Questerre Energy Corporation

Questerre Energy Corporation

August 21, 2007 02:00 ET

Questerre Updates Beaver River Activities

CALGARY, ALBERTA--(Marketwire - Aug. 21, 2007) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) reported today on recent developments at the Beaver River Field in British Columbia (the "Field").

The first phase of an independent report on the Mattson horizon is ongoing and confirms the likelihood that the thick shale section at the Field contains significant gas in place, possibly 50% higher than previously stated. It is currently estimated at 495 Bcf-750 Bcf per section with a 1,000m net reservoir thickness. We are pleased to have the Mattson independently confirmed as a very significant natural gas resource.

The report also identifies a number of unique aspects to the Mattson play and recommends that initial development of the play should focus on areas where there are sand intervals and open fracture systems present. The A-2 well, which from a 50m thick interval has gross estimated recoverable reserves of 4.4 Bcf and an initial stabilized flow rate of 4.2 mmcf/d (700 boe/d), is an example that meets these criteria. The completion and stimulation designs are also expected to be critical to the development of this play.

Completion and stimulations operations were recently completed on the A-7 and B-3 wells. Two nitrogen-based fracture stimulations, three CO2-based fracture stimulations and one slick-water fracture stimulation were evaluated. The slick-water stimulation on the lower Mattson section in the A-7 well performed best with initial flow rates of over 1.8 mmcf/d (300 boe/d) and the two nitrogen-based stimulations performed worst with no commercial flows of gas. The initial flow rates on the three CO2-based stimulations ranged from 100 mcf/d (16.5 boe/d) to 1.8 mmcf/d (300 boe/d). Further work is required to determine to what extent the stimulation design verses the nature of the interval stimulated influences the ultimate flow rates.

Based on the preliminary results from the A-7 well, no further testing is required to confirm commerciality. Operations will commence to complete the pipeline tie-in and put this well on production and determine stabilized flow rates and long-term productivity by testing into the pipeline. While the A-7 well had significant drilling problems and only the upper portion of the Mattson was successfully cased, it appears that this well is drilled in to an area with open fracture systems and meets the criteria identified in the independent report.

Based on the preliminary results from the B-3 well it appears that this well has been drilled into a fault block that does not have open fracture systems. An extended production test will be carried out to establish what the long-term productivity of this well will be. This well bore was designed for a multi-lateral completion and can be re-entered and drilled to the neighboring fault block where there was a 12 mmcf/d (2,000 boe/d) drill stem test by Amoco in the 1960s. Questerre and Transeuro Energy Corp. ("Transeuro") plan to evaluate this opportunity for the winter drilling season.

Michael Binnion, President and Chief Executive Officer of Questerre, commented, "We are very pleased to have completed the first phase of development on the Mattson discovery. We have gathered a lot of data and have a large range of results in various intervals. We have established the commerciality of this play and also where our focus areas should be for future development."

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.

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.

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