Terrex Energy Inc. - Announces Closing of Hydrocarbon Purchase Agreement

CALGARY, March 28 /CNW/ -- 
CALGARY, March 28 /CNW/ - Terrex Energy Inc. ("Terrex" or the "Company") (TSX-V: TER) announces  the closing of the
 Hydrocarbon Purchase Agreement with Sandstorm Metals & Energy Ltd.
 ("Sandstorm") previously announced on March 21, 2011. Proceeds from the
 transaction will be used, in part, to finance the $13 million
 acquisition of the Two Creek property announced on March 7, 2011 and
 scheduled to close on March 31, 2011.


The Company's initial evaluation of the Two Creek property indicates
 that the property is a good candidate for optimization and Enhanced Oil
 Recovery (EOR) programs. These programs have the potential to
 significantly increase production and recoverable reserves from the
 property. Pool optimization, including the likelihood of drilling at
 least one well, is expected to commence in the second half of 2011
 together with planning of an EOR program for the Two Creek property. At
 Strathmore, the Company's first EOR project, chemical injection is
 scheduled to commence in the fall of 2011.


Under the Hydrocarbon Purchase Agreement, Sandstorm has acquired 15% of
 all hydrocarbons produced from the Company's Strathmore property; and
 25% of hydrocarbons produced from the Two Creek Jurassic A pool and,
 for five years, 25%  of all hydrocarbons produced from the Two Creek
 Jurassic B pool. The Two Creek Jurassic A and B pools comprise the Two
 Creek property to be purchased by the Company. As consideration for the
 forward production purchased under the agreement, Terrex received an
 upfront deposit of $14.7 million and will receive ongoing per unit
 payments of $15.00/bbl of crude oil, $1.00/mcf of natural gas, and
 $8.00/bbl of natural gas liquids delivered to Sandstorm. The agreement
 stipulates that Sandstorm is responsible for royalties associated with
 the purchased production, and that Terrex will implement chemical flood
 programs within 24 months and 36 months of the effective date, at
 Strathmore and Two Creek respectively.


Terrex Energy Inc. is a Calgary-based junior oil company that
 specializes in the application of proven Enhanced Oil Recovery (EOR)
 methods to improve oil production from mature pools. Terrex targets
 underexploited and undercapitalized light-to-medium oil reservoirs in
 Western Canada. Terrex shares are listed on the TSX Venture Exchange
 under the symbol 'TER'


Neither the TSV Venture Exchange nor its Regulation Service Provider (as
 that term is defined in the policies of the TSX Venture Exchange)
 accepts responsibility for the adequacy or accuracy of this release.


Forward-Looking Statements


This news release contains certain forward-looking statements and
 forward-looking information (collectively referred to herein as
 "forward-looking statements") within the meaning of Canadian securities
 laws. All statements other than statements of historical fact are
 forward-looking statements. In particular, this press release contains
 forward-looking statements pertaining to expectations of management
 regarding; the use of the upfront deposit, the closing date of the Two
 Creek property acquisition; the characteristics of the Two Creek
 property and; the expected timing of the planning, evaluation and
 development of the EOR programs, and the success of such programs.


Undue reliance should not be placed on forward-looking statements, which
 are inherently uncertain, are based on estimates and assumptions, and
 are subject to known and unknown risks and uncertainties (both general
 and specific) that contribute to the possibility that the future events
 or circumstances contemplated by the forward-looking statements will
 not occur. Assumptions are based in part on the terms of the hydrocarbon purchase
 agreement and include, among other things future oil and natural gas
 prices; future oil and natural gas production levels; the success of
 EOR programs; the ability to obtain equipment in a timely manner to
 carry out development activities; the ability to market oil and natural
 gas successfully; and the impact of increasing competition.  


Although Terrex believes that the expectations reflected in the forward
 looking statements contained in this press release, and the assumptions
 on which such forward-looking statements are made, are reasonable,
 there can be no assurance that such expectations will prove to be
 correct. Readers are cautioned not to place undue reliance on
 forward-looking statements included in this document, as there can be
 no assurance that the plans, intentions or expectations upon which the
 forward-looking statements are based will occur. By their nature,
 forward-looking statements involve numerous assumptions, known and
 unknown risks and uncertainties that contribute to the possibility that
 the predictions, forecasts, projections and other forward-looking
 statements will not occur, which may cause Terrex's actual performance
 and results in future periods to differ materially from any estimates
 or projections of future performance or results expressed or implied by
 such forward-looking statements. These risks and uncertainties include,
 among other things, the following: the failure of Terrex to obtain the
 necessary regulatory approval required in order to proceed with the
 acquisition of the Two Creek property; volatility in market prices for
 oil and natural gas; failure to complete planned financing activities;
 incorrect assessment of the value of the acquisition; failure to
 realize the anticipated benefits of the acquisition; general economic
 conditions in Canada; and the other factors.  Readers are cautioned
 that this list of risk factors should not be construed as exhaustive.


The forward-looking statements contained in this news release are made
 as of the date hereof and Terrex does not undertake any obligation to
 update publicly or to revise any of the included forward-looking
 statements, except as required by applicable law. The forward-looking
 statements contained herein are expressly qualified by this cautionary
 statement.


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p Kim Davies, President & CEO, or Norm Knecht, VP Finance & CFO, at (403)  264-4430, or visit Terrex's website at a href="http://terrexenergy.ca"terrexenergy.ca/a. /p 

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