CALGARY, Alberta, Aug. 09, 2018 (GLOBE NEWSWIRE) — Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) reported today on its financial and operating results for the second quarter ended June 30, 2018.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, “We were blindsided by the Quebec government’s decision to attempt to ban hydraulic fracturing. We recently filed a brief with the government strongly objecting to this decision. Specifically we have made the case that the proposed regulations are neither well drafted nor legally in the power of the government. We have requested a meaningful consultation to resolve these material issues prior to finalizing the regulations.”
He added, “This overshadowed an otherwise strong second quarter for us. The increased investment in Kakwa saw us almost double our production volumes to just over 2,000 boe/d with adjusted funds flow from operations of $6.01 million for the quarter. As noted last quarter, with drilling scheduled to ramp up in the fourth quarter, our production will decline over the second half before growing in the new year. By this time, we should also have the results from the wells on our offsetting acreage at Kakwa North.”
• Average daily production of 2,016 boe/d for the quarter with adjusted funds flow from operations of $6.01 million
• Government of Quebec introduces draft regulations intended to prohibit hydraulic fracturing of the Quebec Utica
• Executes letter of intent to consolidate ownership of Quebec assets
• Finalizes feasibility study for Jordan oil shale project
Commenting on its oil shale project in Jordan, he added, “We were pleased with the results of the Hatch feasibility study. Preliminary estimates of combined capital and operating costs for the first phase are approximately US$38-40/bbl. Costs include upgrading the produced oil to diesel and gasoline which realize a US$10-12/bbl premium to Brent. This makes it competitive with similar large-scale energy projects. We expect the next round of engineering will tighten the error bars on these estimates from +100/-50% to +30/-20%. We are also looking at ways to optimize these costs and overall recoveries to further improve the economics for this multi billion-barrel deposit.”
Consistent with the prior quarter, the Company reported higher production volumes over the same period last year. Production averaged 2,016 boe/d for the quarter up from 1,037 boe/d in the second quarter of 2017 and relatively unchanged from the first quarter volumes of 2,013 boe/d. Kakwa accounted for over 75% of production during these periods. Gross revenue more than doubled to $10.07 million with higher production volumes benefitting from higher oil prices in the period. The higher revenue contributed to adjusted funds flow from operations of $6.01 million for the quarter (2017: $0.88 million) and $10.66 million for the first half of 2018 (2017: $2.29 million). The Company reported net income of $0.60 million for the current quarter (2017: loss of $3.62 million) and $0.63 million for the year to date (2017: loss of $4.14 million).
Capital investment for the quarter focused almost exclusively on Kakwa and totaled $7.45 million (2017: $2.54 million) and for the first half of 2018 was $16.12 million (2017: $7.86 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.