Anterra and Terrex Enter Into Business Combination, Agree to

Anterra and Terrex Enter Into Business Combination, Agree to
Settlement of Terrex Creditor Obligations and Anterra to Complete
Financing 
CALGARY, ALBERTA -- (Marketwire) -- 12/21/12 -- Anterra Energy Inc.
("Anterra" or the "Company") (TSX VENTURE:AE.A) and Terrex Energy
Inc. ("Terrex") are pleased to jointly announce that they have
entered into an agreement (the "Arrangement Agreement") whereby
Anterra will acquire 100% of the issued and outstanding common shares
in the capital of Terrex ("Terrex Shares"), in exchange for Class A
common shares in the capital of Anterra ("Anterra Shares"), by way of
a statutory plan of arrangement (the "Arrangement"). The transaction
is expected to close in the first quarter of 2013 provided all
required Terrex securityholder, court and regulatory approvals are
obtained. 
Under the terms of the Arrangement, holders of Terrex shares ("Terrex
Shareholders") will receive, in exchange for each Terrex Share held,
0.307 of an Anterra Share (the "Exchange Ratio"). The Exchange Ratio
was determined by arm's length negotiations among the parties. All
holders of Terrex warrants will receive replacement Anterra warrants
which will entitle the holder to acquire Anterra Shares equal to that
number of Terrex Shares which were otherwise issuable upon exercise
of the Terrex warrants previously held, multiplied by the Exchange
Ratio, with the exercise price adjusted accordingly.  
Anterra also announces it has signed a term sheet for a private
placement financing of $7 million comprised of 107,692,308 Anterra
Shares to be issued at a price of $0.065 to LandOcean Energy Services
Co., Ltd., a Beijing-based international oilfield services company
("LandOcean"), a party at arm's length to both Anterra and Terrex. As
a condition to the closing of the private placement, LandOcean shall
have the right to appoint two additional directors to the board of
directors of Anterra. Anterra has agreed to pay a finder's fee and
issue 1,000,000 broker's warrants, exercisable for Anterra Shares at
a price of $0.10 for a period of 2 years, in connection with the
private placement.  
Anterra's existing executive team, led by Dr. Gang Fang, will manage
the combined company (the "Combined Company"). At closing, the
Combined Company will have approximately 391,461,321 shares
outstanding with former Terrex shareholders and creditors owning
approximately 10% of the Combined Company. The Combined Company is
expected to benefit from operational efficiencies, a stronger balance
sheet and a larger portfolio of properties for future exploration and
development. 
The Combined Company's capital expenditures will continue to be
focused in the Cardium light oil resource play and the Breton Belly
River exploitation project in the Pembina area of central Alberta and
the Bakken light oil play in Abbott, Saskatchewan as well as Terrex's
properties in Two Creek and Strathmore, Alberta. The Combined
Company's lower risk "oily" development drilling inventory and the
high netback potential of these projects is expected to provide
predictable cash flow for further capital investment. In addition,
the Combined Company will look for opportunities to acquire stable,
low decline assets with attractive netbacks.  
In connection with the completion of the Arrangement, Terrex and
Anterra have entered into a settlement agreement (the "Settlement
Agreement") with Sandstorm Metals & Energy Ltd. and 0905896 BC Ltd.
(collectively, "Sandstorm"). Pursuant to the Settlement Agreement,
the obligations of Terrex (other than the delivery of purchased
production) under the hydrocarbon purchase agreement dated March 18,
2011 between Terrex and Sandstorm are suspended, as are the
enforcement proceedings initiated by Sandstorm on Terrex's default
under the agreement. Sandstorm has advanced $500,000 to Terrex on a
non-refundable basis for working capital until March 31, 2013. At the
closing of the Arrangement, the hydrocarbon purchase agreement will
be terminated in exchange for the following consideration to
Sandstorm: a payment of $3.5 million cash, to be funded by Anterra,
the delivery of certain equipment from Terrex having a value of $3
million, the issuance by Anterra of a $4 million principal amount, 5
year secured convertible debenture (bearing interest at 6% and
convertible at $0.09 per Anterra Share), the issuance of 20,801,303
Terrex Shares (which shall be exchanged for approximately 6.39
million Anterra Shares under the Arrangement), and the issuance of 3
million Anterra Shares. The terms of the Settlement Agreement remain
subject to the acceptance of the TSX Venture Exchange. 
The Arrangement Agreement also contemplates the issuance by Terrex of
an aggregate of 8.2 million Terrex Shares to current and former
officers and employees in settlement of severance obligations and
success fees that would otherwise be payable on completion of the
Arrangement.  
