Terrex Energy Inc. provides update regarding Hydrocarbon Purchase Agreement
October 01 2012 - 5:00AM
PR Newswire (Canada)
CALGARY, Oct. 1, 2012 /CNW/ - Terrex Energy Inc. ("Terrex" or the
"Company") announces that it has received written notice from
Sandstorm Metals & Energy Ltd. ("Sandstorm") indicating that
Terrex is in default under the terms of the Hydrocarbon Purchase
Agreement dated as of March 18, 2011 (the "Purchase Agreement")
among Terrex, Sandstorm and an affiliate of Sandstorm (a copy of
which has been filed on SEDAR at www.sedar.com under the Company's
SEDAR profile), due to Terrex's failure to fulfil certain drilling
obligations by the date contemplated by the Purchase
Agreement. Pursuant to the Purchase Agreement, if Terrex does
not remedy the default to Sandstorm's reasonable satisfaction or
refund $1.5 million to Sandstorm within the applicable cure period,
Sandstorm will have the right to, among other things, realize on
its security interest in all of Terrex' assets. Terrex
continues to actively pursue various strategic alternatives
including potential financing, merger and and/or joint venture
arrangements in order to continue the development of its properties
and meet its obligations, including those contained in the Purchase
Agreement. Terrex recently entered into a non-binding letter of
intent with an arms' length public company providing for a
potential business combination, which if consummated in accordance
with its proposed terms, would allow Terrex to cure the default
under the Purchase Agreement. However there is no assurance
that the proposed business combination will be completed and the
letter of intent remains subject to a number of conditions,
including approval by the boards of directors of both parties,
approval by Sandstorm, the negotiation of a definitive agreement,
as well as TSX Venture Exchange and shareholder approval. ABOUT
TERREX Terrex Energy Inc. is a Calgary based junior oil company
that focuses on the application of proven enhanced oil recovery
("EOR") methods to improve oil production from existing mature
fields. Terrex targets underexploited and undercapitalized light to
medium oil reservoirs in Western Canada. The Company's shares are
listed on the TSX Venture Exchange under the trading symbol "TER".
ADVISORIES Forward-Looking Information This News Release contains
forward-looking information within the meaning of applicable
Canadian securities laws. All information other than historical
fact is forward-looking information. Forward-looking information
relates to future events or future performance and is based on
Terrex's current internal expectations, estimates, projections,
assumptions and beliefs. Forward-looking information is often, but
not always, identified by the use of words such as "expect",
"project", "proposed", "intend", "seek", "anticipate", "budget",
"plan", "continue", "estimate", "forecast", "may", "will",
"predict", "potential", "targeting", "could", "might", "should",
"believe" and similar expressions. Although management considers
the assumptions and estimates, reflected in forward-looking
information, to be reasonable, based on information currently
available, there can be no assurance that such information will
prove to be correct. As a consequence, actual results may differ
materially from those anticipated. In particular, this News Release
contains forward-looking information relating to the Purchase
Agreement and to possible transactions which may arise from the
Company's review of strategic alternatives. Undue reliance should
not be placed on forward-looking information which is inherently
uncertain, and 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 information will not occur. These risks include, but are
not limited to risks associated with the Purchase Agreement, risks
associated with completing a strategic transaction, financial
risks, and substantial capital requirements. Further information
regarding these risks may be found under the heading "Risk Factors"
in the company's Annual Information Form. Readers are cautioned
that the foregoing list of factors that may affect future results
is not 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. Neither the TSX
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. Terrex
Energy Inc CONTACT: For additional information please contact
Jonathan Lexier,President &CEO, or Norman Knecht, VP Finance
and CFO, at (403) 264-4430, or visitthe Company's website at
www.terrexenergy.ca
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