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.