VANCOUVER, Jan. 8, 2015 /CNW/ - Terrace Energy
Corp. (the "Company") (TSXV: TZR, OTCQX: TCRRF, FRANKFURT: 2TR) reports on Initial
Production results from its first multi-well pad drilling program
on its STS Olmos Development Project in McMullen and LaSalle Counties, Texas.
The Company and its partner recently completed three horizontal
wells with an average lateral length of approximately 5,500 feet in
the Olmos Sandstone Formation. The STS #3-6H and the STS #2-6H,
were each completed with 22 stages, and the STS #1-6H was completed
with 15 stages, of hydraulic fracture stimulation using a "zipper
frac" technique. The wells were connected to permanent production
equipment prior to flow back operations and production was
initiated on December 31, 2014 with
all production going directly to sales. The wells showed oil
within the first few hours of testing and have produced over 12,000
barrels of oil to date. The wells are currently producing at
moderate oil rates on tight chokes in order to allow the fractures
to heal carefully, optimize long term flow rates and manage
logistical issues resulting from inclement weather and poor road
conditions. Current production rates after seven days of testing
and only ~3% load recovered are as follows *:
- STS #1-6H 483 BOPD, 543 MCFD (600 BOEPD*)
- STS #2-6H 589 BOPD, 858 MCFD (732 BOEPD*)
- STS #3-6H 643 BOPD, 765 MCFD (770 BOEPD*)
The Company will continue to monitor the flowback operations
over the next few weeks and make further determinations on optimum
choke sizes going forward as load recovery continues and gas-oil
ratios stabilize. The Company intends to follow up this report with
30 day IP rates when appropriate.
Progress also continues, as planned, on the overall development
of the project. As previously reported, all three wells on the
second multi-well pad, the STE Section 5 pad in LaSalle County have
been successfully drilled and cased in the Olmos Formation with
lateral lengths averaging 5,400 feet. These wells are scheduled to
be completed using the same zipper frac technique used on the
initial Section 6 pad. Completion equipment has been contracted and
is expected in the field in late January. Drilling operations are
currently underway on the third pad, the STS section 605 pad, in
McMullen County. Surface pipe has
been set on all three wells situated on this pad to a depth of
approximately 5,160 feet. The rig is currently drilling ahead on
the STS#3-605H.
The Company plans to maintain a single rig program for 2015 and
continue to drill three-well pads in order to optimize the cycle
from first capital to first production.The Company's capital
commitments for all activities required on the STS Olmos
Development Project are fully funded under its previously announced
$75 million development drilling
facility. The Company, through its wholly owned subsidiary Terrace
STS, LLC, holds a 27% working interest in the Project.
George Morris, the Company's Sr.
Vice President and COO, stated "We are pleased with the early
results of these wells and the efficiency of the zipper fracs. Even
with conservative choke management, these well results compare very
favorably with the previous 11 wells drilled on the project and are
consistent with our model projections. The STS Project is the
cornerstone of growth for the Company and we continue to stay
focused on keeping this project progressing as planned."
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.
ON BEHALF OF THE BOARD OF DIRECTORS
"Dave Gibbs"
Dave Gibbs, CEO
* 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.
**The results observed are not necessarily indicative of
long-term production performance or the ultimate recovery from
these wells
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
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 Information
This press release includes forward-looking information and
forward-looking statements (together, "forward-looking
information") within the meaning of applicable Canadian and
United States securities laws.
Forward-looking information includes, but is not limited to:
information regarding plans for the development of the Company's
projects and the timing thereof, including the potential number of
drilling locations on the STS Olmos Development Project and
expectations regarding achieving key successes and milestones over
the next several months. Users of forward-looking information are
cautioned that actual results may vary materially from the
forward-looking information disclosed in this press release. The
material risk factors that could cause actual results to differ
materially from the forward-looking information contained in this
press release include changes to the Company's ability to access
infrastructure in the vicinity of its projects at a reasonable
price; changing costs for and availability of required goods
and services; regulatory changes; risks relating to disagreements
or disputes with joint venture partners, including any failure of a
joint venture partner to fund its obligations; volatility in market
prices for oil and natural gas; and all of the other risks and
uncertainties normally associated with the exploration for and
development and production of oil and gas, including geologic
uncertainties, unforeseen drilling hazards, geological, technical,
drilling and processing problems, accidents and adverse weather
conditions. The forward-looking information contained in this press
release represents management's best judgment of future events
based on information currently available. The material assumptions
used to develop the forward-looking information include: that the
Company will be able to access infrastructure in the vicinity of
its projects on reasonable terms; that the Company will be able to
access the goods and services necessary in order to conduct further
exploration, development and production at its projects on
reasonable terms; that regulatory requirements will not change in
any material respect; and that other aspects of the Company's
operations will not be affected by unforeseen
events. Statements regarding future drilling locations are
based on geologic interpretations which are subject to revision as
further data is developed. The Company does not assume the
obligation to update any forward-looking information, except as
required by applicable law.
SOURCE Terrace Energy Corp.