Corporate Presentation

Corporate

Presentation

A

t 2010

Certain information and statements contained in this presentation contain forward‐looking information or statements (“forward–looking statements”) within the meaning of applicable securities laws. In particular and without limiting the foregoing, there are statements regarding Terra Energy Corp.’s (the “Corporation”) exploration, development, drilling and recompletion plans, growth and expansion plans, use of science and technology, facility and infrastructure construction, project and operational planning, work on both conventional and non‐conventional plays, the Corporation’s commodity mix, expectations of future expenditures, future production, cash flow, net debt and sources of funding. All forward‐looking statements contained herein that are not clearly historical in nature constitute forward‐looking statements, and the words “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “propose”, “predict” “potential” “continue” or the negative of these terms or other comparable terminology are generally intended to identify forward‐looking statements These statements involve knownpredict , potential , continue , or the negative of these terms or other comparable terminology are generally intended to identify forward‐looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or event to differ materially from those anticipated in such forward‐looking statements. Forward‐looking statements include, but are not limited to, references to oil and natural gas production levels; capital expenditure programs; the quantity and composition of oil and natural gas reserves; projections or commodity prices and costs; supply and demand for oil and natural gas; expectations regarding the Corporation’s ability to raise capital and to continually add reserves through acquisition, exploration and development and treatment under governmental regulatory regimes and tax laws. Although the Corporation believes that the expectations reflected in any forward‐ looking statements are reasonable, our forward‐looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate and the Corporation’s actual results could differ materially from those anticipated in these forward‐looking statements. These factors are based on currently available information and include, but are not limited to: volatility in the market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; geological, technical, drilling and processing problems; fluctuations in foreign exchange or interest rates; health, safety and environmental risks; stock market volatility; global economic events or conditions; and other factors, many of which are beyond the control of the Corporation. The Corporation has made assumptions regarding: the impact of increasing competition; the general stability of the economic and political environment in which the Corporation operates; the timely receipt of any required regulatory approvals; the ability of the Corporation to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which the Corporation has an interest to operate the field in a safe, efficient and effective manner; the ability of the Corporation to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Corporation to secure adequate product transportation; future oil and natural gas prices; currency exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the gas prices; currency exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market its oil and natural gas products. As such, readers are cautioned not to place undue reliance on forward‐looking statements as no assurance can be provided as to future results, levels of activity or achievements. This risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available under the Corporation’s profile at www.sedar.com.

Past performance of the Corporation referred to in this presentation is shown for illustrative purposes only, does not guarantee future results of the Corporation and is not meant to forecast, imply or guarantee the future performance of the Corporation, which will vary. References to Net Asset Value due not represent Fair Market Value.

Readers are cautioned that the foregoing list of factors affecting forward‐looking statements is not exhaustive. Furthermore, the forward‐looking information and statements are made as of the date of this presentation, and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward‐looking information or statements, whether as a result of new information, future events or otherwise, expect as required by applicable law. The forward‐looking statements contained in this presentation are expressly qualified by this cautionary statement.

Certain information set out under the heading “Growth in Per Share Value”, “Cash Flow” and “Targeted Results” is “financial outlook” within the meaning of applicable securities laws. The purpose of the financial outlook is to provide readers with disclosure regarding the Corporation’s reasonable expectations as to the anticipated results of its proposed business activities for 2010 and beyond. Readers are cautioned that this financial outlook is based upon numerous assumptions and may not be appropriate for other than indicative purposes.

A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such disclosure of boe’s may be misleading, particularly if used in isolation.

