Terrex Energy Inc. - Announces Execution of Acquisition Purchase and Sale Agreement and Resumption of Trading
07 March 2011 - 11:00PM
PR Newswire (Canada)
CALGARY, March 7 /CNW/ -- CALGARY, March 7 /CNW/ - Terrex Energy
Inc. ("Terrex" or the "Company") (TSX-V - TER) announces that the
Company has entered into a Purchase and Sale agreement with an arms
length party for the acquisition of certain producing oil and
natural gas properties in the Two Creek area of central Alberta
which acquisition was previously announced by the Company on
February 8, 2011. This acquisition is subject to approval by TSX
Venture Exchange ("TSXV"). On March 4, 2011 pursuant to their
review, the TSX Venture Exchange has advised that the Company's
common shares are expected to resume trading on the TSXV effective
March 7, 2010. The acquisition price for the properties has been
reduced to $13 million from the $16.1 million, referred to in the
Company's previous news release, primarily as a result of revisions
of certain non-producing natural gas reserves. The properties are
characterized by large original oil-in-place reservoirs with
relatively low recoveries to date. Terrex management believes
optimization and enhanced oil recovery programs, consistent with
the Company's overall business plan, can significantly increase
production and recoverable reserves. The Company intends to
commence the planning, evaluation and development of such programs
immediately following closing. The properties consist of a 100%
working interest in 4,320 acres of land, including related
production infrastructure, in the Two Creek area of west central
Alberta. December 2010 production from the property was
approximately 250 boe/d comprised of 210 barrels of oil and natural
gas liquids, and 300 mcf/d of natural gas. GLJ Petroleum
Consultants Ltd. ("GLJ") completed an independent reserves
assessment and evaluation of the Two Creek property, in accordance
with National Instrument 51-101, having an effective date as at
December 31, 2010. The following provides a summary of the GLJ
reserve assessment.
_____________________________________________________________________
|Reserves | Oil |Natural Gas | NGls |Oil Equivalent | | |Mbbl((1))|
MMcf((2)) |Mbbl((1))| MBoe((3)) |
|____________________|_________|____________|_________|_______________|
|Proved Producing | 397 | 371 | 5.3 | 464 |
|____________________|_________|____________|_________|_______________|
|Proved Plus Probable| | | 6.6 | | |Producing | 506 | 462 | | 589 |
|____________________|_________|____________|_________|_______________|
Notes: (1) Mbbl means thousand barrels. (2) MMcf means
million cubic feet. (3) MBoe means thousand barrels of oil
equivalent. The acquisition will be effective as of January 1, 2011
and is expected to close on March 31, 2011. Terrex is completing
financing arrangements for the acquisition which may initially
consist of a combination of working capital and debt. Terrex Energy
Inc. is a Calgary-based junior oil company that specializes in the
application of proven Enhanced Oil Recovery (EOR) methods to
improve oil production from mature pools. Terrex targets
underexploited and undercapitalized light-to-medium oil reservoirs
in Western Canada. Terrex shares are listed on the TSX Venture
Exchange under the symbol 'TER' Neither the TSV Venture Exchange
nor its Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Reserve Information and
Barrels of Oil Equivalent Information relating to reserves of
petroleum and natural gas contained herein represent estimates,
which were prepared by the vendor's independent reserve evaluators
in accordance with National Instrument 51-101. Estimating
quantities of proved petroleum and natural gas reserves is a
subjective, complex process that is dependent on a number of
assumptions and variable factors. Estimates of proved plus probable
reserves are made assuming the development of the property, without
consideration as to the availability of funding necessary for that
development. Production volumes and reserve information are
commonly expressed on a barrel of oil equivalent ("Boe') basis
whereby natural gas volumes are converted at the ratio of six
thousand cubic feet of natural gas to one barrel of oil based on an
energy equivalency at the burner tip and does not represent a value
equivalency at the well head. Used in isolation, barrels of oil
equivalent may be misleading. Forward-Looking Statements This news
release contains certain forward-looking statements and
forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of Canadian
securities laws. All statements other than statements of historical
fact are forward-looking statements. In particular, this press
release contains forward-looking statements pertaining to
expectations of management regarding the proposed acquisition,
including; the closing date of the acquisition; financing
activities to be conducted by Terrex to finance the acquisition,
including the assumption of debt and the use of proceeds thereof;
the characteristics of the property, including the expectation that
the property will be a good candidate for Improved and Enhanced Oil
Recovery programs; the expected timing of the planning, evaluation
and development of the programs, and the success of such programs.
In addition, statements relating to "reserves" are deemed to be
forward-looking statements as they involve the implied assessment,
based on certain estimates and assumptions, that the reserves
described exist in the quantities predicted or estimated and can be
profitably produced in the future. Undue reliance should not
be placed on forward-looking statements, which are inherently
uncertain, are based on estimates and assumptions, and are subject
to known and unknown risks and uncertainties (both general and
specific) that contribute to the possibility that the future events
or circumstances contemplated by the forward-looking statements
will not occur. Assumptions include, among other things: future
capital expenditure levels; the ability to secure regulatory
approval, the ability to obtain financing on acceptable terms to
finance the acquisition; future oil and natural gas prices; future
oil and natural gas production levels; the success of IOR and EOR
programs; the ability to obtain equipment in a timely manner to
carry out development activities; the ability to market oil and
natural gas successfully; and the impact of increasing
competition. Although Terrex believes that the expectations
reflected in the forward looking statements contained in this press
release, and the assumptions on which such forward-looking
statements are made, are reasonable, there can be no assurance that
such expectations will prove to be correct. Readers are cautioned
not to place undue reliance on forward-looking statements included
in this document, as there can be no assurance that the plans,
intentions or expectations upon which the forward-looking
statements are based will occur. By their nature, forward-looking
statements involve numerous assumptions, known and unknown risks
and uncertainties that contribute to the possibility that the
predictions, forecasts, projections and other forward-looking
statements will not occur, which may cause Terrex's actual
performance and results in future periods to differ materially from
any estimates or projections of future performance or results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, among other things, the following:
that the acquisition may not close when planned or at all or on the
terms and conditions set forth herein; the failure of Terrex to
obtain the necessary regulatory approval required in order to
proceed with the acquisition; volatility in market prices for oil
and natural gas; failure to complete planned financing activities;
incorrect assessment of the value of the acquisition; failure to
realize the anticipated benefits of the acquisition; general
economic conditions in Canada; and the other factors. Readers
are cautioned that this list of risk factors should not be
construed as exhaustive. The forward-looking statements contained
in this news release are made as of the date hereof and Terrex does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, except as required by
applicable law. The forward-looking statements contained herein are
expressly qualified by this cautionary statement To view this news
release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/March2011/07/c8418.html
pFor additional information please contact Kim Davies, President
& CEO, or Norm Knecht, VP Finance & CFO, at (403) 264-4430,
or visit Terrex's website at a
href="http://www.terrexenergy.ca"terrexenergy.ca/a./p
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