Terra Energy Corp. (Terra or the Company) announces that its board of directors has authorized the sale of the Company's Montney Assets in northeast British Columbia for a total consideration of $78.0 million to an industry peer.
The transaction is to occur in two parts; the first part consisting of the immediate sale of 57 net sections of Montney rights located primarily in the Monias area of northeast British Columbia for a total cash consideration of $22.0 million and is scheduled to close on December 14, 2012. The second part of the transaction consists of an option for the purchaser to acquire, exercisable by March 15, 2013, the remaining approximately 140 net sections of mineral rights in northeast British Columbia for an additional consideration of $56.0 million.
The proceeds from the sale of Terra's Monias assets will have an immediate impact in strengthening the company's balance sheet and reducing total indebtedness. Additionally, Terra's current production base will be kept intact as production from these assets is approximately 50 boe/d.