QEC - Second quarter results driven by Kakwa production


CALGARY, Aug. 13, 2015 /CNW/ - Questerre Energy Corporation ("Questerre" or the "Company") (TSX,OSE:QEC) reported today on its financial and operating results for the quarter ended June 30, 2015.

Michael Binnion, President and Chief Executive Officer, commented, "The development of our Kakwa joint venture acreage underpinned our positive results in the second quarter. With the expansion of the central facility and gathering system complete, new wells were brought on production. These included two extended-reach horizontal wells with laterals of approximately 2400m. The initial results from these wells are promising and led us to participate in the drilling of the next well that spud early in the third quarter. We plan to participate in up to two more wells this year based on further results and prices."


  • Development continues on Kakwa joint venture acreage with commissioning of expanded central facility, tie-in of two extended-reach horizontal wells and additional completions
  • Oil shale portfolio rationalized with new Memorandum of Understanding for acreage in Jordan and agreement terminated for acreage in Wyoming
  • Average daily production of 1,480 boe/d with an exit rate of 1,800 boe/d and cash flow from operations of$3.1 million for the quarter

Commenting on its oil shale assets, Mr. Binnion added, "We high graded our oil shale portfolio in the quarter. Our Wyoming project was relinquished in light of the expected two year delay on the capsule construction by Red Leaf and its partner, Total. We signed an MOU for an oil shale project in the Kingdom of Jordan and have begun work to assess an area covering over 380 square kilometres."

The Company reported that production from the Kakwa-Resthaven area contributed 1,088 boe/d, or almost three quarters of corporate production in the second quarter of 2015. Corporate production averaged 1,480 boe/d in the quarter (2014: 849 boe/d) and 1,369 boe/d for the first six months of 2015 (2014: 991 boe/d). Despite significantly lower oil prices this year, increased condensate and oil, which accounted for almost 60% of total volumes, contributed to cash flow from operations of $3.1 million for the quarter (2014:$3.0 million). The average sales price for all products was $44.90/boe (2014: $82.08/boe). The Company reported net income of $1.43 million for the quarter (2014: $0.52 million) and net income of $0.88 million for the first six months of 2015 (2014: $1.70 million).

Capital investment in the quarter was approximately $5.1 million (2014: $11.25 million). Consistent with the prior quarter, over 90% of the capital was directed to the Montney. The Company anticipates it will incur an incremental $8.5 million on these assets over the remainder of this year.

The Company also reported on the initial production from the 01-14-63-6W6M well (the "01-14 Well") for the month of July. Gross field production from the 01-14 Well averaged 2.56 MMcf/d of gas and 608 bbls/d of condensate (1,034 boe/d). Although the initial rates from this well are encouraging, these results are not necessarily indicative of long-term performance or ultimate recovery. Questerre has a 25% working interest in the 01-14 Well.

The term "cash flow from operations" is a non-IFRS measure. Please see the reconciliation elsewhere in this press release.

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.

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 promising results from the extended-reach horizontals wells on the Company's Kakwa joint venture acreage, the Company's participation in future wells and the anticipation the Company will incur an incremental $8.5 million in capital expenditures over the remainder of 2015. 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 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.

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.

This press release contains the terms "cash flow from operations" which is a non-IFRS term. 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 June 30,

($ thousands)





Cash flows from operations

$ 3,059

$ 3,009

Change in non-cash operating working capital



Net cash from operating activities

$ 1,593

$ 3,397


SOURCE Questerre Energy Corporation

Image with caption: "Questerre Energy Corporation (CNW Group/Questerre Energy Corporation)". Image available at: http://photos.newswire.ca/images/download/20150813_C7801_PHOTO_EN_477799.jpg

For further information: Questerre Energy Corporation, Anela Bigornia, Investor Relations, (403) 777-1185, (403) 777-1578 (FAX), Email: info@questerre.com


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