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CALGARY, Aug. 11, 2016 /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, 2016.
Michael Binnion, President and
Chief Executive Officer, commented, "We stuck to our plan of
restricting significant capital spending to sustain producing
reserves and liquidity. We participated in two out of six new
drills on our joint venture acreage at Kakwa this year. Well costs
continue to average approximately 15% lower than last year when
adjusted for horizontal length. We also saw a positive test from an
upper Montney interval. These
results will likely benefit future drilling and we plan to
participate in two more wells this year."
Highlights
- Quebec Government introduces draft hydrocarbon legislation
- Evaluation of retorting technologies continues for Jordan oil shale project
- Credit facilities renewed at $30
million
- Average daily production of 1,422 boe/d with cash flow from
operations of $1.92 million for the
quarter
He added, "Following the energy policy released in April, the
Government of Quebec introduced a
new oil and gas law this June as planned. This is another major
step forward. Parliamentary hearings on Bill 106, the proposed law,
are scheduled to start this summer. We are hoping this law is
passed in the fall and sets up the introduction of the related
regulation next spring."
Commenting on the Company's oil shale assets in Jordan he further noted, "We are also making a
small upfront investment in Jordan
to see how this oil shale acreage can be developed and at what oil
price. We are getting an independent assessment to confirm our view
on this prospective resource."
The Company reported that production from the Kakwa-Resthaven
area averaged 1,081 boe/d (2015: 1,159 boe/d) for the period and
contributed to daily production of 1,422 boe/d during the second
quarter of 2016 (2015: 1,480 boe/d). Gross revenue in the quarter
of $4.42 million reflected the
materially lower commodity prices in 2016 (2015: $6.05 million). Lower general and administrative
expenses and realized gains on hedged volumes contributed to cash
flow from operations of $1.92 million
in the quarter (2015: $3.07 million).
The Company reported a net loss of $2.17
million for the quarter compared to net income of
$1.33 million for the same period in
2015.
Capital investment for the first six months declined by just
over 60% from $13.30 million last
year to $4.90 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 $8 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 belief that the results from 2016 will
benefit future drilling in the Kakwa Resthaven area, the Company's
participation in two more wells in this area in 2016, the Company's
hope that the new hydrocarbon legislation in Quebec is passed the fall and the related
regulation is introduced in the spring, the Company's plans to
conduct an independent assessment of its acreage in Jordan and the anticipation that incremental
capital investment in the Kakwa-Resthaven area could be up to
$8 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 June
30,
|
2016
|
2015
|
($
thousands)
|
|
|
Net cash from operating
activities
|
730
|
1,593
|
Interest paid
(received)
|
207
|
(2)
|
Net change in non-cash operating working
capital
|
(979)
|
1,476
|
Cash flows from
operations
|
1,916
|
3,067
|
Working capital surplus (deficit) is a non-GAAP measure
calculated as current assets less current liabilities excluding
risk management contracts.
SOURCE Questerre Energy Corporation