Terra Energy shuts down all production, fires everybody
The company has terminated certain officers of the company and all of its remaining non-executive employees.
Terra has notified its lender, Canadian Western Bank, and both the Alberta Energy Regulator and the British Columbia Oil and Gas Commission of the shutting-in by Terra of its operated/licensed wells and facilities in both Alberta and British Columbia and that Terra no longer has the financial capability to carry on its operations.
The cost of operations, including processing and transportation of commodities, field labour and production costs, royalties, and administrative expenses, exceed gross revenues at current commodity pricing levels.
The company's lender has declined to provide further financial support to Terra and there is no other means of financing available to the company at this time. As such, Terra no longer has the financial capability to carry on its operations.
The company has been actively engaged, with financial advisors, in an asset sales and restructuring process since September of 2015 to monetize any or all assets and shares of the company and to reorganize and restructure the company.
Since commencement of the asset sales and restructuring process began, proceeds from completed transactions of approximately $12 million, have been utilized to reduce the company's indebtedness but the asset sales process has been insufficient to satisfy all the liabilities of the company.
The company's asset sales process has also been hampered in Alberta due to the company having a LMR rating below one. Attempts by the company to reorganize or restructure the company have also been unsuccessful. ■