. Announces Completion of $22.5 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - March 24, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Terra Energy Corp. ("Terra Energy" or the "Company") (TSX:TT) is pleased to announce that the Company has closed its previously announced "bought-deal" financing for gross proceeds of $22.5 million (the "Financing"), with a syndicate of underwriters led by GMP Securities L.P. and including Scotia Capital Inc., Dundee Securities Corporation, Acumen Capital Finance Partners Limited, Mackie Research Capital Corporation and Jennings Capital Inc. Pursuant to the Financing, an aggregate of 5 million common shares in the capital of Company ("Common Shares") were issued at a price of $1.80 per share for gross proceeds of $9,000,000 and 6.25 million common shares in the capital of the Company were issued on a "flow-through" basis under the Income Tax Act (Canada) ("Flow-Through Shares") at a price of $2.16 per share for gross proceeds of $13,500,000. 

Sprott Asset Management LP, on behalf of certain funds, has participated in the Financing for a total investment of $14 million.

The net proceeds of the Financing will be used by the Company to temporarily reduce indebtedness under the Company's credit facility as at the date of the closing of the Financing, which will be subsequently redrawn and applied as needed to fund the Company's 2010 Capital Expenditure Plan and Budget including, in the case of proceeds from the issuance of the Flow-Through Shares, the incurring of Canadian exploration expenses before December 31, 2011, and for general corporate purposes.

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 Toronto Stock Exchange under the symbol "TT".

READER ADVISORY

This media release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the anticipated use of the net proceeds of the Financing. The intended use of the net proceeds of the Financing by the Company might change if the board of directors of the Company determines that it would be in the best interests of the Company to deploy the proceeds for some other purpose. 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 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. 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. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail 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 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.

Contact Information

  • Terra Energy Corp.
    Mr. Bud Love
    Vice President, Finance and Chief Financial Officer
    (403) 699-7777