The Terrex Board of Directors has unanimously determined that the
Arrangement is in the best interests of Terrex and that the
consideration being offered to Terrex Shareholders is fair to the
Terrex Shareholders. The Terrex Board has resolved to unanimously
recommend that Terrex Shareholders and Terrex warrantholders vote
their shares and warrants in favour of the Arrangement at the special
meeting (the "Terrex Meeting") of Terrex Shareholders and
warrantholders (voting together as a single class) to be held on or
about March 31, 2013.  
The directors and senior officers of Terrex have entered into support
agreements with Anterra to vote their Terrex Shares and Terrex
warrants in favour of the Arrangement at the Terrex Meeting. 
The Arrangement Agreement provides for, among other things, a
non-solicitation covenant on the part of Terrex that entitles Terrex
to consider and accept a superior proposal and a right in favour of
Anterra to match any superior proposal. If the Arrangement Agreement
is terminated in certain circumstances, including if Terrex enters
into an agreement with respect to a superior proposal or if the Board
of Directors of Terrex withdraws or modifies its recommendation with
respect to the proposed transaction, Anterra is entitled to a
termination payment in cash of $400,000. Additionally, Terrex is
entitled to a termination payment of $400,000 in certain
circumstances as described in the Arrangement Agreement. A complete
copy of the Arrangement Agreement will be available under each of
Anterra's and Terrex's issuer profiles on SEDAR at www.sedar.com. 
Completion of the transaction is subject to customary closing
conditions, including: court approval of the Arrangement; approval of
two-thirds of the votes cast by holders of Terrex Shares and Terrex
warrants (voting together as a single class) in person or by proxy at
the Terrex Meeting; approval of a majority of the votes cast by
disinterested holders of Terrex Shares and Terrex warrants in person
or by proxy at the Terrex Meeting, and applicable government and
regulatory approvals by, among others, the TSX Venture Exchange
("TSXV") and relevant Canadian governmental authorities. It is
expected that, upon successful completion of the Arrangement, the
Terrex Shares would be delisted from the TSXV. 
Full details of the transaction will be included in the information
circular to be mailed to Terrex Shareholders and warrantholders in
accordance with applicable securities laws. A copy of the information
circular and related documents will be filed under Terrex's issuer
profile on SEDAR at www.sedar.com. 
The Anterra Shares and the Terrex Shares are expected to resume
trading upon completion by the TSXV of its review of the terms of the
proposed financing by Anterra, including the addition of the proposed
new directors of Anterra. Anterra and Terrex will provide an update
regarding the dates that the Anterra Shares and Terrex Shares will
resume trading. 
About Anterra Energy Inc. 
Anterra Energy is an independent exploration, development and
production company with an emerging focus on the use of advanced
exploration technologies including 3-D imaging, horizontal drilling
and multi-stage completions to systematically develop its portfolio
of conventional and non-conventional oil and gas projects.
Complementing this strong exploitation and development focus, the
Company owns and operates fee-based midstream facilities in western
Canada. Anterra is a public Canadian company listed on the TSXV under
the symbol AE.A. More information about Anterra is available on the
Company's website at www.anterraenergy.com. 
About Terrex Energy Inc. 
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 TSXV under the
trading symbol "TER". 
Forward-Looking Information and Cautionary Statements 
This press release contains forward-looking information and
statements within the meaning of applicable securities laws and are
based on the expectations, estimates and projections of management of
Anterra and Terrex as of the date of this news release unless
otherwise stated. The use of any of the words "expect", "anticipate",
"continue", "estimate", "objective", "ongoing", "may", "will",
"project", "should", "believe", "plans", "intends" and similar
expressions are intended to identify forward-looking information or
statements. More particularly and without limitation, this press
release contains forward-looking information and statements
concerning: the anticipated benefits of the Arrangement to Anterra
and Terrex and their respective shareholders, including anticipated
synergies; the anticipated cash flow of the Company post-Arrangement,
the timing and anticipated receipt of required regulatory, court and
securityholder approvals for the transaction; the ability of Anterra
and Terrex to satisfy the other conditions to, and to complete, the
Arrangement; the anticipated timing of the mailing of the information
circular regarding the Arrangement, the proposed terms of the
financing by Anterra, the holding of the Terrex Meeting and the
closing of the Arrangement. 
