Questerre Energy Corporation

Questerre Energy Corporation

June 12, 2006 02:15 ET

Questerre Commences Gas Production from Vulcan

CALGARY, ALBERTA--(CCNMatthews - June 12, 2006) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSE:QEC) is pleased to report that gas production has commenced from its new pool discovery in the Vulcan area of Southern Alberta.

An analysis of the pressure information recently obtained after the testing of the 7-29 well indicates that the oil and gas pools are two separate pools. As a result, Questerre expects that both gas and oil production will proceed concurrently.

Three (1.5 net) wells in Vulcan have recently commenced production of gas and associated liquids at an initial combined rate of approximately 400 (200 net) boe per day. The Company's fourth gas well has not yet been tied-in. Production from these three wells is currently constrained by the capacity of a third-party gas pipeline system and is subject to a best-efforts gas processing agreement. To alleviate the pipeline production constraint, the operator is completing a gas pipeline to a high-pressure gas gathering system to a second gas plant in the area. This second pipeline is expected to be operational by the end of June and additional gas and associated liquids production of approximately 600 to 800 (300 to 400 net) boe per day is expected to be able to flow against pipeline pressure at that time.

The operator also has entered into an agreement to purchase an existing gas plant located in northeast BC and plans to relocate the compression and dehydration components to Vulcan. This compression facility is expected to be operational in September and will allow the Company to deliver the balance of its behind-pipe production capability into the high-pressure Vulcan pipeline system.

Questerre also reported that the 16-20 well at Vulcan has been completed and is currently testing oil. This well is expected to commence a four-month production test in July, subject to installation of a single-well battery.

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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