The pool is currently producing approximately 80 barrels of oil equivalent per day and has produced nearly 5 million barrels of oil to date. The management of Terrex has assessed that this asset has the potential for significant undeveloped long term oil exploitation and is the first step in a larger acquisition and exploitation business plan. Terrex activities is expected to provide a diversification to the company’s existing operations.
The company plans to use Terrex to carry out its proposed spinoff transaction that was originally announced on November 26, 2009. The company has appointed Kim Davies and Harry Knutson as directors of Terrex and has appointed Norm Knecht chief financial officer.
The company has entered into a letter agreement with Terrex whereby the companies have agreed to work to complete the spinoff transaction, including the completion of additional financing for Terrex. The spinoff transaction will be effected by way of a statutory plan of arrangement pursuant to which all of the company’s shares in Terrex will be distributed to its shareholders.
The spinoff transaction is subject to approval by Terra’s shareholders and the TSXV. Terra expects to be able to complete the transaction before the end of March, subject to receipt of all required approvals.
