Questerre Energy Corporation
TSX : QEC
OSLO STOCK EXCHANGE : QEC

Questerre Energy Corporation

August 13, 2008 00:15 ET

Questerre Energy Corporation: Second Quarter Cash Flow Increases 60% Over Prior Year

CALGARY, ALBERTA--(Marketwire - Aug. 13, 2008) -

NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSLO:QEC) reported today on its financial and operating results for the second quarter of 2008.

Michael Binnion, President and Chief Executive Officer, commented, "We had a major breakthrough in the Lowlands with the significant discovery and announced appraisal programs by our partners. Although eclipsed by these developments, we also had excellent results on our entire portfolio during the second quarter of this year. Financially, the improved oil weighting and higher commodity prices translated into cash flow of $5.14 million for the quarter."

Highlights

- Cash flow from operations for the quarter increased over 60% to $5.14 million from $3.18 million in 2007

- Significant pilot programs well underway in St. Lawrence Lowlands, Quebec

- Commenced full development in Antler, Saskatchewan after successful pilot program

- Tested 1,000 boe/d light oil well in Vulcan, Alberta using selective fracture stimulation

- Increased working interest in the Lowlands and acquired a seismic database through purchase of Terrenex

- Completed $75 million equity offering

Cash flow from operations for the second quarter of 2008 grew to $5.14 million from $3.18 million in 2007 and $3.94 million in the first quarter. The increase reflects the higher oil weighting in the Company's production profile and stronger commodity prices and netbacks during the quarter. The proceeds from the recently completed equity issue resulted in a working capital surplus of $68.45 million at June 30, 2008 as compared to $10.00 million at December 31, 2007 and a deficiency of $4.51 million at March 31, 2008.

Petroleum and natural gas revenue for the three months ended June 30, 2008 was $9.04 million. This represents a 38% increase over revenue of $6.56 million in the same period in 2007 and 25% over revenue of $7.23 million in the first quarter of this year. With average daily production of 1,241 boe/d (2007: 1,443 boe/d) in the quarter, higher commodity prices were responsible for the higher revenue. The Company reported a net loss after income taxes of $2.67 million for the quarter as compared to a gain of $0.94 million in 2007. The loss in 2008 is primarily attributable to a non-cash future tax loss of $2.43 million.

Questerre is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.

Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.

This news release does not constitute an offer of securities for sale in the United States. These securities may not be offered or sold in the United States absent registration or an available exemption from registration under the United States Securities Act of 1933, as amended.

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