|By Marketwired .||
|August 14, 2013 06:00 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 08/14/13 -- Terra Energy Corp. ("Terra" or the "Company") (TSX:TT) announces its financial and operating results for the three and six month periods ended June 30, 2013. Copies of Terra's second quarter results may be obtained at www.sedar.com or www.terraenergy.ca.
Second Quarter 2013 Results
-- Revenues increased by 3% to $10,877,000 as compared to the same period last year primarily driven by the increase in the price of natural gas, resulting in a net loss of $1,943,000 as compared to a net loss of $2,129,000 in the same period last year. -- Production during the second quarter decreased to 3,741 boe/d as a result of unplanned maintenance and facility interruptions at Tower and Wilder. Production in these two fields has since been restored to pre interruption levels. -- The Company generated positive cashflow from operations of $100,000 compared to negative cashflow of $4,121,000 in the prior year period. -- Production expenses decreased by 46% to $5,760,000 compared to $10,647,000 for the same period last year, mainly due to a targeted expense reduction program and lower production volumes.
Subsequent to the second quarter, Terra successfully closed on the third stage of its northeast British Columbia Montney asset sale package. Total gross proceeds of approximately $78 million from all three stages of the northeast British Columbia Montney sale were applied towards the Company's indebtedness and have resulted in the reduction in the Company's bank indebtedness from approximately $100 million to approximately $15 million and the reduction of the Company's total net indebtedness to approximately $20 million since March 2012. This strengthening in the balance sheet was achieved without the sale of virtually any producing assets, which leaves the Company with a solid production base and over 350,000 net acres of undeveloped land.
The Company's short term priority will be to refinance its remaining indebtedness and to provide working capital flexibility. The Company will consider various alternatives in order to ensure that its capital structure going forward remains healthy, including paying down debt through continued asset sales. Effective July 31, 2013, the Company and its syndicate of senior lenders agreed to amend the existing lending facility and extend it through to August 31, 2013 in order to facilitate the Company's refinancing efforts, including the provision for a further extension to September 30, 2013.
Operationally, the focus for the remainder of the year will be to continue with the optimization of existing production and improvement of operating efficiencies; in addition, the Company will look at three tie-in projects which involve the tie-in of production from existing wells which have already been completed and production tested. Additional capital projects focusing on low risk opportunities having a high liquids component and a short payback period, are awaiting the completion of the Company's refinancing.
Terra is a junior oil and gas corporation engaged in the exploration for, and development and production of, natural gas and oil in Western Canada. Terra's common shares trade on the Toronto Stock Exchange under the symbol 'TT'.
All amounts in Canadian dollars unless otherwise specified.
A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such disclosure of boe's may be misleading, particularly if used in isolation. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1; utilizing a conversion of a 6:1 basis may be misleading as an indication of value.
This media release may contain certain statements which constitute forward-looking statements or information ("forward-looking statements"), including The Company's short term priority to refinance its remaining indebtedness and to provide working capital flexibility, the consideration of various alternatives in order to ensure that the capital structure going forward remains healthy, including paying down debt through continued asset sales, the focus for the remainder of the year to continue to be the optimization of existing production and improvement of operating efficiencies, the Company will look at three tie-in projects which involve the tie-in of production from existing wells which have already been completed and production tested, and focusing on additional low risk, high liquids, short payback period capital projects after the completion of refinancing discussions. Although Terra believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate. Those expectations, factors and assumptions are based upon currently available information available to the Company. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Terra does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
Terra Energy Corp.
Vice President of Finance, & Chief Financial Officer
Terra Energy Corp.
Manager, Corporate Affairs