CALGARY, ALBERTA--(Marketwired - May 14, 2013) - Terra Energy Corp. ("Terra" or the "Company") (TT.TO) announces its financial and operating results for the three month period ended March 31, 2013. Copies of Terra's first quarter results may be obtained at www.sedar.com or www.terraenergy.ca.
First Quarter 2013 Results
- The Company generated Net income of $873,000 or $0.01/share on a basic and diluted basis, from revenues of $11,472,000, as a result of recovering natural gas pricing, lower operating costs and gains from asset sales, compared to a loss of $5,083,000 or $0.05/share during the same period last year.
- Production averaged 4,469 boe/d and consisted of 81% natural gas, resulting in cashflow from operations of $1,078,000 as compared to a negative cashflow from operations of $1,043,000 in the prior year period.
- The Company's efforts to reduce expenditures coupled with the recovery of certain prior year operating expenses resulted in a 49% decrease in production expenses to $4,972,000 or $12.36/boe. As a result, operating netbacks have increased 273% to $4,355,000 or $10.83/boe, as compared to the first quarter of 2012.
- The Company reduced its credit facility from $100,000,000 to $49,900,000, when compared to the same period last year, of which at March 31, 2013, $46,317,905 was drawn.
During the first quarter, natural gas prices trended upwards which combined with the reduction in production expenses and gains from asset sales, resulted in a stronger working capital position and positive net income. The Company remains focused on the completion of the sale of the remaining Montney assets for $36 million less standard industry adjustments and commissions, to be exercised on or before June 3, 2013, with the resulting sale closing on or before July 9, 2013. After completion of the sale of the remaining Montney assets, the Company will be left with a considerably improved balance sheet, a large base of producing assets, substantial undeveloped land holdings and a significant inventory of new projects.
It continues to be the intention of the Company to release guidance on the capital projects for the remainder of calendar 2013, target exit production rates and cash flows, only following the completion of the sale of the remaining Montney assets.
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 statements regarding the exercise of the remaining Montney sale option. There is no assurance that the remaining Montney sale option will be exercised or the timing of exercise. 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.
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Vice President of Finance & Chief Financial Officer
Terra Energy Corp.
Manager, Corporate Affairs