CALGARY, ALBERTA–(Marketwired – Jan. 2, 2015) – Questerre Energy Corporation (“Questerre” or the “Company”) (TSX:QEC)(OSLO:QEC) reported today on its preliminary plans for 2015.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, “Our goals for this year are to maintain a strong balance sheet and finance our capital program primarily with cash flow and, to a lesser extent, our credit facilities. In 2015, we expect to generate positive cash flow from operations based on a WTI price of US$58/bbl and AECO prices of C$3.00/GJ.”
Questerre also reported that its credit facilities with a Canadian chartered bank have been renewed for $50 million. This follows the interim review completed in the fourth quarter. The credit facilities include a revolving operating demand loan and a non-revolving acquisition/development demand loan. Any borrowings under the facilities, with the exception of letters of credit, bear interest at the bank’s prime interest rate and applicable basis point margins based on the ratio of debt to cash flow measured quarterly. The Company intends to maintain this ratio at between 1.0 and 2.0. The bank’s current prime rate is 3% per annum. The facility is secured by a revolving credit agreement, a debenture with a first floating charge over all assets of the Company and a general assignment of books debts.
He added, “In light of the current commodity price environment, we are adopting a conservative approach to our capital program. We are evaluating the proposed program both for our operated and non-operated Montney acreage and expect to provide further details early this year. While the economics of our Montney play are still viable at today’s prices, the lower prices are translating into materially longer payout periods which is particularly challenging with our current capital resources. As a result, we intend to defer the completion of our 06-29 Well (formerly the 14-29 Well) at Kakwa North and the spud of our next well on this seven section block until prices improve. We also plan to postpone our next well at Kakwa South.”
Commenting on the Company’s joint venture acreage, he further added, “Our plans include participating in the completion of the four new wells that have been drilled in the fourth quarter of last year and the tie-in of two additional wells drilled and completed. The operator recently announced they are reviewing their capital program for 2015 and we anticipate a reduction here as well.”
The Company has recently entered into agreements with industry operators, including the operator of its joint venture acreage, to assign on a combination of permanent and temporary basis over 75% of its interest in the infrastructure agreements for the processing, transportation and fractionation of its natural gas and natural gas liquids in the Kakwa-Resthaven area. The agreements are subject to receipt of all requisite approvals and formal documentation.
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.
This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of US persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
Questerre Energy Corporation
(403) 777-1578 (FAX)