TSX Symbol 

“TT”

Shares Outstanding (basic)

99 0 MM

Shares Outstanding (basic)

99.0 MM

Shares Outstanding (fd)

114.7 MM

Recent Price

$1.50

Average Daily Volume (3 month

1

₎

_95,132

Market Capitalization

$142.7 MM

l

b

2

_$

Total Net Debt

2

_$51.0 MM

Enterprise Value (basic)

$193.7 MM

Current Bank Line

$80.0 MM

3

Consistent

growth

in

per

share

value

Manage

and

minimize

risks

Both

strategic

and

opportunity

driven

Awareness of the time value of assets

Awareness

of

the

time

value

of

assets

Keen sense of stewardship

Keen

sense

of

stewardship

Per Share Value Growth - Production

73

80

10,000

Ave

r

59

68

73

60

8,000

rag

e

daily

p

n

(b

o

e

/d

)

44

40

4 000

6,000

p

ro

d

u

ct

io

n

(b

o

e

/d

)

y

pr

oduc

ti

o

26

30

34

20

2 000

4,000

pe

r

m

illio

n

er

a

ge

dail

y

1,096

2,069

2,819

3,266

4,399

5,946

7,187

‐

‐

2,000

n

_sh

a

re

s

Av

5

2004

2005

2006

2007

2008

2009

Q1

‐

10

Per Share Value Growth - Reserves

300

30,000

231

253

273

200

250

20 000

25,000

P+

P

Res

e

o

e)

183

213

₂₀₅

150

200

15,000

20,000

rv

es

pe

r

th

erv

es

(M

b

o

100

10,000

ou

sa

n

d

sh

a

P+

P

Res

e

7,673

14,501

15,783

17,167

18,826

24,003

‐

50

‐

5,000

are

s

_(b

o

e)

6

‐

‐

2004

2005

2006

2007

2008

2009

Manage and Minimize Risks

Commitment to advancing the Montney “resource” play which is 

characterized by:

y



Lower

geological

risk

di

bl i

i i

d

i

d

ddi i



More

predictable

in

timing,

costs,

production

rates

and

reserve

additions



Potential

for

steady

long

term

production

growth



Lower

than

average

F&D

costs

Assets predominantly focused in the Peace River Arch, known as 

h i

lti

t

ti l

having multi‐zone potential

Strategic and Opportunity Driven/Time Value

+

+

2008:

Sale

of

Montney

2009:

Purchase

of

equivalent

2010:

Major

asset

exchange

+

2010:

Synergistic

farm

‐

in

deals and crown

+

+

Montney

rights

for

$72

million

equivalent

Montney

upside

for

$8

million

g

agreement,

addition

of

~

70

net

sections

of

land

in

th M

t

+

deals

and

crown

land

acquisition

program

=

the

Montney

One of the largest prospective land holdings in the BC

One of the largest prospective land holdings in the BC 

unconventional Montney gas play

over

net sections

8

Stewardship

Terra

Management

Retail

25%

Retail

25%

Institutional

Management

interests

are

aligned

with

shareholder

interests

9

Conventional & Unconventional

Conventional

Unconventional

St

d ti

b

7 187 b

/d

•

Over 135 net sections within the highly

•

Strong

production

base

7,187

boe/d

•

>24

million

boe

(P+P)

reserves

•

>8.8

year

RLI

(P+P)

•

Over

135

net

sections

within

the

highly

prospective

Montney

Fairway

•

Committed

nearly

half

the

capital

budget

•

~49%

proved

producing

•

Focused

operations

in

Peace

River

Arch

and

Other

areas

of

multi

‐

zone

potential

towards

the

Montney

in

2010

•

Recent

acquisition

metrics

support

importance of the Montney

•

High

working

interest

•

Ownership

of

infrastructure

$

importance

of

the

Montney

•

Resource

play

is

being

de

‐

risked:



A

d

i i

l

•

Low

cost

producer

F&D

~

$11/boe (P+P)

•

Operating

costs

~$10/boe



Announced

positive

results

at

Groundbirch in

April

2010



Successfully

completed

100%

HZ

well

at

Altares

10



Wilder/Monias well

program

has

commenced

1_{Q1 average daily production}

Land Base

Fringing Reef ‐Peace River Arch Terra Lands

BC AB

Over

O e

550,000

net undeveloped acres

11

Montney Fairway

Over

136

AB

BC

136

net sections in the

net

sections

in

the

Montney

Fairway

Over mature, extreme 

Terra lands with Montney rights

T L d ith th i ht

12

, depth and reduced 

porosity

Oil/Gas Maturation Line Terra Lands with other rights

2010 Capital Budget ‐

Minimum Investment of $65 Million

1

Facilities

9%

Facilities

9%

Gathering/

l

Other

3%

Montney

Alberta

Pipelines

5%

y

46%

42%

_Drilling

57%

Completions

26%

B.C.

