Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — Investor Presentation (June 2009)
30 slides from Questerre Energy Corporation Class A's investor presentation, June 2009
Slide 1: Corporate Presentation June 2009
Corporate Presentation June 2009 Questerre Energy Corporation
Slide 2: Forward looking Statement
Forward looking Statement This presentation contains forward‐looking information. Implicit in this information are assumptions regarding oil and natural gas prices, production, royalties and expenses that, although considered reasonable by Questerre at the time of preparation, may prove to be incorr
Slide 3: Presentation Outline
Presentation Outline • Company Overview – Business Strategy – Asset Overview – Management & Board – Operating & Financial Results – Capitalization • Areas of operation – St. Lawrence Lowlands, Quebec – Northeast British Columbia – Conventional Assets • Outlook – Current activities – Investment summa
Slide 4: Business Strategy
Business Strategy Commercializing the Quebec shale discovery • Incredible resource potential for Questerre in Quebec shales through successful execution of original business strategy • Commercialization pre‐pilot programs underway to unlock value for shareholders • Continued risk mitigation through
Slide 5: Asset Overview
Asset Overview St. Lawrence Lowlands, Quebec • Potentially giant Utica & Lorraine Northeast Southeast shale gas discoveries being evaluated British Columbia Saskatchewan by Forest Oil & Talisman • Follow‐up exploration by Talisman on new basin Trenton Black‐River discovery Northeast British Columbia
Slide 6: Management
Management Michael Binnion, President & Chief Executive Officer John Brodylo, VP Exploration (Nexen) Peter Coldham, VP Engineering & Operations (Chevron) Jason D’Silva, Chief Financial Officer (CanArgo, Flowing) Paul Harrington, VP Finance (Zargon Energy Trust) Jason Kaluski, Operations Manager (ARC
Slide 7: Board of Directors
Board of Directors • Les Beddoes, Jr. – International explorationist – Former VP Exploration, Bow Valley Energy Inc.; Victoria, BC • Michael Binnion, President & Chief Executive Officer • Pierre Boivin – Experienced Quebec‐based business leader – President, Montreal Canadiens; Montreal, QC • Russ Ha
Slide 8: Operating and Financial Results
Operating and Financial Results Q1 2009 Q1 2008 Cash Flow $1.06 million $3.94 million Production Crude Oil and Natural Gas Liquids (bbls/d) 463 (44%) 176 (13%) Natural Gas (mcf/d) 3,514 (56%) 7,282 (87%) Total (boe/d) 1,049 1,390 Revenue ($/boe) 39.46 62.38 Royalties ($/boe) 4.97 11.00 Operating Exp
Slide 9: Capitalization
Capitalization Insiders 21,702,961 11% Free Float 175,596,681 89% Total 197,299,642 Options (Average exercise price $1.28) 18,710,421 Average daily trading volume (OSE plus TSX) 2,208,158
Slide 10: St. Lawrence Lowlands, Quebec
St. Lawrence Lowlands, Quebec “All Hail the Triumphant” Copyright 2008 Daedalus Designs Inc. Courtesy Kinsman Robinson Galleries, Toronto in association with Master’s Gallery Ltd., Calgary
Slide 11: Why Shale Gas in Quebec
Why Shale Gas in Quebec • Favorable fiscal terms • Well defined deep fairway with IGIP “incredible gas in place” Lorraine Shale • Large land position with drilling inventory measured in decades
Slide 12: Favorable Fiscal Terms
Favorable Fiscal Terms • Canada’s second largest natural gas market‐ over 0.5 Bcf/d • Additional estimated 200‐ 400 mmcf/d capacity on TCPL (seasonal) • Royalties of 10% to 12.5% Pipeline infrastructure in Lowlands Comparative Illustration of Fiscal Terms • Realized natural gas prices Alberta Quebec
Slide 13: Well Established Geology
Well Established Geology Utica Structure Map Schematic Cross Section of Lowlands Play Fairway Unstructured Structured
Slide 14: Dominant Land Position in Fairway
Dominant Land Position in Fairway • 500 net sections Quebec City (over 1,200 sq. km) • Land values validated by Canbriam/Suncor 2007 Activity 2008 Activity farm‐in 2009 Activity Montreal Acreage Gross Net Questerre ‐ TLM (~25% + 4.25% GORR) 719,788 206,746 Yamaska – FST/GMR (20% working interest) 11
Slide 15: IGIP – Incredible Gas in Place
