Questerre Energy 2014 First Quarter Financial Report
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Montney drilling to accelerate in second half of 2014
Calgary, Alberta -- Questerre Energy Corporation
("Questerre" or the "Company") (TSX,OSE:QEC) reported
today on its financial and operating results for the
quarter ended March 31, 2014.
Michael Binnion, President and Chief Executive
Officer, commented, "In the quarter we began executing
the Montney development plan to achieve our production
target of 6,000 boe/d by the second half of 2015. Our
first 100% well was spud in the quarter. It will be
completed after breakup to prove up the condensate
rates on our 10-section block in Kakwa South. At the
same time, our next 100% well will spud on the 7-
section block in Kakwa North, adjacent to our joint
venture acreage. We plan to drill up to three more
wells on these two blocks in 2014."
He added, "Two wells were also drilled this quarter on
our joint venture block with encouraging results. The
first tested the upper Montney interval with
condensate rates of over 200 bbls/MMcf. The second
well, with a lateral of approximately one and a half
miles, was drilled in 35 days, or about the same time
it takes to drill a well with a one mile lateral. The
joint venture intends to drill up to five additional
wells this year."
Commenting on the Company's financial performance, he
noted, "This activity is starting to show results with
us achieving record cash flow of $5.5 million in the
quarter. The second quarter will reflect a pause for
spring breakup with growth in production continuing in
the second half of this year."
Highlights
· Spud 100% working interest Montney well at
Kakwa South
· Commissioned joint venture central facility at
Kakwa with capacity for 15 MMcf/d of natural gas and
3,000 bbls/d of condensate
· First upper Montney well tests at gross rates
of 1,076 boe/d with 227 bbls/MMcf of condensate
· cash flow from operations of $5.5 million and
average daily production of 1,133 boe/d for the
quarter
Updating developments on its oil shale assets, he
further added, "Over the remainder of 2014, we should
see a similar ramp-up in activity with the Red
Leaf/Total joint venture for the EcoShale process. The
final construction permit should be issued in the
second quarter and work scheduled to start in the
field this summer to construct the mine and the first
large-scale capsule. We are also working with Red Leaf
to appraise our own oil shale acreage at Pasquia
Hills. They are currently testing our shale to
determine the Yield and quality of oil under the
EcoShale process."
The commissioning of the new joint venture facilities
at Kakwa contributed to production in the first
quarter of 2014 averaging 1,133 boe/d as compared to
841 boe/d in the prior quarter and 1,000 boe/d in the
first quarter of 2013. Oil and liquids continued to
represent almost three quarters of production volumes
and resulted in cash flow from operations of $5.54
million (2013: $3.65 million). The Company expects
that production in the second quarter will be lower
due to the recent shut-in at Antler for road bans
during spring break-up. Additionally, lower volumes
from Kakwa are expected due to a scheduled turnaround
at the third party processing facility this June.
Capital expenditures during the first quarter of 2014
were $12.36 million. Over 90% of the capital was
directed to the Montney development, drilling the
Company's 100% operated well and participating in the
drilling and completion of three (0.75 net) wells on
the joint venture acreage. As at March 31, 2014, the
Company reported a working capital surplus of $25.17
million and had no amounts drawn on its existing
credit facility.
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. In conjunction with a supermajor, it is at the
leading edge of commercializing a proven process to
unlock the massive resource potential of oil shale.
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.
For further information, please contact:
Questerre Energy Corporation
Anela Dido, Investor Relations
(403) 777-1185 ' (403) 777-1578 (FAX) 'Email:
[email protected]