–

Other

12%

13

Banks

TD

Canada

Trust,

Canadian

Imperial

Bank

of

Commerce

Legal

Firm

Borden

Ladner Gervais LLP

Auditors

Deloitte

&

Touche

Transfer

Agent

Computershare

Trust

Company

of

Canada

Reserve

Engineers

GLJ

Petroleum

Consultants

Ltd.

Investor Contact

Berk Sumen

th

Berk Sumen Manager, Corporate Affairs T: 403.699.7769 E: [email protected] Suite 907, 333‐7th_Avenue S.W. Calgary, Alberta T2P 1Z1 T: 304.699.7777 E: [email protected] www.terraenergy.ca

14

Appendices

A:

Peer

Comparisons

B:

Reserves

Summary

C

L

d S

C:

Land

Summary

D:

Board

of

Directors

E:

Executive

Team

F:

Asset

Acquisition

q

G:

Analyst

Coverage

Peer Comparisons

Company Symbol Q1 Prod.

Recent Share Price1 Shares Issued (3/31/10) Market

Cap. Net Debt

Market

Cap. + Net Debt =

Enterprise Value 2009 F&D Cost Q1 Operating Expense

(boepd) ($) (M) ($MM) ($MM) ($/boepd) ($/boepd) ($/boepd) ($/boe) ($/boepd)

Prospex Resources Ltd PSX T 3 807 1 54 57 385 88 4 24 2 23 213 6 366 29 580 6 77 7 16

Prospex Resources Ltd PSX-T 3,807 1.54 57,385 88.4 24.2 23,213 6,366 29,580 6.77 7.16

Orleans Energy Ltd OEX-T 3,638 2.81 65,176 183.1 39.1 50,342 10,752 61,094 N/A 10.15

Black Pearl Resources PXX-T 6,685 3.12 262,181 818.0 - 122,364 - 122,364 N/A 17.54

Bellatrix Exploration Ltd BXE-T 7,248 3.69 92,474 341.2 73.6 47,079 10,156 57,236 6.97 13.36

Vero Energy Inc VRO-T 8,404 6.60 43,391 286.4 112.3 34,077 13,362 47,439 6.98 8.50

Vero Energy Inc VRO T , , , , ,

Delphi Energy Corp DEE-T 7,645 2.66 101,455 269.9 113.2 35,300 14,812 50,112 9.21 8.71

Anderson Energy Ltd AXL-T 7,000 1.20 172,400 206.9 65.8 29,554 9,393 38,948 7.97 10.91

Freehold Royalty Trust FRU.UN-T 7,331 17.03 57,926 986.5 80.1 134,563 10,927 145,490 N/A 4.03

Angle Energy Inc NGL-T 8,003 7.76 54,780 425.1 60.7 53,117 7,586 60,703 12.11 5.75

Storm Exploration Inc SEO-T 8,346 13.91 46,985 653.6 111.3 78,308 13,333 91,642 14.69 4.78

Equal Energy Ltd EQU-T 9,507 5.83 65,165 379.9 153.7 39,961 16,162 56,123 15.81 10.08

Birchcliff Energy Ltd BIR-T 10,407 10.15 124,359 1,262.2 232.3 121,288 22,320 143,608 5.37 9.03

Zargon Energy Trust ZAR.UN-T 10,062 17.99 23,345 420.0 95.4 41,739 9,478 51,217 16.45 13.40

