VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 2, 2012) - Terrace Energy Corp. (TSX VENTURE:TZR) (the "Company" or "Terrace") is pleased to announce its financial and operating results for the second quarter ended July 31, 2012.
The Company's interim financial statements and management discussion and analysis for the three and six months ended July 31, 2012 are available for viewing at www.sedar.com and on the Company's website at www.terraceenergy.net.
Second Quarter Achievements
- The Company drilled and cased vertical and horizontal extensions on two new wells on its STS Olmos project. Both well bores intercepted the objective formation at targeted depths and the Company successfully drilled approximately 4,200 feet of lateral extensions on each of the wells. The wells confirmed that the formation extends over 5 miles from the Company's initial discovery well (STS 1-667). The Company plans to complete both of these wells later in the 3rd Quarter and expects that they will be primarily oil producers. The Company has a 33% working interest and 25% net revenue interest in each of these wells.
- The Company drilled and cased two wells on the Cutlass project. The wells were drilled over 7 miles apart from each other and both successfully encountered commercial hydrocarbons in their objective formations, including the Eagle Ford Shale formation at the targeted depth. Preparations are underway to complete and place the first well, identified as Cutlass West #1A, on production later this year from a 4,200 ft horizontal lateral extension in the Eagle Ford Shale formation. The Company has secured a 30% working interest and a 22.5% net revenue interest in this well.
- Upon completing a technical evaluation of Cutlass West #1A, the Company exercised its option and paid approximately $580,026 to acquire rights to earn a 30% working interest and a 22.5% net revenue interest on the La Salle County acreage of its Cutlass project.
- The Company's second well, the Cutlass East #1, located on the La Salle County acreage, was drilled to a total vertical depth of 9,898ft and cased. The well bore intercepted the Eagle Ford oil shale and other prospective oil and gas formations. Further evaluation work is scheduled on all such formations before a completion schedule is planned. The Company has secured a 30% working interest and a 22.5% net revenue interest in this well.
Second Quarter Highlights
- Total revenues from oil and gas sales for the quarter were $202,382
- The Company's share of revenues, net of royalties, for the six months from STS 1-667 was $758,138(the Company's share of the costs of STS 1-667 was $1,421,629)
The net loss for the quarter was $240,180 after the deduction of non-cash expenses in the aggregate amount of $83,039 and $27,936 after the deduction of non-cash expenses of $164,094 for the six months.
- STS 1-667 operated for 92 days in the quarter during which time it produced 17,711 barrels of oil and liquids and 58,468 million cubic feet of natural gas.
- The Company's share of oil and gas production from STS 1-667 was approximately 2,240 barrels of oil and liquids at an average price of $92.24 per barrel and 7,396 million cubic feet of natural gas and an average price $2.46 per million cubic feet.
Eric Boehnke, the Company's Chief Executive Officer commented: "The Company's first well continues to perform to industry expectations. The new wells on our STS Olmos project have provided us with confirmation that the productive formation extends over five miles. We are also very excited about our initial assessment of the Eagle Ford Shale on our Cutlass project and look forward to initial production in the near future."
The Company incurred revenue of $202,382 and a loss of $240,180 ($0.00 per share) for the three months ended July 31, 2012. The Company incurred revenue of $758,138 and a loss of $27,936 ($0.00 per share) for the six months ended July 31, 2012.
As at July 31, 2012:
|Exploration and evaluation assets
|Property and equipment
It is expected that production volumes from STS 1-667 will remain stable during the third quarter. The Company expects to complete and bring into production the two wells drilled on the Olmos Project during the 3rd quarter. The Company anticipates bringing the Cutlass West #1 on production during the 3rd or early 4th quarter.
About Terrace Energy
Terrace Energy (www.terraceenergy.net) is an oil & gas development stage company that is focused on unconventional oil extraction in onshore areas of the United States. It currently has non-operating investments in two principal properties situated in Texas with targets in the "Olmos" and "Eagle Ford" formations.
On behalf of the Board of Directors
Eric Boehnke, CEO Terrace Energy
Certain of the statements made in this news release may contain forward-looking statements within the meaning of the United States Securities Exchange Act of 1934 and forward-looking information within the meaning of applicable Canadian securities law (together, "forward-looking statements"). Forward-looking statements include, but are not limited to statements or information with respect to the expected timing of drilling and production, production volumes, and completion of infrastructure. Users of forward-looking statements are cautioned that actual results may vary from the information disclosed in this press release. The material risk factors that could cause actual results to differ materially from the forward-looking statements contained in this press release include: lack of availability of goods and services, regulatory changes, poor weather conditions, 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 statements contained in this press release represent management's best judgment of future events based on information currently available. The material assumptions used to develop the forward-looking statements include: that necessary goods and services will be available on reasonable terms, that regulatory requirements will not change in any material respect, that weather conditions will be favorable, 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 statements, 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.