Professional Documents
Culture Documents
ue
to be
be c O
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20 a
1 nd
6
G
as
CORPORATE
PRESENTATION
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OUTLINE
1.
2.
3.
4.
5.
COMPANY STRATEGY
Leverage extensive tight rock/shale rock expertise to acquire
resources early and high grade to prove up reserves
Understanding the rocks to capture the economic sweet spot (4% of acreage with
the best economics)
Acquiring acreage positions with potential for scalable projects
Business plan has been successful in capturing high quality, largescale resource
Exceptional economics for condensate-rich natural gas in the Montney - 55 net
sections with 2P reserves of ~8.5 MMBoe established on 4 net sections to date
Strategic gas discovery in Quebec with Repsol as new operator
(1)
ASSET OVERVIEW
SE Saskatchewan/ SW
Manitoba
Proven Torquay/Spearfish tight oil
production
with strong netbacks
Western Alberta
Kingdom of Jordan
Significant oil shale deposit under
assessment for commercial development
$23 million
(Sept. 8,
2016)
$1.92
million
$50 million
20,177,16
4
271,147,2
93
291,324,4
57
(2)
1,480
oil + liquids
weighting
59%
$31.38
$58
million
$14.82
7%
93%
17,517,00
0
678,718
(1) Working capital deficit of $18 million as of July 31 post closing of $4.75 million placement
(2) Credit facility revised to $30 million effective July 18, 2016
All financial amounts in C$
CONDENSATE-RICH
MONTNEY
Montney play is
approximately 500 km
long by 200 km wide
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39
2A th
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2015/2016 RESULTS
(1)
Recent 1.5 mile well (16-20) with lateral of 2100m drilled in ~40
days compared to first 1 mile well (13-17) with lateral of 1600m in
64 days
Condensate rates
(Bbls/MMcf) have remained
stable
Operator installing gas lift
to improve uptime
Positive returns at
US$50/bbl with leverage to
improving oil and gas
prices
Payout
Type curves based on independent reserve engineers forecast of proved and proved + probable reserves as at December 31, 2015
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Prepared in accordance with COGE Handbook
(1)
See Test Well Results on Page 21, Forward-Looking Information
RUNNING ROOM
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$5 million - Participating in up to 2 (0.5 net) additional wells, on a well-bywell basis, based on results and prices
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Original BAPE
Strategic Environmental Assessment for shale gas
Second BAPE
Strategic Environmental Assessment for oil and
gas in Quebec
Public consultation on Strategic Environmental
Assessment of oil and gas in Quebec
Green Book published (seeking public input)
Energy Policy
Introduction of Hydrocarbon legislation
Debate and approval of legislation (Ongoing)
Introduction of regulatory system (Expected 2017)
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OIL SHALE
Major resource with potential for commercial
development
Estimated 2.8 - 3.1 trillion barrels in place
worldwide(1)
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OUTLOOK
Increasing capital investment for Montney to capitalize on prices and results to
date
Government and public relations work in Quebec focused on developing new
hydrocarbon legislation and regulations
Assess Jordan oil shale project for commercial viability
Preserve financial liquidity while retaining leverage to strengthening oil and
gas prices
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Management
Michael Binnion, President & Chief Executive Officer
John Brodylo, VP Exploration (Nexen)
Earl Hickok
Professional Engineer with operations, engineering and management
expertise
President & CEO, TSO Energy Corporation, private E&P company
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FORWARD-LOOKING INFORMATION
This presentation contains certain forwardlooking 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, outlook, strategy, potential,
forward, defer and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the
forgoing, this presentation may contain forward-looking information and statements pertaining to the following: corporate strategy, corporate oil and
natural gas assets, targeted Montney intervals, drilling plans and methodology, well performance and economics, 2016 Capital Investment, Quebec
regulatory environment, field work, Ecoshale technology and the development thereof, the volumes and estimated value of Questerre's oil and gas
reserves and resources; the volume of Questerre's oil and gas production; future oil and natural gas prices; liquidity and financial capacity; expected
results from operations and operating metrics; exploration, acquisition and development activities and related capital expenditures; the amount and
timing of capital projects and operating costs.