11 875 20 46 72 225 1 477 7 117 2 124 440 9 869 134 309 29 27 13 22

Paramount Resources POU-T 11,875 20.46 72,225 1,477.7 117.2 124,440 9,869 134,309 29.27 13.22

Crew Energy Inc CR-T 15,022 17.14 79,421 1,361.3 191.9 90,619 12,772 103,391 9.68 11.10

Celtic Exploration Ltd CLT-T 17,302 12.97 44,778 580.8 126.8 33,567 7,328 40,894 9.84 9.25

Average (incl. Terra) 8,792 8.61 86,029 581.7 103.0 63,541 11,357 74,230 11.59 9.81

16

1 As at July 23, 2010, recent price used for Terra

Reserves Summary

December

31,

2009

Reserve

Volumes

and

Before

Tax

Present

Value

Reserves At December 31, 2009 Oil (bbls) Gas (mmcf) Liquids (bbls) Total (BOE)

Proved Producing        1,587,000       51,535       1,614,000        11,790,167

Proved Non‐Producing        525,000       18,789        509,000       4,165,500

Total Proved        2,112,000       70,324       2,123,000        15,955,667

Before Tax Net Present Value of Net Production Income‐2009

Total Probable        649,000       38,652        957,000       8,048,000

Total P+P        2,762,000        108,975       3,079,000        24,003,000

Reserves At December 31, 2009 Undiscounted

0% 5% 10% 15% 20%

Proved Producing $287,404,000 $219,282,000 $179,688,000 $153,790,000 $135,449,000

Before Tax Net Present Value of Net Production Income   2009

Discounted

Proved Non‐Producing $92,467,000 $71,484,000 $58,545,000 $49,708,000 $43,254,000

Total Proved $379,871,000 $290,766,000 $238,233,000 $203,498,000 $178,703,000

Total Probable $205,423,000 $115,197,000 $75,551,000 $54,117,000 $40,928,000

17

Total P+P $585,294,000 $405,963,000 $313,784,000 $257,615,000 $219,631,000

Land Summary

Gross Acreage Net Acreage Royalty Acreage

Developed Undeveloped Developed Undeveloped Developed Undeveloped

Total Acres 253,210 682,908 113,537 572,430 4,045 9,917 Totals 936,118 685,967 13,242 Total Hectares 101,219 272,555 45,415 228,299 1,618 3,679 Totals 373,774, 273,714, 5,297, Total Sections1 _{396 1,067 177 894 6 14} Totals 1,463 1,071 20

18

1 Calculations are made using standard 640 acre sizing. As at May 26, 2010

Board of Directors

Ted S. Anderson 3,4

Founder, Pioneer Land & Environmental  Robert D. Penner

1,2

Former Senior Tax Partner KPMG ,

Services

Ralph G. Evans 1,3,4

Petroleum Engineer

b d b f ( )

Former Senior Tax Partner, KPMG Lead Director

James (Jim) F. Wong 3,4

Petroleum Engineer B i

Former board member of ERCB (AEUB)

Colin P MacDonald 2

Partner, Borden Ladner Gervais, LLP

Cas H. Morel2,3,4

Businessman

Director of several international based 

companies

Brian Yaworski1,2

Cas H. Morel 

President and CEO, Terra Energy Corp. Chairman

Broad base of business experience Counsel at Davis LLP

1 Member of Audit Committee

2 Member of Corporate Governance, Compensation 

d N i i C i

19

and Nominating Committee

3 Member of Engineering and Reserves Committee 4 Member of Safety and Environment Committee

Executive Team

Cas H. Morel, President & CEO

Businessman, founder of predecessor of Terra Energy in 1996 BSc LL B MBA

BSc ,LL.B., MBA

25+ years experience in oil and gas industry and resource sector

Bud K. Love, VP,  Finance & CFO

CFO and VP Finance of Rhodes Resources Corp CFO and VP Finance of Rhodes Resources Corp.

Former principle of BKL and Associates Inc., specializing in tax matters Former Controller Startech Energy Corp.

