Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — Shareholder Meeting (June 2013)
33 slides from Questerre Energy Corporation Class A's shareholder meeting presentation, Jun 11, 2013
Slide 1: Corporate Presentation – Annual and Special Meeting of Shareholders
Corporate Presentation Annual and Special Meeting of Shareholders June 11, 2013
Slide 2: Presentation outline
Presentation outline • Company Strategy & Overview • Light Oil Bakken/Torquay, Antler, Saskatchewan • Liquids-Rich Montney, Kakwa-Resthaven, Alberta • Oil Shale • St. Lawrence Lowlands, Quebec • Outlook • Investment Summary 2
Slide 3: Company strategy
Company strategy • Leverage extensive tight rock/shale rock expertise to acquire tight resources early and develop reserves First mover in shale gas –acquired acreage in Quebec almost 5 years ahead of industry Invited speakers at domestic and international conferences and authors of technical papers
Slide 4: Company overview
Company overview • Near-term production enhancement Bakken/Torquay light oil pool in Saskatchewan with focus on secondary recovery – potential to add 1.5-2.0 million barrels net to Questerre • Medium-term reserves and resource exploitation Bringing new core area on production following drilling succ
Slide 5: Asset overview
Asset overview • Southeast Saskatchewan – Proven Bakken/Torquay tight oil production with strong netbacks • Western Alberta – Liquids-rich Montney natural gas resource play with exceptional economics • Utah & Wyoming – Oil shale commercialization project in Utah with Total S.A. and Red Leaf – Early
Slide 6: Financial overview
Financial overview Operating and Financial Results For the 3 months ended March 31, 2013 Working capital surplus($) 12.8 million Debt Nil Cash Flow from operations ($) 3.65 million Production (boe/d) 1,000 Oil weighting 78% Revenue ($/boe) 71.57 Operating Netback ($/boe) 49.66 All financial amounts
Slide 7: Bakken/Torquay Light Oil Antler, Saskatchewan
Bakken/Torquay Light Oil Antler, Saskatchewan 7
Slide 8: Antler
Antler • Established tight oil asset Exploration Area targeting Bakken/Torquay resource play • High value reserves NPV-10/bbl of $38.27/bbl based on 2P reserves of 1.9 million barrels and $75.3 million NPV-10 as at December 31, 2012 2012 YTD netbacks of ~$68/bbl based on $89/bbl realized oil prices
Slide 9: Waterflood
Waterflood • Secondary recovery scheme has been MAIN successfully applied in adjacent POOL Bakken/Torquay pool in Manitoba with a projected increase in recovery from 9% to between 16% - 24% ̶ Low energy reservoir (very limited gas/water drive) at Antler makes it an ideal candidate for waterflood Ong
Slide 10: Liquids-rich Montney, Alberta
Liquids-rich Montney, Alberta 10
Slide 11: Liquids-rich Montney
Liquids-rich Montney • 2,500 boe/d discovery well creates new core area for Questerre in west central Alberta • Montney play is approximately 500 km long and 90 km wide One of the largest oil and gas fields in world Gas, oil and liquids-rich windows similar to Eagleford shale in Texas Development ha
Slide 12: Liquids-rich Montney
Liquids-rich Montney • Questerre has built a significant land position in the sweet spot of the play fairway with high liquids rates ̶ Acquired ~59 gross sections with 76% working interest (45 net sections) • Good tenure - new licenses must be drilled within four years and are then held thereafter b
Slide 13: Proven Development Area
Proven Development Area • High liquids rates from tested wells confirm acreage is in the sweet spot of the play First well tested at over 2,500 boe/d (138 Bbls/MMcf of condensate) currently on production subject to facility constraints • QEC 37.5% interest BPO, 25% APO Second well tested at 1,800 bo
Slide 14: Area Activity
Area Activity Test results based on published company data 14
Slide 15: Industry Activity
Industry Activity Paramount Musreau/Resthaven Montney Lands By Pat Roche 9 wince 2338 Gee Coed Ts vane fe ARE DRE Cone aver aT hE Cond 44 nicht Jiaze Beas Cord = = Trilogy Energy Corp. Paramount Expanding Capacity To Handle Three Times Current Company Output | Paramount Expanding Capacity To Handle
Slide 16: Industry Activity
Industry Activity Resthaven - Montney Shallow-cut Gas Plan’ Average Liquids @ 60 bblsimmef (75% C5+) [Range is 40 (Jayar) to 60 (Kakwa) bbis/mmef]| Deep-cut Gas Plant Liquids @ 77 bbisimmef (55% C5#; 0% C2) Liquids @ 105 bbis/mmof (37% C5+; 29% C2) \ > Jayarll Octeter 17,2012 riers ExxonMobil Buying
