LG Lahontan Gold Corp

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Terrace Energy Corp. (the "Company") (TSX
VENTURE:TZR)(OTCQX:TCRRF)(FRANKFURT:2TR) is pleased to announce the following
financing arrangements. 


LG FINANCING 

The Company has entered into agreements with LG Energy North America LLC
("LGENA") whereby LGENA will subscribe for 20,000,000 common shares of the
Company at a price of $1.50 per share for aggregate gross proceeds of
$30,000,000 (the "Private Placement") and will invest an additional $60,000,000
(the "SPV Financing") into a special purpose entity (the "SPV"), as further
described below, to provide supplemental project financing for new exploration
and development opportunities in the future. LGENA will be a subsidiary of LG
International Corp. of Korea ("LG") on closing of the Private Placement.


The Company has also agreed to purchase a 10% interest in the SPV, valued at
$6,000,000, from LG for 4,000,000 common shares of the Company at a deemed value
of $1.50 each. The parties have agreed to use their commercially reasonable
efforts to complete the SPV Financing and the Company's purchase of its interest
in the SPV within 30 business days of the date on which the Private Placement
closes.


The SPV Financing would be used by the SPV to finance the acquisition of working
interests in new oil & gas prospects generated by the Company. The SPV will be
jointly managed by representatives of the Company and LGENA. The Company would
be granted the ability to earn an additional 20% equity interest in the SPV upon
the SPV meeting certain financial milestones.


Dan Carriere, the Company's Chairman, commented: "We are extremely pleased with
the opportunity to work together with LG to build Terrace Energy into a
significant company. LG's decision to make their first foray into the
acquisition and development of North American oil & gas interests through
Terrace Energy clearly demonstrates the confidence they have placed in our
projects, management and technical teams." 


The Company has agreed to pay a 4% fee in respect of the Private Placement on
closing. 


On closing of the transactions set out above, LGENA would own approximately
27.5% of the then issued and outstanding common shares of the Company.


The Private Placement and the Company's purchase of a 10% interest in the SPV
are conditional upon, among other things, the execution of definitive
documentation and receipt of TSX Venture Exchange and shareholder approval. The
SPV Financing is conditional upon closing the Private Placement and the
execution of definitive documentation. There can be no assurances given that
such transactions will close.


CONVERTIBLE NOTE FINANCING 

In addition to the Private Placement, the Company is also carrying out a
non-brokered private placement of convertible, unsecured promissory notes in the
maximum aggregate principal amount of $25,000,000 (the "Convertible Notes") with
the following material attributes:




Term:               5 years from closing                                  
Interest rate:      8% per annum, payable quarterly                       
Conversion price:   $2.00 per share                                       



The principal amount owing under the Convertible Notes will be due and payable
on the fifth anniversary of the closing date, unless earlier redeemed or
converted pursuant to the terms of the Convertible Notes. 


The Company would have the right to convert of all or part of the Convertible
Notes into common shares at any time after 12 months from closing if the market
price of the common shares on the TSX Venture Exchange trades at $2.80 or higher
for a period of 30 consecutive trading days. In addition, the Company would have
a limited right to redeem all or part of the Convertible Notes at any time after
12 months from closing by offering cash equal to 1.08 multiplied by the
principal amount that is called for redemption.


Holders of the Convertible Notes may convert all or part of the outstanding
principal amount of their Convertible Notes at the conversion price at any time
during the term of the Convertible Notes, in accordance with the terms thereof.
In the event of a change of control of the Company where a person acquires more
than 50% of the outstanding common shares of the Company, holders of Convertible
Notes will be entitled to require the Company to redeem the Convertible Notes in
certain circumstances. 


The Convertible Notes are non-transferable unless otherwise agreed to by the
Company. 


Insiders of the Company may purchase up to a maximum of 10% of the principal
amount of the Convertible Notes issued. 


The Company may pay a finders' fee to eligible brokers in respect of a portion
of the principal amount of the Convertible Notes. 


The issuance of the Convertible Notes is conditional upon, among other things,
the receipt of final documentation and TSX Venture Exchange approval. There can
be no assurance given that the proposed private placement of Convertible Notes
will close.


The proceeds of the Private Placement and the Convertible Notes would be used to
fund current and proposed financial commitments, including those arising from
the proposed agreement announced on February 26, 2013, if closed, and for
general working capital purposes. 


About LG

LG International Corp. is a Korean conglomerate with 147 subsidiaries operating
in over 50 countries with annual sales exceeding US$100 billion. LG has
successfully invested and operated in the oil and gas exploration and production
business outside of North America for over 20 years including current upstream
oil and gas projects in Oman, Vietnam and Kazakhstan.


About Terrace Energy

Terrace Energy is an oil & gas development stage company that is focused on
unconventional oil extraction in onshore areas of the United States. It
currently has two principal properties situated in South Texas with targets in
the "Olmos" and "Eagle Ford" formations and an option to acquire a third
property in Kansas that targets the Mississippian Lime Trend. In addition, it
has entered into a non-binding agreement to acquire an interest in significant
acreage in Southern Texas with targets in four actively explored primarily oil
shale formations (see press release dated February 26, 2013).


ON BEHALF OF THE BOARD OF DIRECTORS

Eric Boehnke, Chief Executive Officer

This news release does not constitute an offer to sell or a solicitation of an
offer to buy any of the Company's securities in the United States. The
securities have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "1933 Act"), or any state securities
laws and may not be offered or sold within the United States or to U.S. persons
unless registered under the 1933 Act and applicable state securities laws, or an
exemption from such registration is available. Any public offering of securities
in the United States must be made by means of a prospectus that contains
detailed information about the Company and its management, as well as financial
statements.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Terrace Energy Corp.
Eric Boehnke
Chief Executive Officer
604 628-4552
604 687-0885 (FAX)
terrace@terraceenergy.net
www.terraceenergy.net

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