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CALGARY, May 12, 2016 /CNW/ - Questerre Energy
Corporation ("Questerre" or the "Company") (TSX,OSE:QEC) reported
today on its financial and operating results for the quarter ended
March 31, 2016.
Michael Binnion, President and
Chief Executive Officer, commented, "We continue to manage our
reduced capital program with the goal of maintaining reserves and
preserving our liquidity. During the first quarter, we participated
in drilling two (0.5 net) wells on our Kakwa joint venture acreage.
All in costs, on a per metre of horizontal drilled basis, are
approximately 20% lower than last year, improving our returns in
the current environment. We plan only to selectively participate in
future wells depending on commodity prices and liquidity."
Highlights
- Participated in two (0.5 net) one and a half mile horizontal
wells at Kakwa-Resthaven
- Quebec Government publishes new energy policy supporting
exploitation of local oil and gas
- Commenced evaluation of retorting technologies for Jordan oil shale project
- Average daily production of 1,538 boe/d with cash flow from
operations of $1.74 million for the
quarter
Commenting on developments in Quebec, he noted, "Just after the quarter end,
the Government of Quebec published
their new energy policy. Later than anticipated, but as we
expected, it allows for the exploitation of local oil and gas in
the province. This is a major step forward for our gas discovery.
It lays the groundwork for the new hydrocarbon legislation which
should be released before this summer."
Updating developments on its oil shale assets, he further added,
"We also invested very limited capital to appraise our oil shale
project in Jordan which could have
the right scale and rock properties. While Red Leaf re-engineers
their capsule design to be economic at US$55-$60/bbl, we are testing our shale under two
commercial retorting processes."
The Company reported that production from the Kakwa-Resthaven
area averaged 1,159 boe/d (2015: 819 boe/d) and contributed to
daily production of 1,538 boe/d for the Company during the first
quarter of 2016 (2015: 1,257 boe/d). The decline in commodity
prices in the quarter was mainly offset by the increased production
volumes resulting in gross revenue declining just over 2% to
$4.03 million. Lower general and
administrative expenses and realized gains on hedged volumes
contributed to cash flow from operations of $1.74 million in the quarter (2015: $1.26 million). The Company reported a net loss
of $0.33 million for the quarter
compared to a loss of $0.66 million
for the prior year.
Capital investment declined by just under 50% from $8.2 million last year to $4.2 million in 2016. Consistent with prior
quarters, over 80% of this amount was for the Kakwa-Resthaven area.
The Company anticipates incremental investment in this area in 2016
could be up to $7 million.
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. It is pursuing
oil shale projects with the aim of commercially developing these
massive resources.
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.
Advisory Regarding Forward-Looking Statements
This media release contains certain statements which constitute
forward-looking statements or information ("forward-looking
statements") including the selective participation in future wells
in the Kakwa-Resthaven area, the belief that the new energy policy
in Quebec is a major step forward
for the Company's gas discovery, the anticipated release of the new
hydrocarbon legislation before this summer, the belief that the
Company's project in Jordan could
have the right scale and rock and the anticipation that incremental
capital investment in the Kakwa-Resthaven area could be up to
$7 million.
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.
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" and "working capital deficit" which are non-GAAP 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 GAAP. 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 three
months ended March 31,
|
2016
|
2015
|
($
thousands)
|
|
|
Net cash from
operating activities
|
1,699
|
2,220
|
Interest paid
(received)
|
147
|
(5)
|
Net change in
non-cash operating working capital
|
(106)
|
(953)
|
Cash flows from
operations
|
1,740
|
1,262
|
Working capital surplus (deficit) is a non-GAAP measure
calculated as current assets less current liabilities excluding
risk management contracts.
SOURCE Questerre Energy Corporation