In respect of the forward-looking information and statements
concerning the anticipated benefits and completion of the proposed
Arrangement and the anticipated timing for completion of the
Arrangement, Anterra and Terrex have provided such in reliance on
certain assumptions that it believes are reasonable at this time,
including assumptions as to the time required to prepare and mail
securityholder meeting materials, including the required information
circular; the ability of Anterra and Terrex to receive, in a timely
manner, the necessary government, regulatory, court, securityholder,
stock exchange and other third party approvals; the ability of
Anterra and Terrex to satisfy, in a timely manner, the other
conditions to the closing of the Arrangement; and expectations and
assumptions concerning, among other things: commodity prices and
interest; planned synergies, capital efficiencies and cost-savings;
anticipated cash flow of the Company following the Arrangement;
applicable tax laws; future production rates; the sufficiency of
budgeted capital expenditures in carrying out planned activities; and
the availability and cost of labour and services. The anticipated
dates provided may change for a number of reasons, including
unforeseen delays in preparing meeting materials, inability to secure
necessary securityholder, government, regulatory, court or other
third party approvals in the time assumed or the need for additional
time to satisfy the other conditions to the completion of the
Arrangement. Accordingly, readers should not place undue reliance on
the forward-looking information and statements contained in this
press release. In respect of the forward-looking information and
statements, Anterra and Terrex have provided such in reliance on
certain assumptions that it believes are reasonable at this time,
including assumptions in respect of: the expected terms of the
Anterra financing, prevailing commodity prices, margins and exchange
rates; that Anterra's future results of operations will be consistent
with past performance and management expectations in relation
thereto; the continued availability of capital at attractive prices
to fund future capital requirements relating to existing assets and
projects, including but not limited to future capital expenditures
relating to expansion, upgrades and maintenance shutdowns; the
success of growth projects; future operating costs; that
counterparties to material agreements will continue to perform in a
timely manner; that there are no unforeseen events preventing the
performance of contracts; and that there are no unforeseen material
construction or other costs related to current growth projects or
current operations.  
Since forward-looking information and statements address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks.
These include, but are not limited to the risks associated with the
industries in which Anterra and Terrex operate in general such as:
operational risks; delays or changes in plans with respect to growth
projects or capital expenditures; costs and expenses; health, safety
and environmental risks; commodity price, interest rate and exchange
rate fluctuations; environmental risks; competition; failure to
realize the anticipated benefits of the Arrangement and to
successfully integrate Terrex and Anterra; failure of Anterra to
close the Anterra financing on the terms set forth herein or at all,
however, the financing is not a condition to the completion of the
Arrangement; ability to access sufficient capital from internal and
external sources; and changes in legislation, including but not
limited to tax laws and environmental regulations. Risks and
uncertainties inherent in the nature of the Arrangement include the
failure of Anterra or Terrex to obtain necessary securityholder,
government, regulatory, court and other third party approvals, or to
otherwise satisfy the conditions to the Arrangement, in a timely
manner, or at all. Failure to so obtain such approvals, or the
failure of Anterra or Terrex to otherwise satisfy the conditions to
the Arrangement, may result in the Arrangement not being completed on
the proposed terms, or at all. 
Readers are cautioned that the foregoing list of factors is not
exhaustive. Additional information on other factors that could affect
the operations or financial results of Anterra, Terrex and the
combined company, are included in reports on file with applicable
securities regulatory authorities, including but not limited to;
Anterra's management's discussion and analysis of the results for the
year ended December 31, 2011 which may be accessed on Anterra's SEDAR
profile at www.sedar.com and the Annual Information Form of Terrex
for the year ended December 31, 2011 which may be accessed on
Terrex's SEDAR profile. 
The forward-looking information and statements contained in this
press release are made as of the date hereof and Anterra undertakes
no obligation to update publicly or revise any forward-looking
information or statements, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws. 
Neither the TSXV nor its Regulation Services Provider (as that term
is defined in the policies of the TSXV) accepts responsibility for
the adequacy or accuracy of this release. 
Contacts:
Anterra Energy Inc.
Gang Fang
Chief Executive Officer
(403) 215-2383
(403) 261-6601 (FAX)
fangg@anterraenergy.com 
Anterra Energy Inc.
Owen C. Pinnell
Chairman
(403) 215-2427
(403) 261-6601 (FAX)
pinnello@anterraenergy.com
Contacts:
Terrex Energy Inc.
Jonathan Lexier
President & CEO
(403) 264-4430 
Terrex Energy Inc.
Norman Knecht
VP Finance and CFO
(403) 264-4430
www.terrexenergy.ca
 
 
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