IGIP – Incredible Gas in Place Stratigraphy SYSTEM GROUP FORMATION MIDDLE LORRAINE BASAL MIDDLE/UPPER ORDOVICIAN LORRAINE INDIAN INDIAN CASTLE CASTLE UTICA DOLGEVILLE DOLGEVILLE FLAT FLAT CREEK CREEK TRENTON • Discovered resource potential over 35 Tcf on Questerre net acreage
Slide 16: Multi Tcf Potential
Multi Tcf Potential Assumptions Estimated discovered resource of 93 Bcf/section for Utica and 120 Bcf/section for Lorraine based on TLM, FST & QEC estimates Recovery factors based on 100 acre spacing for Utica and 80 acre spacing for Lorraine Potential contingent resource based on 70% prospectivity
Slide 17: Realizing the Potential
Realizing the Potential Barnett Shale (Texas) • Every shale play has its own 7,000 F ir st Y e a r A v g G a s R a te (M C F P D ) 6,000 learning curve and requires 5,000 unique, innovative solutions 4,000 3,000 2,000 1,000 • Acquire a statistically - significant set of results and 5/7/1990 1/31/199
Slide 18: Preliminary Talisman Well Results
Preliminary Talisman Well Results • Four vertical wells drilled to evaluate Utica and Lorraine shale formations and Trenton‐Black River carbonates throughout entire block – Initial testing complete on Gentilly #1, La Visitation #1, St. David #1 with St. Edouard #1 to be tested this summer • Utica fl
Slide 19: Forest Oil Horizontal Well Results
Forest Oil Horizontal Well Results • Sustained rates of 100 – 800 mcf/d • Different intervals tested for frac effectiveness • Rock breaks well – sufficient rock volumes stimulated – frac geometry confirmed by microseismic Frac operations on Forest horizontal wells • Good pressure gradients with high
Slide 20: Measuring up to a Proven Shale Play
Measuring up to a Proven Shale Play Quebec shale compared to SWN Fayetteville shale 4 3.5 Daily Gas Rate (mmcf/d) 3 2.5 2 1.5 1 0.5 0 an an an an an an an an Year 1 Year 2 Year 3 Year 4 -J -J -J -J -J -J -J -J 01 01 01 01 01 01 01 01 Quebec Southwestern Trend Line Trend Line Initial results are well
Slide 21: Quebec Expected Timeline
Quebec Expected Timeline 2008 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Optimization Commercial Development Pilot Project Rock Properties Investigation Resource Identification Original timeline is generally being met with some delays due to market conditions
Slide 22: Outlook
Outlook • Add to database – Finalize testing of Gentilly #1 and La Visitation #1 well – Test St. David #1 – Test St. Edouard #1 for TBR and shale intervals • Test one variable at a time – Re‐enter and re‐frac Yamaska wells Drilling rig for Forest horizontal wells • Pilot multi‐well pad – Acquire sei
Slide 23: Northeast British Columbia
Northeast British Columbia
Slide 24: Liard Shale
Liard Shale • over 23,000 (11,500 net acres) • Harness and apply learning curve from Quebec • A‐5 well has encouraging results – 5 mmcf/d on Mississippian production shale/siltstone sequence • Seeking partners to gather base data to rigorously evaluate Liard shale potential • Beaver River project ad
Slide 25: Horn River Shale
Horn River Shale • 17,900 (12,800 net) acres prospective for Horn River shale • On trend with horizontal drilling by PetroCanada, Apache, EnCana • Additional prospectivity for reef anomalies adjacent to Sierra Yoyo reef complex and up‐hole Jean Marie target • First test well planned for winter 2010
Slide 26: Conventional Assets
Conventional Assets Antler, Saskatchewan • Validated horizontal multistage wells to increase recovery • Over 50 drilling locations • Flexibility to accelerate development drilling based on higher commodity prices Greater Sierra, Northeast BC Oil Battery at Antler • Completed drilling program and 3‐D
Slide 27: Company Outlook
Company Outlook
Slide 28: 2009 Outlook
2009 Outlook Quebec • Complete testing of multi‐zone deep vertical wells with Talisman • Refine completion design and re‐enter and re‐complete Yamaska horizontals • Acquire seismic over potential pilot areas Northeast British Columbia • Validate Liard shale play rock properties at Beaver River Field
Slide 29: Investment Summary
Investment Summary • Multiple opportunities in Lowlands including recent discoveries Strong • New shale play being tested in Liard basin portfolio • Long‐life Jean Marie gas in northeast British Columbia • Significant light oil development at Antler in Saskatchewan • Large retained interest in poten
Slide 30: 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