Terrace Announces Completion of Note Exchange

VANCOUVER, May 13, 2016 /CNW/ - Terrace Energy Corp. (the "Company" or "Terrace") (TSXV: TZR, OTCQX: TCRRF; Germany: 2TR) is pleased to announce that, further to its press release dated May 11, 2016, it has completed its previously announced plan of arrangement (the "Arrangement"), pursuant to which all of the Company's outstanding 8% convertible unsecured notes due April 2, 2018 have been exchanged for new convertible secured notes due April 2, 2021 (the "New Notes").

The New Notes will be listed for trading on the TSX Venture Exchange on May 17, 2016 under the ticker symbol "TZR.DB".

For further information regarding the New Notes, please refer to the Company's management information circular dated April 8, 2016, a copy of which is available under the Company's profile on SEDAR at www.sedar.com and the terms of the indenture underlying the New Notes.

About Terrace

Terrace is an oil & gas development stage company that is focused on unconventional oil extraction in onshore areas of the United States with a particular focus on South Texas.

ON BEHALF OF THE BOARD OF DIRECTORS

"Dave Gibbs"

Dave Gibbs, President and Chief Executive Officer

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Terrace Energy Corp.

please contact: [email protected], www.terraceenergy.net, Canadian Address: P.O. Box 21546, 1424 Commercial Drive, Vancouver B.C., V5L 5G2, Ph: 604 282-7897, Fax: [phone]; US Address: Suite 407-202, Travis Street, Houston Texas, 77002, Ph: 713 227 0010