Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — CAPP Oil and Gas Investment Symposium 2011
28 slides from Questerre Energy Corporation Class A's conference presentation, June 2011
Slide 1: Corporate Presentation
Corporate Presentation CAPP Oil and Gas Investment Symposium June 13-15, 2011
Slide 2: Presentation outline
Presentation outline • Company Overview • St. Lawrence Lowlands, Québec • Antler, Saskatchewan • New Ventures • Investment Summary 2
Slide 3: Corporate Overview
Corporate Overview • Large prospective resource in Québec ̶ Over one million acre land position ̶ 18 Tcf prospective recoverable resource in Utica shale on Questerre lands ̶ Land tenure until 2018 – Government plans to extend term further ̶ Comprehensive strategic environmental assessment (“SEA”) un
Slide 4: Asset overview
Asset overview • St. Lawrence Lowlands, Québec – Giant Utica shale gas discovery being commercialized with partners – Lorraine shale upside • Southeast Saskatchewan/Manitoba – Proven Bakken/Torquay light oil resource style play with cash flow and high netbacks • Northeast British Columbia – Acreage
Slide 5: Financial Overview
Financial Overview Operating and Financial Results Quarter ended March 31 2011 2010 Working capital ($) 130 million 166 million Debt Nil Nil Cash Flow from operations ($) 1.6 million 0.5 million Production (boe/d) 650 600 Oil weighting 69% 49% Revenue ($/boe) 67.8 55.1 Operating Netback ($/boe) 48.5
Slide 6: St. Lawrence Lowlands, Québec
St. Lawrence Lowlands, Québec 6
Slide 7: St. Lawrence Lowlands
St. Lawrence Lowlands • Where Québec is currently ̶ BAPE ̶ Royalty regime ̶ Legislation ̶ Social acceptability • Where Questerre is currently ̶ Path to commercialization • What’s next for Québec ̶ Prerequisites for development Aerial view of St. Edouard region ©Questerre Energy Corporation 7
Slide 8: Where Québec is currently
—_— ~, Where Québec is currently
Slide 9: BAPE
BAPE • BAPE mandates multi-stakeholder committee to oversee strategic environmental assessment (SEA) – European approach as opposed to North American approach • BAPE says no fracture stimulation during environmental assessment ̶ Exception is pilot projects • Government will be involved ̶ This is a g
Slide 10: Interim Regulations
Interim Regulations • Interim regulations require operators to inform and consult with public prior to commencing operations – Questerre does this already • MDDEP may have representatives participate as observers in process – New, but positive to provide a forum for regulators to gain experience • O
Slide 11: Royalty regime
Royalty regime • Intention is to increase government take from 33% to 50% for base royalty ̶ Including corporate and provincial taxes ̶ Target is similar to current regime in British Columbia and Alberta for conventional production ̶ Under today’s conditions and results, industry would not be profit
Slide 12: Legislation
Legislation • Clear from BAPE study and royalty report that Québec is working hard to create an oil and gas regime • Québec is not relying on industry so it will take time to independently develop their own expertise – $6 million budget has been allocated by Ministry of Finance • Expectations is tha
Slide 13: Social acceptability
Social acceptability • Industry is disconnected from the public – Financial intermediation separates producers from consumers – Risk management industry accustomed to moving capital from one jurisdiction to another – Not a consumer-focused industry • System has worked really well and industry has de
Slide 14: Where Questerre is currently
Where Questerre is currently 14
Slide 15: Where Questerre is currently
Where Questerre is currently • 4.4 TCF prospective recoverable resource, evaluated by NSAI • Land position is the heart of the fairway • Premium gas market • Currently in advanced piloting phase • Land held until at least 2018 15
Slide 16: Path to commercialization
Path to commercialization 600 500 Committed Capital ($ millions) 400 400+ 300 Quebec Currently 200 100 to 300 100 0 to 75 50 to 150 0 IDENTIFY INVESTIGATE ADVANCED TRIAL COMMENCE Resource Rock Properties Pilots Development Commercial Development Committed capital amounts above are for 100% joint ven
Slide 17: What's next for Québec
What’s next for Québec 17
Slide 18: Prerequisites for development
Prerequisites for development • Strategic Environmental Assessment • Complete advanced piloting phase and sweet spot identification • Establish hydrocarbon legislation • Achieve social acceptability • Develop local service sector 18
Slide 19: Antler, Saskatchewan
Antler, Saskatchewan 19
Slide 20: Antler – Overview
Antler – Overview • A core area for Questerre • High margin, light oil asset targeting Torquay/Bakken resource play ̶ Average royalties of 6% and operating costs of approximately $10/bbl • Developing and expanding existing oil pool with positive early results – Refining drilling and completion techn
Slide 21: Antler – Key Statistics
Antler – Key Statistics • Infill and step out locations 42 • Exploration acreage (sections) 60 • 2P Reserves (million bbls) 1.4 • 2010 Recycle ratio 2.5 (2P Reserves including future capital) • 2010 Netbacks per barrel $63.12 (2010 Selling price $77.83 per barrel) • 2010 F&D per barrel $25.26 (2P Re
Slide 22: Antler – Developing a core area
Antler – Developing a core area • Goal is to increase production to 2,000 bbl/d during SEA in Quebec ̶ Move from 1 rig to 2 rigs + contract frac crew for 2012 ̶ Water flood to further increase recoveries ̶ Acquisitions in core operating area ̶ Look for analogous pools 22
Slide 23: New Ventures
New Ventures • Questerre is an early leader in shale – Internal expertise and core competencies beyond typical juniors – Hired pioneer in shale gas development in North America, Dr. Basim Faraj for new ventures team – Have resources, expertise and track record for high- impact, early stage shale opp
Slide 24: Outlook
Outlook • Accelerate work with Quebec government and other stakeholders over next two years – Conduct pilot operations and participate in SEA – Establish hydrocarbon legislation and regulatory framework targeting early commercial development by mid-late 2014 – Continue work for social license to ope
Slide 25: Investment summary
Investment summary • Mega discovery in Utica shale with long land tenure Strong • Unconventional light oil resource play in Saskatchewan portfolio • Well positioned to acquire and develop leading edge shale projects • Large retained interest and running room in Utica discovery Large growth • Opportu
Slide 26: 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 Karen Carle, Manager Public Affairs Michael Binnion, President & C
Slide 27: 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 28: 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
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