Terrace Energy Corp. has reached an agreement to earn a significant block of additional acreage in McMullen County, Texas which is on trend with its highly successful STS Olmos Project. The Company has entered into a contract to acquire 33.34% working interest, 24% net revenue interest in 3,616 net mineral acres. Upon satisfaction of the earning provisions of this agreement, this acquisition will bring the Company's net mineral acreage position from 5,105 net acres to 6,310 net acres.
The Company has reached an agreement to acquire 33.34% working interest in an initial tract of 199.05 net mineral acres in exchange for a payment of US$33,173.00 and funding its proportionate share of an initial horizontal well into the Olmos formation at an estimated net cost to the Company of $1.8 million. Upon successful completion of the initial well, the Company will have 90 days in which to exercise its option to acquire at least 33.34% working interest in an additional 3,416.95 net mineral acres for an additional cash payment of approximately US$700,000.00.