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CALGARY, Nov. 10, 2016 /CNW/ - Questerre Energy
Corporation ("Questerre" or the "Company") (TSX,OSE:QEC) reported
today on its financial and operating results for the quarter ended
September 30, 2016.
Michael Binnion, President and
Chief Executive Officer, commented, "We made measurable progress on
all our assets this quarter. At Kakwa, enhanced well completions
are delivering promising results. The average production over the
first 90 days for 2016 wells, including those we did not
participate in, is approximately 25% higher than the 90 day average
for 2015 wells. We are investing in additional infrastructure to
reduce costs and improve returns on future wells. We also
strengthened our financial liquidity, raising approximately
$12 million through two equity
placements in July and early November."
Highlights
- Quebec Government approves new hydrocarbon legislation in
principle
- Finalized resource assessment for Jordan oil shale acreage
- Completed equity placement for gross proceeds of $4.75 million
- Average daily production of 1,275 boe/d with cash flow from
operations of $1.45 million for the
quarter
He added, "The new hydrocarbon legislation introduced in June
was approved in principle by the Quebec government. This is another important
milestone. The law is now being studied in detail and we expect it
will be approved before year-end. It will lay the groundwork for
the new regulations that we should see next spring."
Commenting on the Company's oil shale assets in Jordan he further noted, "We finalized an
independent resource assessment of our oil shale acreage in
Jordan. It indicates a significant
resource of discovered petroleum initially in place. Although this
project is still in its infancy, it validates the investment we
have made over the last two years."
The Company reported daily production that averaged 1,275 boe/d
in the third quarter of 2016 (2015: 1,934 boe/d) with Kakwa
accounting for nearly 75% of these volumes (2015: 80%). In 2016,
only one (0.25 net) new well on its joint venture acreage at Kakwa
was brought on production in the quarter compared to four (1.0 net)
new wells in third quarter of 2016. On a year to date basis,
production declined by under 10% to 1,411 boe/d in 2016 from 1,559
boe/d last year.
Lower production volumes and commodity prices in 2016 resulted
in cash flow from operations of $1.45
million for the quarter (2015: $3.18
million). The Company reported a net loss of $1.01 million for the third quarter of 2016
(2015: $18.17 million loss) and a net
loss of $3.51 million for the nine
months ended September 30, 2016
(2015: $17.49 million).
Consistent with prior periods, for the nine months ended
September 30, 2016, Questerre
invested $8.96 million in its assets
(2015: $19.51 million) with over 80%
in Kakwa (2015: 90%) and 10% in Jordan (2015: $2%). The Company intends to
invest up to an additional $3 million
over the remainder of this year.
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 Company's view that it made measurable
progress on all its assets, that enhanced well completions are
delivering promising results, that investments in additional
infrastructure will reduce costs and improve returns on future
wells at Kakwa, the expectation that the new hydrocarbon
legislation in Quebec will be
approved before year-end, the expectation that new regulations in
Quebec will be introduced next
spring, the Company's belief that its investment in Jordan is validated by the resource
assessment, and the anticipation that incremental capital
investment in 2016 could be up to $3
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 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 September 30,
|
2016
|
2015
|
($
thousands)
|
|
|
Net cash from
operating activities
|
$
|
1,591
|
$
|
3,362
|
Interest
paid
|
231
|
100
|
Net change in
non-cash operating working capital
|
(375)
|
(280)
|
Cash flows from
operations
|
$
|
1,447
|
$
|
3,182
|
Working capital surplus (deficit) is a non-GAAP measure
calculated as current assets less current liabilities excluding
risk management contracts.
SOURCE Questerre Energy Corporation