Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — Pareto Securities E&P Independents Conference 2013
33 slides from Questerre Energy Corporation Class A's conference presentation, Jan 22, 2013
Slide 1: Corporate Presentation
Corporate Presentation Pareto Securities E&P Independents Conference London January 22, 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 pa
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
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 Nine months ended September 30, 2012 Working capital surplus($) 40.6 million Debt Nil Cash Flow from operations ($) 7.35 million Production (boe/d) 648 Oil weighting 85% Revenue ($/boe) 76.60 Operating Netback ($/boe) 54.40 All financial amounts in
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 $45.60/bbl based on 2P reserves of 2.1 million barrels and $96.3 million NPV-10 as at December 31, 2011 • 2012 YTD netbacks of ~$68/bbl based on $89/bbl realized oil pri
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 (no gas or water drive) at Antler ideal candidate for waterflood Ongoing waterflood • Wat
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 • Developm
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 on production at 1,260 boe/d (158 Bbls/MMcf of condensate) • QEC 37.5% interest BPO, 25% APO • Second well tested at 1,800 boe/d (200 Bbls/MMcf of condensate) • QEC 25% intere
Slide 14: Area Activity
Area Activity Test results based on published company data 14
Slide 15: Industry Activity
Industry Activity Paramount Musreau/Resthaven Montney PA Paramount Expanding Capacity To Handle Three Times Current Company Output By Pat Boctna Jen Bidet Fa . ‘une Vearven | tame meen Cored 5 € eS | Paramount Expanding Capacity To Handle Three Times Current Company Output By Pat Roche Paramount Res
Slide 16: Industry Activity
Industry Activity Resthaven 3 - Montney cxonMobil 8 fy Pat che Shallow-cut Gas Plant : s . Average Liquids @ 50 bbis/mmef (75% C5+) [Range is 40 (Jayar) to 60 (Kakwa) bblsimmef] Hi Exploration Lit, ence on Mul Camadie Lid. fr ¥ ca pce Deep-cut Gas Plant: Liquids @ 77 bbisimmef (55% C5+; 0% C2) Liqui
Slide 17: Industry Activity
Industry Activity Compelling Economics Now ... With line-of-sight to exceptional Original Typecurve Early Pilot Wells, Long Tieins 2013-14 Dav Wells HhiVista has also entered ito @ Seat ages Caphal Markets CIBC World Markets inc. Fin Securities Inc. for the issuance of an additional 4 24 *~ Mawes to
Slide 18: Well results
Well results • First two wells tested same interval in the upper Montney and are above average for area ̶ 40%+ condensate and NGL - rates better than expected • Production tests support robust economics for play ̶ Type well of 3.5 Bcf natural gas and 300,000 barrels of condensate and liquids – NPV-1
Slide 19: Growth potential
Growth potential • Questerre is currently targeting one of three prospective intervals in the Upper Montney ̶ For each section, each interval estimated at 14-20 Bcf and 1.2-2 million barrels recoverable resource based on development of 4 wells per interval ̶ Entire zone is approximately 100m thick •
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 s
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 and others has resulted in a supportive vocal constituency • Announcement of a moratorium by Minister of Natural Resources was publicly criticized, then withdrawn • Polls are moving, slowly, with fewer people against shale gas
Slide 28: Outlook
Outlook 28
Slide 29: Outlook
Outlook • Implement waterflood in Antler, Saskatchewan to maximize recovery of oil in place • Drill three more (1.30 net) wells in Kakwa-Resthaven for liquids-rich Montney shale - Four (1.55 net) wells in total for first half of 2013 • Finalize in-field constructability tests for EcoShale process in
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 John Brodylo, VP Exploration (Nexen) Former VP Exploration, Bow Valley Energy Inc.; Victoria, BC Peter Coldham, VP Engineering (Chevron) Michael Binnion, President
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: Calgary office 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
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