VANCOUVER, March 5, 2015 /CNW/ - Terrace Energy Corp. (the "Company") (TSXV: TZR, OTCQX: TCRRF, FRANKFURT: 2TR) reports continuing positive results and progress on its STS Olmos Development Project in McMullen and LaSalle Counties, Texas.
The Company and its partner recently completed the second set of three horizontal wells with an average lateral length of approximately 5,500 feet in the Olmos Sandstone Formation and were each completed with 19 - 22 stages of hydraulic fracture stimulation using a "zipper frac" technique. The wells were connected to permanent production equipment prior to flow back operations and production was initiated on February 24, 2015 with all production going directly to sales. The wells showed oil within the first few hours of testing and have produced over 16,000 barrels of oil to date. Current production rates after six days of testing and only ~3% load recovered are now reported at a combined total of 2,821 BOEPD as follows *:
- STE #1-5H 765 BOPD, 1575 MCFD (1028 BOEPD*)
- STE #2-5H 631 BOPD, 1069 MCFD (809 BOEPD*)
- STE #3-5H 775 BOPD, 1255 MCFD (984 BOEPD*)
The Company will continue to monitor the flowback operations over the next few weeks and make further determinations on optimum choke sizes going forward as load recovery continues and gas-oil ratios stabilize. The Company intends to follow up this report with 30 day IP rates when appropriate.
The Company previously reported initial flow back testing reports on the first three-well pad, the STS #1-6H, #2-6H and #3-6H pad at a combined initial rate of 2,102 BOEPD. Stabilized 30 Day Average IP rates are now reported at a combined total of 2,326 BOEPD as follows:
- STS #1-6H 483 BOPD, 737 MCFD (606 BOEPD*)
- STS #2-6H 632 BOPD, 1666 MCFD (910 BOEPD*)
- STS #3-6H 615 BOPD, 1169 MCFD (810 BOEPD*)
These wells have now been on production for approximately 60 days have produced a total of approximately 110,000 BOE.
Dave Gibbs, the Company's President and CEO, stated "The STS Project continues to produce repeatable performance results that meet or exceed our model expectations. We continue to be pleased with the results of our new wells and the consistent performance across the field."
Progress continues as planned on the overall development of the project. All three wells on the third multi-well pad, the STS Section 605 pad in McMullen County have been successfully drilled and cased in the Olmos Formation with lateral lengths averaging 5,400 feet. These wells are scheduled to be completed using the zipper frac technique with a tentative frac date scheduled for late March, 2015. Drilling operations are currently underway on the fourth pad, the second STS section 6 pad, in McMullen County. Surface pipe has been set on all three wells situated on this pad to a depth of approximately 5,150 feet. The rig is currently drilling ahead on the STS#6-6H.
The Company and its partner will continue to assess the impact of the current economic condition of the energy industry, balancing short-term service costs versus short-term commodity prices. Further development activity will be announced as appropriate. The Company, through its wholly owned subsidiary Terrace STS, LLC, holds a 15% interest in these new wells on the STE pad and approximately 27% working interest in the overall Project.
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, CEO
* BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
**The results observed are not necessarily indicative of long-term production performance or the ultimate recovery from these wells
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, 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.
For further information: [email protected], www.terraceenergy.net; Canadian Address: Suite 1012-1030 W Georgia St., Vancouver B.C. V6E 2Y3, Ph: 604 282-7897, Fax: 604 629-0418; US Address: Suite 400-202 Travis Street, Houston Texas 77002, Ph: 713 227-0010