CALGARY, ALBERTA--(Marketwired - March 28, 2014) -
THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OF AMERICA TO UNITED STATES NEWSWIRE SERVICES OR UNITED STATES PERSONS
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) reported today on its financial and operating results for the year ended December 31, 2013.
Michael Binnion, President and Chief Executive Officer, commented, "We had a very good year focused on building our new core area in the Montney. Following our discovery well in mid-2012, we aggressively acquired a land position to give us the scale needed for development. We now hold 59 net sections in a condensate-rich fairway that is being proven up by drilling, both by Questerre and others. This drilling has established economic contingent and prospective resources on about one third of this acreage with a best estimate of 32 million boe and 100 million boe respectively. Condensate and other liquids account for half of these volumes."
He added, "Disappointing last year was the control of well incident in Kakwa South. It highlights the risks of operating in the deep basin in Alberta. To mitigate these risks and execute our development plan, we strengthened our management team with a COO and VP Drilling with a proven track record in the Montney. "
He further commented, "We also executed our infrastructure strategy, reducing the capital required for development and guaranteeing market access for our products. We now have take-or-pay contracts for production of over 6,000 boe/d. Our development plan is underway to ramp-up production and meet this target by mid-late 2015."
Reporting on the Company's shale oil projects, he noted, "By mid-late 2015, we expect to see the early results from Red Leaf's first commercial scale capsule that could unlock the potential of oil shale. The work successfully completed in 2013 by the Red Leaf/Total joint venture to finalize the capsule design and secure the necessary regulatory permits allows them to begin construction this summer and fire the capsule within nine months thereafter. The success of this project could materially impact our own oil shale acreage in Wyoming and Pasquia Hills, Saskatchewan. We analyzed our own core data at Pasquia Hills in 2013 with promising results and our goal for this year is to finalize our resource assessment."
The Company reported that on March 25, 2014, it was advised that the National Energy Board issued an order requiring Nova Gas Transmission Ltd. ("NGTL"), a wholly-owned subsidiary of TransCanada PipeLines Ltd., to implement pressure reductions on a limited number of pipeline sections. This will materially reduce transportation of natural gas at 26 receipt points in Alberta, impacting approximately 400 MMcf/d to 500 MMcf/d of production in the province. NGTL has advised that it is working diligently to expedite remedial work on the affected pipeline sections and restore full service as soon as possible. As a result of this order, Questerre's production in the Kakwa-Resthaven area is currently shut-in by 50%. Questerre is awaiting further information from NGTL regarding the length of the disruption to its production.
The Company also reported that it has filed its Annual Information Form ("AIF") and audited consolidated financial statements and related Management's Discussion and Analysis for the year ended December 31, 2013 with the Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval (SEDAR). The AIF includes the disclosure and reports relating to oil and natural gas reserves data and other oil and natural gas information required pursuant to National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101").
The information is also available on the Company's website at www.questerre.com and www.sedar.com. The information has also been filed on the company disclosure system for the Oslo Stock Exchange and can be accessed at www.newsweb.no.
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 estimates of resources, the ramp up of production to meet the target of 6,000 boe/d by mid-late 2015, the timing of the results from Red Leaf's first capsule, the potential for the Red Leaf process to unlock the potential of oil shale, the timing of the construction and firing of the first capsule, the impact of a successful capsule on the Company's acreage in Wyoming and Saskatchewan and the timing of the resource assessment on its Pasquia Hills acreage. 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, including the timing of pricing and terms of the placement, the placement results and closing, the use of net proceeds, the timing of receipt of required regulatory approvals and assumptions concerning the success of future drilling activities. 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 statements. 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 www.sedar.com. 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.
Please refer to the 'Kakwa-Resthaven, west central Alberta' subsection of "Oil and Gas Properties" in the Company's Annual Information Form dated March 27, 2014 for further information relating to the resource assessment.
This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of US persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
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.