Certain information set out under the headings Company Strategy, Condensate-Rich Montney, Well Performance & Economics, St. Lawrence Lowlands,
Oil Shale and Outlook" is financial outlook within the meaning of applicable securities laws. Financial outlook has been prepared by Management to
provide readers with disclosure regarding the Corporations reasonable expectations as to the anticipated results of its proposed business activities for
2016 and beyond. Readers are cautioned that this financial outlook is based upon numerous assumptions, including the assumptions discussed herein
and may not be appropriate for other than indicative purposes. The actual results of operations and the resulting financial results will likely vary from the
amounts set forth in the analysis presented in this presentation, and such variation may be material. With respect to information included under the
heading EcoShale, including information from Red Leaf Resources, Inc. (Red Leaf), Red Leaf makes no guarantees as to the accuracy or
completeness of any information contained. The information contained herein may be amended at any time by Red Leaf. Information contained herein is
for informational purposes only and does not constitute an offer to sell or a solicitation to buy any securities of Red Leaf.
Questerre and its management believe that the financial outlook information herein has been prepared on a reasonable basis, reflecting the best
estimates and judgments, and represent, to the best of management's knowledge and opinion, Questerre's expected expenditures and results of
operations. However, because this information is highly subjective and subject to numerous risks including the risks discussed herein, it should not be
relied on as necessarily indicative of future results. Except as required by applicable Canadian securities laws, Questerre undertakes no obligation to
update any such financial outlook information.
The recovery and reserve estimates of Questerre's reserves and resources provided herein are estimates only and there is no guarantee that the
estimated reserves or resources will be recovered. In addition, forward-looking statements or information are based on a number of material factors,
expectations or assumptions of Questerre which have been used to develop such statements and information but which may prove to be incorrect.
Although Questerre believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not
be placed on forward-looking statements because Questerre can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the timing
and extent of capital programs by Questerre and its partners in Alberta, the scale and scope of its investment in Red Leaf and developments with Red
Leaf and its assets, the impact of increasing competition; the general stability of the economic and political environment in which Questerre operates;
the timely receipt of any required regulatory approvals; the ability of Questerre to obtain qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of the projects in which Questerre has an interest in to operate the field in a safe, efficient
and effective manner; the ability of Questerre to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and
expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction
and expansion and the ability of Questerre to secure adequate product transportation; future commodity prices; currency, exchange and interest rates;
regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Questerre operates; and the ability of Questerre
to successfully market its oil and natural gas products.
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FORWARD-LOOKING INFORMATION
Past performance of Questerre or other entities referred to in this presentation is shown for illustrative purposes only, does not guarantee future results
of Questerre and is not meant to forecast, imply or guarantee the future performance of Questerre, which will vary.
The forward-looking information and statements included in this presentation are not guarantees of future performance and should not be unduly relied
upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including,
without limitation: changes in commodity prices; changes in the demand for or supply of Questerre's products; unanticipated operating results or
production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Questerre or by
party operators of Questerre's properties; increased debt levels or debt service requirements; inaccurate estimation of Questerre's oil and gas reserve
volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of inadequate insurance coverage; the impact of
competitors; and certain other risks detailed from time-to-time in Questerre's public disclosure documents, (including, without limitation, those risks
identified in this presentation and Questerre's Annual Information Form).
A boe conversion ratio of six thousand cubic feet per barrel (6 mcf/bbl) of natural gas to barrels of oil equivalent is based upon an energy equivalency
conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such
disclosure of boes may be misleading, particularly if used in isolation. Additionally, given the value ratio based on the current price of crude oil
compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio at 6:1 may be misleading as an
indication of value.
The forward-looking information and statements contained in this presentation speak only as of the date of this presentation, and Questerre does not
assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new
information, future events or otherwise, except as may be required by applicable securities laws.
The reader is cautioned that well test results are not necessarily indicative of long-term performance or of ultimate recovery. Further information
regarding the well test results set forth herein for Questerre can be found in the press releases of Questerre dated May 4, 2012, November 5, 2012,
March 21, 2013, October 16, 2013, February 28, 2014, April 7, 2014, August 26, 2014, October 17, 2014 and February 10, 2015 and on SEDAR at
www.sedar.com and Questerres website at www.questerre.com.
Based on an evaluation of oil and gas reserves prepared by McDaniel & Associates Consultants Ltd. with an effective date of December 31, 2015 in
accordance with the COGE Handbook. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence
level as estimates of reserves and future net revenue for all properties due to the effects of aggregation.
(1)
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www.blog.questerre.com
www.facebook.com/Questerre
Twitter: @Questerre_utica
1650 AMEC Place
801 Sixth Avenue SW
Calgary, Alberta T2P 3W2 Canada
Tel: (403) 777 1185 / Fax: (403) 777 1578
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