Terrace Announces Results of the Latest STS Well
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 1, 2012) - Terrace Energy Corp. (TSX VENTURE:TZR) (the "Company") is pleased to announce early results from its latest horizontal well, the SP5 2-47H on its STS Project in Texas. The well was drilled to a measured depth of 13,440 feet, including a horizontal section of approximately 4,700 feet and was successfully fracture stimulated in 14 stages.
After less than 13% load recovery, the well continues to strengthen and is currently flowing at a rate of approximately 579 BOPD (barrels of oil per day) and 2.9 MMCFD (million cubic feet per day) of liquid rich gas or 1059 BOEPD(i) (barrels of oil equivalent per day). There can be no assurance that the flow rate will stabilize at current or higher levels over time.
This well is located on the same drilling pad as the SP5 1-47H, results of which were announced on October 24, 2012. Both wells continue to strengthen and exceed that of the Company's initial discovery well on the STS Project, the results of which were announced in February. The drilling pad for these two SP5 wells represents a step out of over five miles from the discovery well. As of October 30, the SP5 1-47H continues to improve and is flowing at rate of approximately 729 BOPD (barrels of oil a day) and 2.2 MMCFD (million cubic feet a day) of liquid rich gas or 1087 BOEPD(i) (barrels of oil equivalent per day). Both of these wells are tied into a new wet gas processing system located on the STS Project and is being processed through a high efficiency natural gas liquids extraction plant. The Company expects a significant increase in revenues based on these processing arrangements.
Terrace holds a 33.33% working interest and a 25.00% net revenue interest in each of these wells.
As previously reported, Terrace purchased an average 26.88% working interest and a 20.16% net revenue interest in approximately 14,400 gross acres (3,875 net acres) in the STS Project. The project acreage has the potential to support up to 60 offset drilling locations.
Dave Gibbs, the Company's President, commented: "These two wells clearly demonstrate the STS Project's productive capabilities. We continue to be pleased with the early results of these wells and once again, the latest well's initial flow rate significantly exceeds our pre-project models. The Company looks forward to a long term, sustainable development program for the field."
About Terrace Energy
Terrace Energy is an oil & gas development stage company that is focused on unconventional oil extraction in onshore areas of the United States. It currently has two principal properties situated in South Texas with targets in the "Olmos" and "Eagle Ford" formations.
ON BEHALF OF THE BOARD OF DIRECTORS
Eric Boehnke, Chief Executive Officer
(i) BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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Terrace Energy Corp.