VANCOUVER, Aug. 20, 2014 /CNW/ - Terrace Energy
Corp. (the "Company") (TSXV: TZR, OTCQX: TCRRF, FRANKFURT: 2TR) is pleased to provide the
following operations update.
As previously announced, the Company recently completed a
$23 million common share offering
primarily to fund exploration drilling activities on its
Big Wells and Maverick County projects and obtained through
a subsidiary a US$75 million
unsecured credit facility (which is non-recourse to the Company) to
drill and develop it STS Olmos project.
Dave Gibbs, the Company's
President and CEO commented: "These financings, which consumed much
of management's recent focus, were absolutely critical in order to
fully execute the Company's 2014 and 2015 exploration and
development plans. We have commenced our expanded drilling program
and are now positioned to focus on production targets."
The Company reports the following progress on each of its
material projects.
Big Wells Buda Development Project, Dimmit County, Texas
Drilling operations are progressing on the initial Buda development well, the Price #1H. As
planned, the well has been drilled to a vertical depth of 7,445' in
order to obtain petrophysical data on the Buda formation before turning the well
horizontal. The well encountered 128' of oil saturated limestone as
anticipated with porosity readings as high as 7% and strong
indications of natural fracturing. Operations are underway to
sidetrack the pilot hole and prepare the wellbore for
underbalanced, horizontal drilling. Once protective casing is set
through the Eagle Ford Shale, the well will be completed as an
open-hole horizontal in the Buda Limestone.
The Company has acquired an extensive "3-D" seismic survey over
the leasehold position and has identified the next three drilling
locations. Permitting is underway.
The project acreage is located in the core of the Eagle Ford
Trend in South Texas and in close
proximity to a number of prolific horizontal wells drilled into the
naturally fractured Buda Limestone, including the publicized Hughes
Heitz 302 3H, which produced approximately 300,000 barrels of light
sweet crude oil in its first 24 months of reported production,
according to the Texas Railroad Commission lease production
reporting system as of June 2014.
NW AWP Olmos Development Project, McMullen County, Texas
Drilling operations continue on the Quintanilla #1H Olmos
development well. The well encountered the Olmos pay sand as
targeted at approximately 8,900' true vertical depth. To date, we
have drilled approximately 3,400' of horizontal lateral in the
target zone on our way to a planned total depth of 13,500' measured
depth, with approximately 4,400' of horizontal lateral section. We
anticipate concluding drilling operations in the next few days and
will complete the well using multi-stage hydraulic fracturing.
Completion operations will commence upon conclusion of the drilling
operations and demobilizing the drilling rig. The Company owns a
33% working interest in this well and the assigned 200 acre
drilling unit.
Upon successful completion of the Quintanilla well, the Company
will also have earned the option to acquire a 33% working interest
in an additional 3,400 (approx.) acres offsetting the well.
STS Olmos Development Project, McMullen and LaSalle Counties, Texas
Full scale development operations are underway on our STS Olmos
Development Project with the initiation of our multi-well pad
drilling operations. We are currently moving the Orion "Altair" rig
onto our first three well drilling pad. This is a "walking rig"
configuration capable of moving itself between multiple wellheads
on each pad. The STS #1-6H, #2-6H and #3-6H will be drilled
sequentially from the initial pad. The planned sequence will
include drilling and casing surface holes on each of the three
wells at a depth of approximately 5,000', then drill each well to a
total depth of approximately 14,500' measured depth including
approximately 5,200' of horizontal lateral in the targeted Olmos
sandstone. Once drilling operations are concluded on the
Section 6 pad, the rig will be moved to its next planned three-well
pad site on the project and hydraulic fracturing equipment will be
moved in on the Section 6 pad to simultaneously complete these
wells in a "zipper frac" sequence.
As previously reported, the current development model for the
STS Olmos Development Project envisions the potential for up to
approximately 145 drilling locations. The Company will continue
drilling multi-well pad locations using this "walking rig"
configuration and will likely add a second rig to the project in
2015.
Maverick County Project, Maverick and Zavalla Counties, Texas
"Top- hole" drilling operations are complete on our first Buda
Limestone development well, the Chittim Heirs #3H. The well has
been drilled through the base of the Eagle Ford Shale and 5 ½"
casing has been set at approximately 75 degrees in preparation for
completing the well using an open-hole, underbalanced drilling
technique with coiled tubing. The coiled tubing unit and
underbalanced equipment are under contract and are expected in the
field shortly upon completion of other projects currently in
progress.
Permitting is underway for an additional Buda Limestone
horizontal well to be drilled in the Southwest portion of the Ranch
in Maverick County as well as two
vertical wells in the Northeast to delineate potential associated
with a large "Serpentine Plug" feature identified in the seismic
records. The drilling of these three wells is scheduled to be
completed in 2014, with additional Buda development wells scheduled for early
2015.
Dave Gibbs, further commented:
"We are pleased with the progress we have achieved to date on all
of our projects and are excited about the high level of activity
going forward into the fall. We have secured a healthy balance
sheet and are moving each of our major projects into active
development. We expect to achieve a number of key successes and
milestones over the next several months as these programs are
executed."
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.
ON BEHALF OF THE BOARD OF DIRECTORS
"Dave Gibbs"
Dave Gibbs, CEO
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.
Forward-Looking Information
This press release includes forward-looking information and
forward-looking statements (together, "forward-looking
information") within the meaning of applicable Canadian and
United States securities laws.
Forward-looking information includes, but is not limited to:
information regarding plans for the development of the
Company's projects and the timing thereof, including the potential
number of drilling locations on the STS Olmos Development Project
and expectations regarding achieving key successes and milestones
over the next several months. Users of forward-looking information
are cautioned that actual results may vary materially 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 its projects at a reasonable
price; changing costs for and availability of required goods
and services; regulatory changes; risks relating to disagreements
or disputes with joint venture partners, including any failure of a
joint venture partner to fund its obligations; volatility in market
prices for oil and natural gas; and all of the other risks and
uncertainties normally associated with the exploration for and
development and production of oil and gas, including geologic
uncertainties, unforeseen drilling hazards, geological, technical,
drilling and processing problems, accidents and adverse weather
conditions. 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 the
Company will be able to access infrastructure in the vicinity of
its 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 its 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. Statements regarding future drilling locations are
based on geologic interpretations which are subject to revision as
further data is developed. The Company does not assume the
obligation to update any forward-looking information, except as
required by applicable law.
SOURCE Terrace Energy Corp.