Terra Energy Corp.

Terra Energy Corp.

November 09, 2009 20:41 ET

Terra Energy to Sell $24 Million in Assets

CALGARY, ALBERTA--(Marketwire - Nov. 9, 2009) - Terra Energy Corp. ("Terra Energy" or the "Corporation") (TSX:TT) is pleased to announce that it has entered into a Purchase and Sale Agreement (the "Agreement") to sell its small, non-operated interests in the Boundary Lake Units 1 and 2 for gross proceeds of $24 million, subject to customary closing adjustments (the "Transaction").

"This is another example of Terra Energy crystallizing value for our shareholders from of a mature, non-operated asset to enable re-investment in new growth oriented development prospects" stated Cas H. Morel, President & CEO. "The proceeds of the Transaction will initially lower the Corporation's bank debt, and will be redeployed to fund the development and acquisition of reserves which we anticipate will provide higher levels of production and create incremental value for our shareholders."

Under the terms of the Agreement, Terra Energy will sell its 2.3515 percent unit interest in Boundary Lake Unit 1 and a 4.7129 percent unit interest in Boundary Lake Unit 2. The Transaction is anticipated to close on or before December 15, 2009. The closing of the Transaction is subject to customary approvals and conditions.

Current unit interest production related to the Transaction is approximately 140 barrels of oil equivalent ("boe") per day with proved plus probable reserves of approximately 1.6 million boe.

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'.


All amounts in Canadian dollars unless otherwise specified

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 ("forward-looking statements"), including the lowering of net indebtedness and the Corporation's ability to redeploy the Transaction proceeds to fund the development or acquisition of growth oriented development prospects and reserves that will provide higher levels of production and create incremental value for our shareholders. 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.
    Dean N. Morrison, CFA
    Vice-President, Corporate Affairs
    (403) 699-7777