Questerre Energy Corporation

Questerre Energy Corporation

November 14, 2013 00:15 ET

Questerre Ramps Up Montney Drilling in Fourth Quarter

CALGARY, ALBERTA--(Marketwired - Nov. 14, 2013) -


Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) reported today on its financial and operating results for the third quarter of 2013.

Michael Binnion, President and Chief Executive Officer, commented, "This quarter we laid the groundwork for Montney field development in the Kakwa-Resthaven area of Alberta. We executed the first of several take-or-pay contracts representing 6,000 boe/d for our gas and liquids. These will take all our products from the 'wellhead to the burner tip', an approach that is critical in the current NGL market. These agreements also leverage third party capital to finance infrastructure costs for full development."

He added, "To meet our take-or-pay commitments, we have embarked on an aggressive drilling plan for the fourth quarter. We will see two gross wells in north Kakwa and will also spud a high-impact 100% well in south Kakwa. In addition, we will see four wells in Antler. In spite of losing an estimated 500 boe/d due to the control of well incident on the 09-01 Well, we may yet reach our exit target of 1,500 boe/d with the activity ramp up and our new central facilities at Kakwa."


  • Concluded processing agreement for 20 MMcf/d plus liquids at Kakwa-Resthaven area to guarantee market access
  • Fifth liquids-rich Montney well tests at gross rates of 1,400 boe/d with condensate rates of 195 bbls/MMcf
  • Successful drilling program in Pierson, Manitoba adds 230 bbls/d of light oil production in September
  • Expanded pilot waterflood for light oil pool at Antler, Saskatchewan
  • Average daily production in quarter of 880 boe/d with shut-in production of 170 boe/d and cash flow of $3.64 million

Production during the third quarter of this year averaged 880 boe/d as compared to 696 boe/d in the third quarter of 2012 with the increase due mainly to early, albeit restricted, production from the Kakwa-Resthaven area. Heavy rainfall limited lease access in Antler, Saskatchewan and Pierson, Manitoba and shut-in approximately 90 bbls/d of production primarily from single well batteries. These poor ground conditions also delayed drilling and completion work in Antler into the fourth quarter. At Kakwa, approximately 80 boe/d of production was also shut-in due to limited processing capacity. With three quarters of production from oil and liquids, Questerre reported cash flow from operations of $3.64 million (2012: $2.83 million) during the quarter. As at September 30, 2013, the Company had no drawdowns under its existing credit facility and a working capital surplus of $4.73 million.

Questerre Energy Corporation is leveraging its expertise gained through early exposure to shale and other non-conventional reservoirs. The Company has base production and reserves in the tight oil Bakken/Torquay of southeast Saskatchewan. It is bringing on production from its lands in the heart of the high-liquids Montney shale fairway. It is a leader on social license to operate issues for its Utica shale gas discovery in the St. Lawrence Lowlands, Quebec. In conjunction with a supermajor, it is at the leading edge of commercializing a proven process to unlock the massive resource potential of oil shale.

Questerre is a believer that the future success of the oil and gas industry depends on a balance of economics, environment and society. We are committed to being transparent and are respectful that the public must be part of making the important choices for our energy future.

This media release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the Company's plans to secure the additional capital necessary to ramp-up development of its acreage in the Kakwa-Resthaven area of Alberta, the expected production growth in the Kakwa-Resthaven, Antler and Pierson areas, and the ability of the Company to meet its production target for year-end 2013. Although Questerre believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to Questerre. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. As such, readers are cautioned not to place undue reliance on the forward-looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Questerre does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

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.

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 of oil and the conversion ratio of one barrel to six thousand cubic feet 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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

This press release contains the term "cash flow from operations", which is an additional IFRS measure and the terms "working capital surplus", and "netbacks" which are non-IFRS terms. Questerre uses these measures to help evaluate its performance.

As an indicator of Questerre's performance, cash flow from operations should not be considered as an alternative to, or more meaningful than, cash flows from operating activities as determined in accordance with IFRS. Questerre's determination of cash flow from operations may not be comparable to that reported by other companies. Questerre considers cash flow from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund operations and support activities related to its major assets.

For the quarter ended September 30, 2013 2012
Net cash from operating activities $ 2,437 $ 3,507
Change in non-cash operating working capital 1,204 (673 )
Cash flows from operations $ 3,641 $ 2,834

The Company considers netbacks a key measure as it demonstrates its profitability relative to current commodity prices. Operating netbacks per boe equal total petroleum and natural gas revenue per boe adjusted for royalties per boe and operating expenses per boe.

The Company also uses the term "working capital surplus". Working capital surplus, as presented, does not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures for other entities. Working capital surplus, as used by the Company, is calculated as current assets less current liabilities excluding the current portions of the share based compensation liability and risk management contracts.

Contact Information

  • Questerre Energy Corporation
    Anela Dido
    Investor Relations
    (403) 777-1185
    (403) 777-1578 (FAX)