Michael Binnion, President and Chief Executive Officer, commented, “With our credit facility renewed in the quarter, we turned our attention to planning for the future. While global demand for oil and gas has rebounded strongly, it is still below pre-COVID-19 levels. In addition, restrictions related to the pandemic are being re-instituted in some places and lifted slower than anticipated in others. As a result, a full recovery in prices will likely be delayed. Though there is a bright spot in North American future gas prices.”
He added, “We are taking the longer view and believe eventually there will be a shortage in supply. Specifically, a shortage of transition fuel supply delivered in a socially responsible way with lower emissions and a smaller environmental footprint. Canada’s new Clean Fuel Standard is an example. This standard will seek to reduce emissions intensity through aggressive targets. It will use a full cycle approach to measuring progress. Our Clean Tech Energy project in Quebec will dramatically reduce full lifecycle emissions and so could benefit from a stronger focus on ESG.”
Commenting on Quebec, he added, “The timing for our Quebec project could be getting better. The economic impacts of the pandemic have highlighted how important low cost and secure energy supply is for the province. We heard this directly from energy consumers from farmers to large industrial users. We also heard from First Nations and local communities who want to be a part of a local development project.”
- Executed final agreement for the credit facilities at $20 million
- Increased representation of Questerre and significant shareholders on Red Leaf Board
- Adjusted funds flow from operations of $1.6 million and average daily production of approximately 1,900 boe/d
Consistent with prior periods, Kakwa continued to account for over three quarters of corporate production. Daily production averaged 1,875 boe/d for the third quarter (2019: 2,343 boe/d) and 2,003 boe/d year to date (2019: 2,108 boe/d). While crude oil prices improved materially over the prior quarter, they remained well below last year on a quarterly and year to date basis. Petroleum and natural gas sales totaled $5.4 million in the quarter up from $3.4 million last quarter but down from $8.7 million last year. Average realized crude and liquids prices were just over $40/bbl in 2020 compared to $60/bbl in 2019. The lower prices contributed to adjusted funds flow from operations of $1.6 million for the quarter (2019: $5.0 million) and $4.3 million year to date (2019: $10.2 million).
The lower prices also contributed to a net loss of $1.0 million for the quarter (2019: $1.3 million profit) and $117.5 million (2019: $1.7 million) for the nine months ended September 30, 2020. The year to date loss reflects the impairment expense of $113 million incurred in the first quarter because of the lower future oil prices. Capital expenditures in the quarter were $0.3 million (2019: $6.7 million) and $3.7 million year to date (2019: $17.2 million).
The term “adjusted funds flow from operations” and “working capital deficit” are non-IFRS measures. Please see the reconciliation elsewhere in this press release.
Questerre is an energy technology and innovation company. It is leveraging its expertise gained through early exposure to low permeability reservoirs to acquire significant high-quality resources. We believe we can successfully transition our energy portfolio. With new clean technologies and innovation to responsibly produce and use energy, we can sustain both human progress and our natural environment.
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
Jason D’Silva, Chief Financial Officer
(403) 777-1185 | (403) 777-1578 (FAX) |Email: email@example.com