Slide 17: Industry Activity
Industry Activity Compelling Economics Now . with line-of-sight to exceptional Original Typecurve Early Pilot Wells, Long Tie-ina 2013-14 Dev Wells Full-fleld Develey The Olin Alles Mth Balen ia nen sank ta Pyint or Rigel - Click Oo OC: MuViata Energy La. dona Pastisues 95 Million Equity Financing 6
Slide 18: Well results
Well results • Independent assessment of reserves assigns 1.2 MMboe per well ̶ 30-40% + condensate and liquids • Economics driven by high liquids rates, particularly condensate Capital costs of $11 million NPV-10% of $12 million with IRR of 60%+ Crown royalty incentives further enhance economics Typ
Slide 19: Growth potential
Growth potential • Questerre is currently targeting one of up to three prospective intervals in the Upper Montney • All three intervals have been reported by industry as productive in the surrounding area • Further potential exists in the Lower Montney zone that is productive across the trend • Curr
Slide 20: Oil Shale
Oil Shale 20
Slide 21: Oil shale
Oil shale • Major resource on cusp of commercial development – Estimated 2.8-3.1 trillion barrels in place worldwide with 2.1 trillion located in the United States • Questerre has an indirect interest in a US$400 million joint venture with Total S.A. and Red Leaf Resources, a private company, to unl
Slide 22: EcoShale - In-situ capsule process
EcoShale - In-situ capsule process • Innovative approach that moves the process to the rocks instead of moving the rocks to the process – Incorporates benefits and avoids challenges of both surface and subsurface processes • Dramatically improves economics – Modeling indicates economics are better t
Slide 23: Scaling from pilot to commercial by 2014
Scaling from pilot to commercial by 2014 • Questerre prefunded its share of capital program through equity investment in Red Leaf • Red Leaf and Total to invest US$400 million to commercialize EcoShale Process in two phases Total to fund 80% of these costs for both phases • Targeting first large sca
Slide 24: Questerre projects
Questerre projects Pasquia Hills, Saskatchewan • 100% interest in ~39,000 high-graded acres at Pasquia Hills with potential for oil shale resource of over several hundred million barrels • Drilled 16 wells in 2012 – Approximately 30-45 m of good quality shale encountered in all wells drilled – 10-20
Slide 25: St. Lawrence Lowlands, Quebec
St. Lawrence Lowlands, Quebec 25
Slide 26: Where Questerre is currently
Where Questerre is currently High rate, high pressure gas wells • 18 Tcf prospective recoverable resource on acreage – 4.4 Tcf net to Questerre • Premium gas market • Tenure recently extended to 2021 • Environmental assessment underway 26
Slide 27: What's changed in Quebec since BAPE?
What’s changed in Quebec since BAPE? • Public relations work by Questerre has focused on communicating the benefits of development to Quebecers Founding member of the Quebec Oil & Gas Services Association • Polls are moving, very slowly, with fewer people against shale gas development in the provinc
Slide 28: Outlook
Outlook 28
Slide 29: Outlook
Outlook • Implement waterflood in Antler, Saskatchewan to maximize recovery of oil in place • Drill up to three more (1.30 net) wells in Kakwa-Resthaven for liquids-rich Montney shale - Four (1.55 net) wells in total for 2013 • Finalize in-field constructability tests for EcoShale process in Utah •
Slide 30: Investment summary
Investment summary • Major new liquids-rich resource in Montney shale, Alberta • Light oil resource play in Antler, Saskatchewan with incremental high value Strong reserves portfolio • Oil shale projects offer opportunity to capture significant oil resources • Mega discovery in Utica shale with long
Slide 31: Management and Board
Management and Board Management Board Michael Binnion, President & Chief Executive Les Beddoes, Jr. Officer International explorationist Former VP Exploration, Bow Valley Energy Inc.; Victoria, John Brodylo, VP Exploration (Nexen) BC Peter Coldham, VP Engineering & Operations Michael Binnion, Presid
Slide 32: Forward looking information
Forward looking information This presentation contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" an
Slide 33: Questerre contact details
1650 AMEC Place 801 Sixth Avenue SW Calgary, Alberta T2P 3W2 Canada Tel: (403) 777 1185 / Fax: (403) 777 1578 www.questerre.com info@questerre.com www.blog.questerre.com www.facebook.com/Questerre Twitter: @Questerre_utica