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DISTRIBUTION IN THE UNITED STATES OF
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CALGARY, May 11, 2017 /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, 2017.
Michael Binnion, President and
Chief Executive Officer of Questerre, commented, "We had a good
start to the year with progress on all our major assets in the
quarter. At Kakwa we have now drilled four of the eight wells
planned on our joint venture acreage, including one well that spud
last December. Two of these have been completed with sand tonnage
25% higher than the average tonnage used last year. Based on
results to date, this should incrementally improve well
performance. After breakup, the remaining two wells will be
completed and drilling will resume. We are also investing in
expanding infrastructure including gas lift and central
facilities."
Highlights
- Participated in three (0.67 net) horizontal wells at Kakwa
- Quebec Government ratifies new environmental legislation
- Evaluation of retorting technologies for Jordan oil shale project continues
- Completed equity placements for gross proceeds of $24.65 million
- Average daily production of 1,123 boe/d with 580 boe/d behind
pipe and adjusted funds flow from operations of $1.41 million for the quarter(1)
(1)
|
Behind pipe volumes
based on production estimated under proved undeveloped reserve
category for wells drilled and completed as forecasted by
independent reserve evaluator at December 31, 2016
|
Commenting on Quebec, he noted,
"Our updated resource assessment confirmed the Lowlands could be
among the lowest cost suppliers of natural gas to the province.
While we wait for the hydrocarbon regulations, we are working on
social acceptability. Part of this work is developing a 'path to
zero emissions natural gas production.' Early feedback for this
plan has been positive."
Updating developments on its oil shale assets, he further added,
"We are making headway with the engineering for our oil shale
project in Jordan by looking at
multiple retorting technologies, including Red Leaf's EcoShale
technology. Early in the second quarter, we entered into agreements
to acquire about 25% of the common share capital of Red Leaf which
currently holds about US$100 million
in cash and no debt."
Due to limited participation in new drilling at Kakwa last year,
the Company reported that production from the Kakwa area declined
over the prior year to average 844 boe/d (2016: 1,159 boe/d) and
contributed to daily production of 1,123 boe/d for the Company
during the first quarter of 2017 (2016: 1,538 boe/d). The increase
in commodity prices in the quarter offset these lower production
volumes resulting in gross revenue increasing by 10% to
$4.43 million. Higher operating costs
and lower realized gains on hedging contributed to adjusted funds
flow from operations of $1.41 million
in the quarter (2016: $1.74 million).
The Company reported a net loss of $0.52
million for the quarter compared to a loss of $0.33 million for the first quarter last
year.
Capital investment in the quarter increased to $5.32 million from $4.16
million in 2016. Consistent with prior quarters, over 80% of
this amount was for the Kakwa area. The Company anticipates
incremental investment in this area in 2017 could be up to
$17 million.
The term "adjusted funds 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 Company's belief that well performance
at Kakwa should incrementally improve based on higher sand tonnage
used in the completion operations, the timing of future completion
and drilling activities at Kakwa, the Company's planned investment
in expanding infrastructure, the Company's belief that the Lowlands
could be among the lowest cost supplier of natural gas to
Quebec, the Company's plan to
develop a path to zero emission natural gas production and the
Company's anticipation that incremental investment in the Kakwa
area for 2017 could be up to $17
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 "adjusted funds 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, adjusted funds 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
adjusted funds flow from operations may not be comparable to that
reported by other companies. Questerre considers adjusted funds
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.
|
Three months ended
March 31,
|
($
thousands)
|
2017
|
2016
|
|
|
|
Net cash from
operating activities
|
$1,247
|
$1,699
|
|
|
|
Interest
paid
|
183
|
147
|
|
|
|
Change in non-cash
operating working capital
|
(19)
|
(106)
|
|
|
|
Adjusted Funds Flow
from Operations
|
$1,411
|
$1,740
|
Working capital surplus (deficit) is a non-GAAP measure
calculated as current assets less current liabilities excluding
risk management contracts.
SOURCE Questerre Energy Corporation