Terrex Energy Inc. Reports Q1/2012 Operational and Financial Results

    




 CALGARY, May 23, 2012 /CNW/ - Terrex Energy Inc. ("Terrex" or the  "Company")  is pleased to report its operational and  financial results for the three months ended March 31, 2012. 

 The Company has filed its unaudited condensed interim financial  statements and related management's discussion and analysis ("MD&A")  for the three months ended March 31, 2012 on SEDAR at www.sedar.com and  on the Company's website at www.terrexenergy.ca. Certain selected  financial information for the period, as set out below, should be read  in conjunction with the Company's unaudited condensed financial  statements and related MD&A for the period ended March 31, 2012. 

 OPERATIONS AND OUTLOOK 

 Field rehabilitation activities, in advance of the implementation of  planned EOR programs, were largely completed by year end and as a  result, operational activities during the first quarter of 2012 were  much reduced from prior periods. At Strathmore, efforts were focused on  finalizing the design and development of the planned ASP flood,  including the configuration of surface facilities. A substantial amount  of the required technical and planning work is complete and the EOR  project is in an advanced state of readiness for implementation. At Two  Creek, evaluation and planning for a Polymer flood of the Jurassic A  pool continued, including a realignment of the existing water flood.  The potential of a low pressure water flood of the Jurassic B pool at  Two Creek is being evaluated and an application is being prepared for  submission to the Energy Resources Conservation Board. 

 Subsequent to March 31, 2012, GLJ Petroleum Consultants Ltd. ("GLJ")  completed their independent assessment and evaluation of the Company's  reserves. As a result of the Company's technical work and detailed  development plans, GLJ recognized significant reserve additions at both  Strathmore and Two Creek. 

 The Company's EOR projects are now at a point where additional capital  is required to advance these projects and realize on their potential.  The Company is actively exploring various financing options to fund  these capital programs. To this end, a special committee (the "Special  Committee") of the board of directors has been formed and has engaged  Nova Bancorp Securities Ltd., on a non-exclusive basis, to assist the  Special Committee and management with the identification and evaluation  of various financing strategies for the Company. 

 On April 26, 2012, Mr. Jonathan Lexier, P.Eng. was appointed President  and CEO of the Company. Mr. Lexier has been charged with pursuing all  avenues to realize on the Company's unique and valuable combination of  assets and expertise. His appointment reflects the Board's commitment  to the ongoing development of the Company. 

 The Company has elected not to provide market guidance at this time for  2012. 

  





    OPERATIONAL AND FINANCIAL SUMMARY

                                                       

    THREE MONTH PERIODS ENDED MARCH 31

    $000s except as noted                                 2012         2011

    Average production, Boe/d                              336          353

    Capital expenditures, including acquisitions,   $      584   $   15,044

    Revenue, net of royalties,                      $    1,565   $    1,651

    Funds flow from operations (1)                  $    (347)   $    (420)

      Per share, basic and diluted                  $  (0.004)   $  (0.005)

    Operating (loss) (1)                            $    (634)   $    (725)

      Per share, basic and diluted                  $  (0.008)   $  (0.009)

    Net (loss)                                      $    (672)   $    (701)

    Per share, basic and diluted                    $  (0.008)   $  (0.009)

             (1) Funds flow from operations and operating loss are non-IFRS
                                                                  measures.

     






 Production for the three months ended March 31, 2012 decreased from the  comparable period in 2011 primarily as the result of down-hole  mechanical problems at a significant gas well at Two Creek. Well  repairs will be delayed until natural gas prices strengthen. Total  revenues for the quarter also decreased from those reported in 2011 as  a result of the reduced gas production and lower realized natural gas  and crude oil prices. 

 As expected, the Company has continued to incur losses in advance of the  implementation of optimization and EOR projects. As the Company's EOR  and optimization projects progress, production and revenue are  anticipated to increase significantly. 

 ABOUT TERREX 

 Terrex Energy Inc. is a Calgary based junior oil company that focuses on  the application of proven enhanced oil recovery ("EOR") methods to  improve oil production from existing mature fields. Terrex targets  underexploited and undercapitalized light to medium oil reservoirs in  Western Canada. The Company's shares are listed on the TSX Venture  Exchange under the trading symbol "TER". 

 Neither the TSX 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. 

 ADVISORIES 

 Basis of Presentation - Production and reserve information is commonly  expressed in units of a barrel of oil equivalent ("Boe"). For purposes  of computing such units, natural gas is converted to equivalent barrels  of crude oil using a conversion factor of six thousand cubic feet of  natural gas to one barrel of oil. This conversion ratio of 6:1 is based  on an energy equivalency at the burner tip and does not represent a  value equivalency at the well head. Used in isolation, barrels of oil  equivalent may be misleading. 

 Forward-looking Information - This News Release contains forward-looking  information within the meaning of applicable Canadian securities laws.  All information other than historical fact is forward-looking  information. Forward-looking information relates to future events or  future performance and is based on Terrex's current internal  expectations, estimates, projections, assumptions and beliefs.  Forward-looking information is often, but not always, identified by the  use of words such as "expect", "project", "proposed", "intend", "seek",  "anticipate", "budget", "plan", "continue", "estimate", "forecast",  "may", "will", "predict", "potential", "targeting", "could", "might",  "should", "believe" and similar expressions. 

 Although management considers the assumptions and estimates, reflected  in forward-looking information, to be reasonable, based on information  currently available, there can be no assurance that such information  will prove to be correct. As a consequence, actual results may differ  materially from those anticipated. 

 In particular, this News Release contains forward-looking information  relating to estimates and values of recoverable petroleum and natural  gas reserves. Information relating to reserves is forward-looking as it  involves the implied assessment, based on certain estimates and  assumptions, that the reserves exist in the quantities estimated and  that they will be commercially viable to produce in the future.  Estimates and assumptions upon which reserve information is based  include assumptions as to future commodity prices, currency exchange  rates, well production rates, well drainage areas, success rates for  future drilling, the timing, implementation and effectiveness of  tertiary production programs, and the availability of labour and  services. 

 Undue reliance should not be placed on forward-looking information which  is inherently uncertain, and 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 information will not occur. These risks include, but  are not limited to risks associated with oil and natural gas  exploration, development and production, financial risks, the history  of losses, substantial capital requirements, political and government  risks, government regulations, environmental, prices, dependence on key  personnel, availability and access to equipment, risks may not be  insurable, licenses, resource estimates, variations in exchange rates.  Further information regarding these factors may be found under the  heading "Risk Factors" in the company's Annual Information Form.  Readers are cautioned the foregoing list of factors that may affect  future results is not 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. 

 Non-IFRS Measures - This news release makes reference to terms commonly  used in the oil and gas industry including funds flow from operations  and operating loss. Such terms do not have a standard meaning as  prescribed by IFRS and therefore may not be comparable with the  determination of similar measures for other entities. These measures  are identified as non-IFRS measures and are used by management to  analyze operating performance and leverage. These measures should not  be construed as an alternative to, or more meaningful than measures  determined in accordance with IFRS. 

   

   

Terrex Energy Inc


CONTACT:  Jonathan Lexier, President & CEO, or Norman Knecht, VP Financeand CFO,at [phone], or visit the Company's websiteat www.terrexenergy.ca 


    

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