25+ years oil and gas accounting and tax experience

Tim A. Beatty, Executive VP, B.C. Operations

Professional engineer with 25+ years of professional experience in Western Canada and international PanCanadian, Apache Canada, Santos 

Member of APEGGA and SPE

Tony Sabelli, Executive VP, Alta./Sask. Operations 

Over 30 years experience in oil and gas industry in Western Canada

Geoscience Team

John M. Behr, VP, Exploration

Professional Geophysicist with 24 years of industry experience,  VP of Exploration at Terra since 2005 Successful oil and gas explorer at  Shell, Renata Resources, Rio Alto, CNRL, El Paso and Dominion Canada

O i i f ff i l i i d h d

Originator of effective exploration strategies and methods

John Andersen, Chief Geologist

Professional geologist with over 30 years experience in Western Canada, successful oil finder, multi‐dimensional 

explorer and team leader

Finder at Poco Petroleums, Petro‐Canada, Relentless Energy and Encor Founder of Redcliffe Energy, Exploration Manager at Progress Energy

Steve Aitken, Montney Co‐lead 

PhD. in Geology with 15 years of exploration and development experience, Co‐lead on Terra’s Montney play Both clastic and carbonate expertise, successful explorer at  Amoco, Petro‐Canada, EBOC, El Paso and Relentless

Michael Doty, Senior Geophysicist

Professional  geophysicist with 25 years of industry experience, expert at seismic interpretation and acquisition Explored at UNOCAL, Petrostar, Canadian Conquest  and Canext as well as independent  consultant

Craig Smith, Geologist

Professional geologist with 8 years of industry experience, involved and integral to all of Terra Energy’s success Proven finder with over 65 wells of experience

Michael Oforsagd, Senior Exploration

21

Over 35 years of experience, adds valuable experience, history as well as new ideas Atlantic Richfield Canada, Petro‐Canada, Dome Petroleum, Amoco Canada

Senior Engineering Team

Tim Beatty, Executive V.P., B.C. Operations

Tony Sabelli, Executive V.P., Alta./Sask. Operations 

Gord Oliver, V.P. Exploitation B.C.

Professional Engineer with 25 years of engineering experience in the oil and gas industry Specific strengths in exploitation and reservoir engineering

Previous industry companies include Tom Brown Resources, Stellarton Energy, Jordan Petroleum Member of APEGGA and SPE

Alan Bertram, V.P. Exploitation Alberta and Saskatchewan

Professional  Engineer with over 15 years of experience Experience in horizontal drilling and waterflood techniques Experience in horizontal drilling and waterflood techniques Member of APEGGA and SPE

Graham Collins, V.P. Production

Professional Engineer with almost 33 years of experience in the energy industry

Responsible for Terra Energy’s Production, Field Operations, Joint Venture, Environment Health and Safety, 

Marketing and Emergency Response Plan

Previous industry companies include Rigel Oil and Gas, Bowview Petroleum, TransCanada Pipelines, Pioneer 

Energy, Hunt Oil and Murphy Oil

22

Senior Engineering Team

John Hrycyk, Manager of Facilities

Professional engineer with over 17 years experience in the energy industry

Experience in joint interest, process design, mechanical design, research and development and project engineering Member  of APEGGA, Professional Engineers and Geoscientists of British Columbia and American Society of    

Mechanical Engineers

Darcy Spratt, Senior Exploitation Technologist

Over 29 years of oil and gas experience with specific experience in exploitation, reserve and economic evaluations Previous industry companies include Advantage Energy, Great Plains Exploration and Zapata Energy

Member with the Association of Science and Engineering Technology Professionals (ASET) and a Registered 

Engineering Technologist (RET)

Terry Mah Engineering Consultant

Terry Mah, Engineering Consultant

Professional  Engineer with 25 years of engineering experience in the oil and gas industry

Specific strengths in exploitation and reservoir engineering, acquisition and divestitures and horizontal drilling Previous industry companies include Rising Sky Energy, Redsky Energy, Compton Petroleum, CNRL

Member of APEGGA Member of APEGGA

Senior Land Team

Mike Haug, Area Land Manager, B.C

Chief Negotiator for British Columbia

Over 30 years experience in virtually all aspects of the oil and gas and mining industries.  Previously, CEO of Fernz Sulfer Works Inc. and has occupied senior executive and management positions at Canterra Energy Ltd., Husky Oil and CDC Oil 

& Gas Ltd.

