VANCOUVER, Jan. 27, 2016 /CNW/ - Terrace Energy Corp. (the "Company") (TSXV: TZR, OTCQX: TCRRF, Germany: 2TR) announced today that it will not be making the January 31, 2016 interest payment on its 8% convertible unsecured notes (the "Notes") due 2018.
Pursuant to the terms of the Indenture, interest payments are payable on a quarterly basis, on the last day of January, April, July and October in each fiscal year of the Company. An event of default will occur if the Company fails to make an interest payment within the 15 day cure period provided for in the Indenture, in respect of two consecutive interest payment dates. As such, the Company will not be in default for failing to make the January 31, 2016 payment.
The interest deferral will result in approximately $800,000 net cash savings for the quarter.
Given current market conditions in the oil and gas industry and projected outlook and the Company's liquidity and other requirements, the Company is reviewing strategic alternatives to preserve liquidity and its ongoing business and may seek to restructure the terms of the Notes.
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 with a particular focus on South Texas.
ON BEHALF OF THE BOARD OF DIRECTORS
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.
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 statements regarding the effect of the deferral of the interest payments and the liquidity of the Company following the deferred payments. Users of forward-looking information are cautioned that actual results may vary 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 are described under the heading "Risk Factors" and elsewhere in the Company's most recent Annual Information Form and other documents filed with Canadian securities regulators at www.sedar.com.
The Company does not assume the obligation to update any forward-looking information, except as required by applicable law.
SOURCE Terrace Energy Corp.
For further information: [email protected], www.terraceenergy.net; Canadian Address, PO Box 21546, 1424 Commercial Drive, Vancouver B.C. V5L 5G2, Ph: 604 282-7897, Fax: 604 687 0885; US Address, Suite 407-202 Travis Street, Houston Texas 77002, Ph: 713 227 0010