Questerre develops new core area in 2012 and increases reserves
Wednesday, Feb 27, 2013Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) reported today on its preliminary financial and operating results for the year ended December 31, 2012.
Michael Binnion, President and Chief Executive Officer, commented, "We refocused the company in 2012 adding two new projects we believe will create significant value. Our discovery well in the Kakwa-Resthaven area of Alberta for liquids-rich natural gas created a new core area that has the same scale of resource potential as our Utica shale discovery in Quebec. Following our successful wells in 2012, we made a major investment in this area this year and we now hold a total of 45 net sections. The increase in our proved and probable reserves at year-end reflects our early success on this large-scale project."
Mr. Binnion added, "In keeping with our strategy of capturing large-scale resources, we also made a significant investment in oil shale. We partnered with Total S.A. and Red Leaf Resources to scale up the proven EcoShale process that will unlock this major resource. Initial field work is underway."
He commented, "Our business plan going forward is to focus on the condensate-rich Montney. This project can be large-scale while adding incremental production and reserves in the short term. Our Utica discovery in Quebec and our oil shale assets offer big-scale upsides in the future. In the meantime, we are moving forward with our conventional assets in Antler which provides a base of production with an enhanced recovery upside. We invested almost $17 million in Antler in 2012, drilling several infills into our oil pool as part of a waterflood. While exploring for another Antler oil pool in Wawota, Saskatchewan was unsuccessful, our discovery in Kakwa exceeded our expectations. As a result of this discovery, on a proved and probable basis, we increased our light oil and natural gas liquids reserves from 2.38 million to 4.78 million barrels and our natural gas reserves to 11.6 Bcf or 1.94 million boe."
For the year ended December 31, 2012, the Company reported cash flow from operations of $10.24 million as compared to $10.06 million for the prior year. Although oil and natural gas liquids volumes increased by 18% over the prior year, the impact on cash flow was mitigated by lower realized prices. Questerre's production averaged 678 boe/d (2011: 646 boe/d) with oil and liquids accounting for 86% (2011: 76%) of the product mix. As at December 31, 2012, the Company reported a working capital surplus of $33.22 million (2010: $104.48 million).
The Company also reported on the evaluation of its proved and probable reserves as at December 31, 2012. The report was prepared in accordance with the COGE Handbook by McDaniel & Associates with an effective date of December 31, 2012.
In accordance with the requirements of National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators, the Company anticipates filing its Annual Information Form that includes more detailed disclosure and reports relating to petroleum and natural gas activities for the 2012 fiscal year at the end of March 2013.
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