Terrace Energy Corp.
TSX VENTURE : TZR

Terrace Energy Corp.

February 21, 2012 09:00 ET

Terrace Announces Initial Results of First Well

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 21, 2012) - Terrace Energy Corp. (TSX VENTURE:TZR) -

NOT FOR DISSEMINATION IN THE UNITED STATES

Terrace Energy Corp. (the "Company") is pleased to announce early results from its first horizontal well on its recently acquired STS Project in Texas. The well was drilled to a measured depth of 13,302 feet, including approximately 4,100 feet of horizontal section, and was successfully fracture stimulated in 14 stages.

After less than 10% load recovery, the well continues to strengthen and is currently flowing at a rate of approximately 564 BOPD (barrels of oil per day) and 1.2 MMCFD (million cubic feet per day) of liquid rich gas. There can be no assurance that the flow rate will stabilize at current or higher levels over time.

As previously reported, Terrace purchased an average 26.88% working interest and a 20.16% net revenue interest in approximately 14,400 gross acres (3,875 net acres) in the STS Project. The project acreage has the potential to support up to 60 offset drilling locations.

Dave Gibbs, the Company's President, commented: "We are very pleased with the results at this early stage of the project's development. The current flow rate of our first well is greater than anticipated, which bodes well for the long-term successful development of our acreage position."

About Terrace Energy

Terrace Energy is an oil & gas development stage company that is focused on unconventional oil extraction in onshore areas of the United States. It currently has two principal properties situated in South Texas with targets in the "Olmos" and "Eagle Ford" formations.

APPROVED BY THE BOARD OF DIRECTORS

Eric Boehnke, Chief Executive Officer

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.

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