CALGARY, ALBERTA–(Marketwired – July 9, 2013) – Terra Energy Corp. (“Terra” or the “Company”) (TSX:TT) is pleased to announce that the Company has closed on the sale of the balance of its Montney assets in northeast British Columbia to Crew Energy Inc. (“Crew”) for gross cash proceeds of $36 million.
This is the final stage of a three part transaction with Crew involving the sale by the Company of its Montney assets in northeast British Columbia for combined gross proceeds of $78 million. The Company initially closed on the sale of Montney assets to Crew in December 2012, for gross proceeds of $22 million, which included Montney assets in Monias and Groundbirch. On February 28th, 2013 the Company completed the second stage of the transaction involving Montney assets located in Stoddart, Eagle and Attachie to Crew for $20 million gross proceeds. This third and final stage of the transaction involved Montney assets in Altares, Hudson and Mica but did not include any production.
Proceeds from this final stage, less standard industry adjustments and commissions, will be used to pay down debt and strengthen the Company’s balance sheet. It is estimated that the Company’s total net debt following closing is approximately $20 million. Terra’s average daily production for the first quarter of 2013 was 4,469 boe/d.
Terra is a junior oil and gas corporation engaged in the exploration for, and development and production of, natural gas and oil in Western Canada. Terra’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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1; utilizing a conversion of a 6:1 basis may be misleading as an indication of value.
This media release may contain certain statements which constitute forward-looking statements or information (“forward-looking statements”) including: proceeds from the sale will be utilized by the Company to pay down debt and strengthen the balance sheet and total net debt of the Company following closing is estimated to be approximately $20 million. Although Terra believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate. Those expectations, factors and assumptions are based upon currently available information available to the Company. 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. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed 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 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.
Vice President of Finance & Chief Financial Officer
Terra Energy Corp.
Manager, Corporate Affairs