VANCOUVER, March 26, 2014 /CNW/ - Terrace Energy Corp. (the "Company" or "Terrace") (TSXV: TZR, OTCQX: TCRRF; Germany: 2TR) is pleased to announce it has reached an agreement to develop significant new acreage in Zavalla and Dimmit Counties on trend with recent, highly successful wells in the emerging Buda Limestone formation in South Texas.
On February 24, 2014, the Company announced it had entered into an agreement (the "Farm-in Agreement") to acquire a 75% working interest and a 56.25% net revenue interest in several leases, that cover approximately 10,000 gross (6,700 net) mineral acres, by drilling a series of wells. The Company has now reached an agreement to develop the remaining 3,300 net mineral acres on the same terms and conditions as the Farm-in Agreement. With this agreement, the Company now has the right to test and develop the Buda Limestone over approximately 10,000 net mineral acres.
The project acreage is located in the core of the Eagle Ford Trend in South Texas and in close proximity to a number of prolific horizontal wells drilled into the naturally fractured Buda Limestone, including the publicized Hughes Heitz 302 3H, which produced over 250,000 barrels of light sweet crude oil in its first 18 months of reported production, according to the Texas Railroad Commission. Utilizing leading edge underbalanced drilling techniques and recently available 3D seismic data, operators have reported achieving production results comparable to or exceeding Eagle Ford Shale wells in the area at significantly lower capital costs. Typical horizontal Buda wells in the area are being drilled and completed for capital costs in the range of $3.0 - $4.0 million as compared to Eagle Ford Shale wells, which typically cost in the range of $6.0 - $8.5 million.
Dave Gibbs, the Company's President and Chief Executive Officer commented: "We are pleased we were able to secure the remaining net acreage in this project on the same terms as the Farm-in Agreement previously disclosed. We are confident the Buda Limestone formation, which is also present on our 147,000 gross acre Maverick County Project, is highly prospective and will be a core focus for our Company along with the development of our STS Olmos Project and other significant Cretaceous pay intervals that are present on each of our acreage holdings. This acquisition gives us control over the project's development pace, which will be begin on or before August 1 of this year, and allows us to consider its development in partnership with strategic industry participants."
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, President and Chief Executive Officer
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" within the meaning of applicable Canadian securities laws, including information regarding the costs to develop and complete wells in the Buda Limestone formation and their expected performance. 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 include, changes to production rates , changes to the Company's ability to access infrastructure in the vicinity of the project at a reasonable price, costs for and availability of required goods and contract services, regulatory changes and all of the other risks and uncertainties normally associated with the exploration for and development and production of oil and gas. 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 future costs and performance of Buda Limestone wells will approximate historical costs and past performance, that the Company will be able to access infrastructure in the vicinity of the project on reasonable terms, that the Company will be able to access the goods and contract services necessary in order to conduct further exploration, development and production 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. The Company does not assume the obligation to update any forward-looking information, except as required by applicable law.
SOURCE: Terrace Energy Corp.
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