Questerre Energy Corporation
TSX : QEC
OSLO STOCK EXCHANGE : QEC

Questerre Energy Corporation

June 07, 2006 00:15 ET

Questerre and Transeuro Announce Development Program for Beaver River Field

CALGARY, ALBERTA--(CCNMatthews - June 7, 2006) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSE:QEC) and Transeuro Energy Corp. ("Transeuro") (TSX-V:TSU) are pleased to announce that they have reached an agreement in principle to amend the Farmout and Operating Agreement (the "Agreement") to allow for a field development program at Beaver River.

Following an analysis of the production results from the A-2 well, both companies have determined that it supports developing the Besa River/Mattson sands as a tight gas resource play. The A-2 well performance has exceeded expectations. It is now producing 2.2 mmcf per day (366 barrels of oil equivalent). This is in excess of the original test rates and is in spite of producing against almost 1,000 psi in the Duke Energy gas pipeline. Assuming gas prices of $5 per mcf, these results meet or exceed the commercial hurdle rates for both companies. Questerre and Transeuro expect that new wells and new completions have the potential to perform even better than A-2 that was recompleted through a 40 year old well bore.

As a result, both companies have agreed to amend the Agreement as follows:

- Transeuro will be recognized as the participating party and Ampac Petroleum Inc. will be released from its obligations under the Agreement

- The requirement for a fourth re-entry to test the commerciality of this play will be dropped from the earning requirements as it is no longer necessary

- The parties will commit to a four well Besa River/Mattson development program and one Nahanni in-fill development well. This program will start in August 2006 and is expected to be completed in the first half of 2007. There will be economies of scale and corresponding cost reductions by committing to a multi-well program, significantly improving the economics. Transeuro will earn 50 percent of all lands and all infrastructure upon completion of one Besa River/Mattson well and the Nahanni well. The following three Besa River/Mattson wells will be joint wells.

Michael Binnion, President and Chief Executive Officer, commented, "Transeuro did an excellent job in a year that was very difficult operationally due to weather and market conditions for equipment. Proving the commerciality of the Mattson sands is a break through for Questerre and we look forward to developing Beaver River together with Transeuro."

Questerre Energy Corporation 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.

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