Terra Energy Releases Results of Second Quarter 2008

Terra Energy Corp. ("Terra Energy" or the "Company") (TSX VENTURE:TTR) is
pleased to release its Financial Statements and related Management's Discussion
and Analysis for the three month period and the six month period ended June 30,
2008. Copies of Terra Energy's second quarter 2008 results may be obtained at
www.sedar.com or www.terraenergy.ca.


The second quarter of 2008 was highlighted by the successful closing of the
previously announced (May 12th, 2008) sale by Terra Energy of its Montney P&NG
rights in British Columbia for total proceeds of approximately $65.2 million.
The proceeds have been used to eliminate the Company's bank debt as well as to
increase and accelerate the Company's 2008 capital expenditure program.


The Company's production rate averaged approximately 3,400 boed during the
second quarter of 2008. This is consistent with the Company's expectations for
this period and is a result of the McMahon Gas Processing Plant (the "McMahon
Plant") being shut down for a major routine maintenance program, which typically
occurs every three years. As a result of Terra Energy's asset base being so
focused in the Fort St. John area, approximately 90% of the Company's production
is processed at or impacted by the McMahon Plant. The curtailment of gas and the
shut down of operations at the McMahon Plant resulted in a loss of production by
the Company for almost all of the month of June 2008. This resulted in a
reduction of production by the Company during the second quarter of 2008 by
approximately 27% when compared to first quarter 2008 production. The
maintenance program was carried out successfully by the McMahon Plant operator
and should not adversely impact Terra Energy's production rates going forward. 


Second Quarter 2008 Highlights:

- Sale of Montney P&NG rights successfully closed for approximately $65.2 million.

- Average production per day increased 47.4% to 4,041 boed for the six month
period ended June 30, 2008 compared to same period in 2007.


- Gross revenue increased 81.3% year over year from $22.7 million to $41.1
million for the six month periods ended June 30, 2007 and 2008.


- Cash flow from operations rose 134% year over year from $8.1 million to $19.0
million for the six month periods ended June 30, 2007 and 2008.


- Operating expense per unit of production decreased 13.5% year over year from
$13.31per boe to $11.51 per boe for the six month periods ended June 30, 2007
and 2008.


- Net income increased 401.8% year over year from a loss of $1.5 million to
income of $4.7 million for the six month periods ended June 30, 2007 and 2008
inclusive of an unrealized loss on financial instruments of $12.3 million and a
gain on disposition of P&NG rights of $14.5 million.


OPERATIONS

In addition to the curtailment and shut down of production associated with the
major routine maintenance program carried out at the McMahon Plant, certain
volumes of the Company's gas produced from our Sunrise Gas Field and being
processed at the Doe Creek processing facility experienced intermittent
interruption during the second quarter due to operational issues at the
processing facility. The Company's production at Sunrise was tied in during the
first quarter of 2008. Management is working with the third party operator to
resolve these issues at the processing facility in order to be able to produce
and process its total firm capacity at this processing facility (approx. 500
boed).


During the second quarter, the Company resumed its 2008 Capital Expenditure
Program. The Company started with two drilling rigs after the spring break-up,
and now has three drilling rigs engaged on its drilling program. A detailed
operational update is anticipated to be released by the Company in approximately
three weeks, and the Company remains on track with its target exit rate for 2008
of 5,700 boed.


READER ADVISORY

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.


The media release may contain forward-looking statements including expectations
of future production, cash flow and earnings. These statements are based on
current expectations that involve a number of risks and uncertainties, which
could cause actual results to differ from those anticipated. These risks
include, but are not limited to: the risks associated with the oil

and gas industry (eg., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of reserve
estimates; the uncertainty of estimates and projections relating to production,
costs and expenses, and health, safety and environmental risks), commodity
price, price and exchange rate fluctuation and uncertainties resulting from
potential delays or changes in plans with respect to exploration or development
projects or capital expenditures. Additional information on these and other
factors that could affect Terra Energy's operations or financial results are
included in Terra Energy's reports on file with Canadian securities regulatory
authorities.


Terra Energy is a junior oil and gas company engaged in the exploration for, and
development and production of, natural gas and oil in Western Canada. Terra
Energy's common shares trade on the TSX Venture Exchange under the symbol 'TTR'.
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