VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/22/13 -- Terrace Energy Corp. (the "Company") (TSX VENTURE: TZR)(OTCQX: TCRRF)(FRANKFURT: 2TR) is pleased to provide the following operations update.
The status of each of the Company's current projects is as follows.
STS Olmos Project
The first STS Olmos well in our 2013 drilling program (SP5 1-2H) was spud on March 31. The well reached a total vertical depth of approximately 9,034 feet on April 20. Drilling operations were successfully executed, and our target objective was encountered as programmed. Completion operations will be scheduled in May depending on equipment availability. Upon completion, SP5 1-2H will be the fourth well placed into production on the STS Olmos project to date.
Completion operations were commenced on the previously drilled Cutlass West #A1 well and the project operator commenced to fracture stimulate the well on April 12. The well is targeted within the regionally prolific Eagle Ford oil window. Work is progressing on schedule and should be completed shortly. Flowback operations are expected to begin before the end of April and production to be initiated during May. The Cutlass West #A1 well will be the first well completed and place into production on the Cutlass project. Additional drilling is planned for the second quarter of the Company's fiscal year.
South Texas Acquisition
The Company has received TSX Venture Exchange approval of the proposed transactions with BlackBrush Oil & Gas LLP ("BlackBrush"), which were previously reported in the Company's press release dated February 26, 2013. Terrace and BlackBrush are preparing final documentation to codify the letter of intent between the parties.
As previously reported on December 21, 2012, the Company was granted an option to acquire interests in certain mineral leases in Finney County, Kansas. The Company has completed its due diligence and as a result of its geological studies and recent underperforming results by offset operators, the Company has decided not to exercise its option. The non-refundable option payment of $225,150 has been expensed in the Company's records.
Fourth Quarter Highlights(i)
-- Gross revenues from oil & gas sales for the three months ended January 31, 2013 were approximately US$2.3 million.-- The Company's aggregate share of production from all three of its STS Olmos wells for the quarter was approximately 19,761 barrels of oil, which were sold at an average price of US$98.32 per barrel of oil and 40 million cubic feet of natural gas, which was sold at an average price US$3.13 per thousand cubic feet.
The Company's complete results of operations for the quarter and for the year ended January 31, 2013 will be reported on or before May 31, 2013, the date by which the Company is required to present its annual audit financial statements.
Dan Carriere, the Chairman of the Board of Directors, commented, "Terrace was organized in June 2011 to capitalize specifically on unconventional oil and gas opportunities in South Texas. We were, and remain, attracted to the strong economics of the region. The quality of the light sweet crude produced in the area commands a premium to WTI quoted prices. The proximity to pipeline infrastructure enables strong monetization of the rich liquids and dry gas components of our production in addition to oil sales. Terrace's operations team has worked in the region throughout their careers and their long standing relationships have been critical in securing our current projects and several new opportunities we are assessing. We are now strategically positioned to rapidly expand our operations."
About Terrace Energy
Terrace Energy is an oil & gas development stage company that is focused on unconventional oil & gas extraction in onshore areas of the United States, particularly in South Texas.
ON BEHALF OF THE BOARD OF DIRECTORS
Eric Boehnke, Chief Executive Officer
(i)Past production revenues are not necessarily indicative of future revenues. Future production revenues are dependent upon, among other things, the realized sales prices of oil & gas, the production volumes of completed wells, which may decline over time, and the timing of completing new wells.
This press release includes "forward-looking information" within the meaning of applicable Canadian securities laws, including information regarding the development of the STS Olmos Project and the timing thereof and the timing for flowback operations and production for the Cutlass Project. Users of forward-looking information are cautioned that actual results may vary from the forward-looking information disclosed in this press release. The material risk factors that could cause actual results to differ materially from the forward-looking information contained in this press release include changes to the Company's ability to access infrastructure in the vicinity of the STS Olmos and Cutlass Projects at a reasonable price, costs for and availability of required goods and services, regulatory changes and all of the other risks and uncertainties normally associated with the exploration for and development and production of oil and gas. The forward-looking information contained in this press release represents management's best judgment of future events based on information currently available. The material assumptions used to develop the forward-looking information include: that production from the wells at the STS Olmos Project will continue as projected, that the Company will be able to access infrastructure in the vicinity of the STS Olmos and Cutlass Projects on reasonable terms, that the Company will be able to access the goods and services necessary in order to conduct further exploration, development and production at the STS Olmos and Cutlass Projects on reasonable terms, that regulatory requirements will not change in any material respect and that other aspects of the Company's operations will not be affected by unforeseen events. The Company does not assume the obligation to update any forward-looking information, except as required by applicable law.
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.
Terrace Energy Corp.
Chief Executive Officer
604 628-4552 or 713.227.0010
604 687 0885 (FAX)