Terrex Energy Inc. Reports Third Quarter 2011 Results

    




 CALGARY, Nov. 29, 2011 /CNW/ - Terrex Energy Inc. ("Terrex" or the  "Company")  announces its financial and operating results  for the three and nine months ended September 30, 2011. 

 The Company has filed its unaudited interim financial statements and  related management's discussion and analysis ("MD&A") for the three and  nine month periods ended September 30, 2011 on SEDAR at www.sedar.com and on the Company's website at www.terrexenergy.ca. Certain selected financial and operational information for the period  is set out below and should be read in conjunction with the Company's  interim financial statements and related MD&A for the period ended  September 30, 2011. 

 OPERATIONS AND OUTLOOK 

 Terrex currently owns two oil properties with, on a combined basis, over  40 million barrels of original oil in place ("OOIP"). Technical  analyses of these properties have identified their potential for  improved oil recovery ("IOR") and enhanced oil recovery ("EOR")  programs which could add considerable reserves and production. 

 The Strathmore property contained approximately 20 million barrels OOIP  with 4.8 million bbls recovered to date.  When acquired by Terrex in  2010, the pool was producing about 40 bbls/d of oil and 200 mcf/d of  gas, for a total of 70 boe/d. Geological and geophysical mapping,  including 3D seismic, combined with reservoir simulations indicate that  this pool is a strong candidate for a chemically enhanced water flood  program. Analogous pools, where similar programs have been implemented,  have recovered an additional 7% to15% of original oil in place.   Similar results from an EOR program at Strathmore could result in the  recovery of 1.5 to 3 million barrels of additional oil. 

 At Strathmore, Terrex has recently completed a number of field  operations in preparation for a planned EOR program. These activities  have doubled the production from the pool to approximately 140 boe/d.  The majority of future production gains, however, are expected to come  from the planned EOR program and during the third quarter, activities  continued to focus on the development of the chemical  alkaline-surfactant-polymer ("ASP") flood for the property. Final fluid  and core flood analyses and reservoir simulations are nearing  completion, and the overall EOR field plan has been finalized.  Construction of the Strathmore ASP facilities is complete with delivery  from Wyoming is waiting on completion of site preparations. Once the  facilities are on site, commissioning will commence and chemical  injection and restart of the water flood is expected to begin in early  2012. 

 As planning of the EOR program has progressed, the Company has  identified operational efficiencies and the potential for an earlier  production response time. In order to capitalize on these efficiencies,  the Company plans to accelerate capital expenditures relating to the  overall project.   The Company is currently considering various  financing options in order to fund this accelerated capital program. 

 At Two Creek, Terrex has commenced the planning of a second IOR/EOR  project on the Company's Jurassic A and B pools. Approval of an  application for an EOR program on the A pool has been received from the  Energy Resources Conversation Board and the Company is working on the  design of an optimal EOR program. Specialized technical EOR analysis  work has commenced and laboratory analyses, reservoir simulations and  cost estimates are underway. The A Pool also appears to have good IOR  optimization potential and the Company plans to drill two horizontal  in-fill wells and re-align the water flood in 2012 prior to the  implementation of an EOR program. Additionally, at Two Creek, Terrex  has  commenced reservoir assessments of the B pool. 

 The Company has also identified and is actively pursuing other  properties for IOR and EOR potential consistent with the criteria  developed by the company. 

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

  





    OPERATIONAL AND FINANCIAL                                              
    SUMMARY

                                                                           

    Three month periods ended September 30                             2010
                                                           2011

    Average production, boe/d                                          72.0
                                                          332.3

    Capital expenditures, including acquisitions          $        $       
                                                      1,409,845     541,320

    Revenue, net of royalties                             $        $       
                                                      1,551,459     297,045

    Funds flow from operations (1)                      $(          $(     
                                                       159,271)    449,054)

      Per share, basic and diluted                  $(          $(         
                                                         0.002)      0.006)

    Operating (loss) (1)                                $(          $(     
                                                       477,481)    468,141)

      Per share, basic and diluted                  $(          $(         
                                                         0.005)      0.006)

    Net (loss)                                          $(          $(     
                                                       779,526)    960,746)

      Per share, basic and diluted                  $(          $(         
                                                         0.009)      0.012)

                                                                           

      (1)Funds flow from operations and operating loss are non-IFRS
      measures as
      outlined in this document

                                                                           

                                                                           

    Nine and Eight month Periods ended                         
    September 30                                           2011        2010

    Average production, boe/d                                          73.7
                                                          342.6

    Capital expenditures, including acquisitions $   18,429,192       $    
                                                                  1,539,053

    Revenue, net of royalties                             $        $       
                                                      4,891,569     870,533

    Funds flow from operations (1)                      $(          $(     
                                                       570,847)    950,899)

      Per share, basic and diluted                  $(          $(         
                                                         0.007)      0.020)

    Operating (loss) (1)                                   $(          $(  
                                                     1,488,345)  1,004,735)

      Per share, basic and diluted                  $(          $(         
                                                         0.018)      0.021)

    Net (loss)                                             $(          $(  
                                                     1,824,981)  2,452,794)

      Per share, basic and diluted                  $(          $(         
                                                         0.022)      0.052)

                                                                           

      (1)Funds flow from operations and operating loss are non-IFRS
      measuresas
      outlined in this document

                                                                           






 Comparative figures for 2010 are for the three and eight month periods  ended September 30, 2010 and have been restated to reflect  International Financial Reporting Standards ("IFRS") adopted in 2011. 