Studied Business Administration at the University of Saskatchewan

Paul Lyzaniwski, Manager, Alberta Lands

Chief Negotiator for Alberta

Senior Mineral Landman with over 18 years of wide‐ranging industry experience including senior and supervisory 

positions in administration, contracts and negotiations at Compton Petroleum Corporation, Canadian Natural Resources 

and Fletcher Challenge Petroleums Inc. 

Studied Advanced Economics and Finance at the Universities of Regina and Calgary

Kevin Wolters, Manager, Land Contracts and A&D

Contracts Landman/ Lawyer with over 14 years of oil and gas industry experience including permanent and consulting 

land contracts and A&D positions at companies including ExxonMobil, Paramount Resources, Suncor Energy, BP Energy 

Canada, Canadian 88 Energy Corp.

B Comm (Corporate Finance) University of Calgary 1988 LL B University of British Columbia 1991 B.Comm. (Corporate Finance) University of Calgary, 1988, LL.B. University of British Columbia, 1991 Particular expertise in A&D, contract drafting and freehold mineral rights

Jeff Pike, Manager of Land Administration and Records

Petroleum Landman with over 30 years experience in the oil and gas industry including senior management and 

negotiating positions at Chevron Canada Resources and has consulted to various major industry players including

24

negotiating positions at Chevron Canada Resources, and has consulted to various major industry players including 

EnCana and Gulf Canada Resources

Senior Finance Team

Bud Love,Chief Financial Officer

Yvonne Frame‐Zawalykut,Controller

Chartered Accountant with 14 yearsy  experience,p , y 4 yrs in the oil and gasg  industryy B.Comm from University of Calgary in 1994, CA designation in 1997

Articled with Coopers & Lybrand

Held various senior accounting roles at TransCanada, Loblaw Companies, and Husky Energy

Rosa Lyngberg,Special Projects

Chartered Accountant with 15 years oil and gas experience

B.Comm from University of Calgary, BA from University of British Columbia; CA designation in 1993 Articled with Price Waterhouse LLP

Held various senior accounting roles as Controller at Terra Energy from 2006‐2007 and previously as Controller at Tri 

Link Resources Ltd Current responsibilities include treasury insurance internal controls and International Financial Link Resources Ltd. Current responsibilities include treasury, insurance, internal controls, and International Financial 

Reporting Standards project

Federica Petraschuk,Accounting Manager

+25 years experience in oil and gas accounting in various roles including Assistant Controller, Manager of 

Accounting JV and Operational accounting Accounting, JV and Operational accounting  

April Vann,Operations Accountant

+ 18 years experience in oil and gas accounting in various roles including JV, Production and Capital accounting, as 

well as various systems roles 

B Comm from University of Saskatchewan CMA designation in 1995 CAPPA certificate

25

Proposed Square Creek Asset Acquisition

Production:

1,450

boe/d

Reserves:

4 3 MM b

d

4.3

MM

boe

proved

2.7

MM

boe

probable

7.0

MM

boe

P+P

Undeveloped land: over 80 000 net acres

Undeveloped

land:

over

80,000

net

acres

Total

Consideration:

$25.6

MM

cash

$9 0 MM shares

$9.0

MM

shares

34.6

MM

Acquisition

Metrics:

Reserves: $4 92/P+P boe

Reserves:

$4.92/P+P

boe

Production:

$23,862/boe/d

Expected

Close:

August

31,

2010

Terra Lands

26

Analyst Coverage