Terrex Energy Inc. - Announces Closing of Two Creek Acquisition.
March 31 2011 - 4:23PM
PR Newswire (Canada)
CALGARY, March 31 /CNW/ -- CALGARY, March 31 /CNW/ - Terrex Energy
Inc. ("Terrex" or the "Company") (TSXV: TER) announces the closing
of the previously announced $13 million acquisition of
producing oil and natural gas properties in the Two Creek area of
central Alberta. The acquisition is effective January 1, 2011. The
properties consist of a 100% working interest in 4,320 acres of
land, including related production infrastructure, in west central
Alberta. Management's initial evaluation of the properties
indicates that they are good candidates for optimization and
Enhanced Oil Recovery ("EOR") programs. These programs have the
potential to significantly increase production and recoverable
reserves from the properties. Pool optimization, including the
likelihood of drilling at least one well, will commence in the
second half of 2011, together with planning of an EOR program for
the Two Creek property. Two Creek average production for the month
of December 2010 was approximately 260 Boe/d, comprised of 210 Bbls
of crude oil and natural gas liquids, and 300 Mcf/d of natural gas.
On a pro forma basis, including the Two Creek properties, Terrex's
average production for December 2010 was approximately 362 Boe/d,
comprised of 270 Bbls of crude oil and natural gas liquids, oil 550
Mcf/d of natural gas. GLJ Petroleum Consultants Ltd. ("GLJ") has
completed an independent reserves assessment and evaluation the Two
Creek properties, in accordance with National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities, ("NI 51-101")
having an effective date as at December 31, 2010. GLJ is in
the process of completing the reserve assessment and evaluation of
the Company's oil and gas properties having an effective date as at
December 31, 2010, being the Strathmore property. The following
tables provide a summary of the GLJ Two Creek reserve assessment
and, on a pro forma basis, the preliminary Terrex Strathmore
reserve assessment giving effect to the Two Creek acquisition as at
December 31, 2010. TWO CREEK RESERVES, DECEMBER 31, 2010 Natural
Gas Oil NGLs Total Reserves (Mbbl) (MMcf) (Mbbl) (MBoe) Proved
Producing ............................ 397 371 5 464 Proved Plus
Probable Producing...... 506 462 7 589 TERREX PRO FORMA RESERVES,
DECEMBER 31, 2010 (preliminary Terrex, Strathmore plus Two Creek)
Oil Natural gas NGLs Total Reserves (Mbbl) (Mmcf) (Mbbl) (Mboe)
Proved Producing ........................... 475 637 5 587 Proved
& Probable.......................... 874 835 7 1,019 Proved,
Probable & Possible( (1)) ...... 2,032 1,955 7 2,363 Note: (1)
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.
Possible reserves, as stated above, relate to the Strathmore EOR
program, scheduled to commence later 2011. Final reserve
information for Terrex and the Two Creek properties, effective as
at December 31, 2010, will be disclosed in the Statement of
Reserves of Terrex in accordance with NI 51-101, which will be
filed on SEDAR concurrent with the release and filing of the
Company's annual financial statements for the year ended
December 31, 2010. 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 acquisition, including; the characteristics of
the two Creek properties, including the expectation that the
properties will be good candidates 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; future oil and natural gas prices; future oil and natural
gas production levels; the success of optimization 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; incorrect assessment of the
value of the acquisition; failure to realize the anticipated
benefits of the acquisition; risks associated with oil and gas
development and production including: substantial capital
requirements and financing, third party risk, government
regulation, environmental, Prices, markets and marketing,
dependence on key personnel, availability of equipment, access,
risks may not be insurable, variations in exchange rates,
expiration of licenses and leases, seasonality, competition,
conflicts of interest, title to properties; general economic
conditions in Canada; and 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.
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p Kim Davies, President & CEO, or Norm Knecht, VP Finance &
CFO, at (403) 264-4430, or visit Terrex's website at a
href="http://terrexenergy.ca" font-weight="bold"terrexenergy.ca/a.
/p
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