 Production and revenue for the three and nine month periods ended  September 30, 2011 increased significantly over the comparable periods  in 2010, primarily as a result of the acquisition of the Two Creek  property, as of January 1, 2011. Production averaged 332 boe/d during  the third quarter of 2011, an increase of 260 boe/d over the third  quarter of 2010. Production for the nine month period ended September  30, 2011 averaged 343 boe/d, an increase of 269 boe/d over 2010. This  increase in production together with increased commodity prices is  reflected in the year over year increase in revenue. Realized 2011  commodity prices, on a boe basis, increased approximately 24% over  2010. 

 As expected, the Company has continued to incur losses in advance of the  implementation of optimization and EOR projects. Net losses for the  three and nine month periods ended September 30, 2011 were $779,526 and  $1,824,981 respectively as compared to $960,746 and $2,452,794 for the  comparable periods in 2010. 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 

 Barrels of Oil Equivalent 

 Production volumes and reserve information are commonly expressed on a  barrel of oil equivalent ("Boe") basis whereby natural gas volumes are  converted at the ratio of six thousand cubic feet of natural gas to one  barrel of oil 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. 

 Non-IFRS Information 

 Included in this news release are references to terms commonly used in  the oil and gas industry including funds flow from operations and  operating loss. Such terms do not have standard meaning as prescribed  under International Financial reporting Standards ("IFRS") and  therefore may not be comparable with the determination of similar  measures for other entities. As used in this news release, funds flow  from operations is calculated as cash flow from operating activities  less changes in non-cash working capital and, operating loss is  calculated as net loss before stock based compensation and accretion of  asset retirement obligations. Funds flow from operations is used by  management in assessing the Company's ability to fund capital programs  and operations and operating loss provides a comparison of operating  results between periods, excluding non-cash items subject to  significant volatility. The foregoing non-IFRS measures should not be  considered an alternative to, or more meaningful than cash provided by  operating activities and net loss determined in accordance with IFRS. 

 Forward-Looking Statements  

 Certain statements contained in this news release constitute  forward-looking statements and forward-looking information  (collectively referred to herein as "forward-looking statements")  within the meaning of applicable Canadian securities laws. Such  forward-looking statements relate to future events or future  performance and are based on Terrex's current internal expectations,  estimates, projections, assumptions and beliefs, including, among other  things, assumptions with respect to production, future capital  expenditures and cash flow. Readers are cautioned that the assumptions  used in the preparation of such information may prove incorrect. All  statements other than statements of historical fact may be  forward-looking statements. Such forward-looking statements are often,  but not always, identified by the use of words such as "seek",  "anticipate", "budget", "plan", "continue", "estimate", "expect",  "forecast", "may", "will", "project", "predict", "potential",  "targeting", "intend", "could", "might", "should", "believe" and  similar expressions. These statements involve known and unknown risks,  uncertainties and other factors that may cause actual results or events  to differ materially from those anticipated in such forward-looking  statements. Terrex believes the expectations reflected in those  forward-looking statements are reasonable but no assurance can be given  that these expectations will prove to be correct and such  forward-looking statements included in, or incorporated by reference  into, this news release should not be unduly relied upon. These forward  looking statements speak only as of the date of this news release. 

 In particular, this news release contains forward-looking statements  pertaining to the following: 




        --  business strategies
        --  exploration and development plans
        --  implementation, anticipated benefits and timing of enhanced oil
            recovery ("EOR") programs
        --  other expectations, beliefs, plans, goals, objectives,
            assumptions or statements about future events or performance




 Forward-looking statements are based on Terrex's current beliefs as well  as assumptions made by, and information currently available to, Terrex  concerning business prospects, strategies, regulatory developments, the  ability to obtain equipment in a timely manner to carry out development  activities, the ability to obtain financing on acceptable terms, the  benefits of IOR and EOR programs and the terms of the Hydrocarbon  Purchase Agreement. Although management considers these assumptions to  be reasonable based on information currently available to it, they may  prove to be incorrect. 

 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. There can be no assurance that the plans, intentions or  expectations upon which forward-looking statements are based will in  fact be realized. Actual results will differ, and the difference may be  material and adverse to Terrex and its shareholders. These factors  include, but are not limited to risks associated with oil and natural  gas exploration, financial risks, the history of losses, substantial  capital requirements, political and government risks, government  regulation, environmental, prices, dependence on key personnel,  availability of drilling equipment and access, 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. 

   

   

   

   

   

Terrex Energy Inc


CONTACT:  For additional information please contact Kim Davies, President &CEO,or Norman Knecht, VP Finance and CFO, at [phone], or visit theCompany`s website at www.terrexenergy.ca 


    

Copyright