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CALGARY, Aug. 11, 2016 /CNW/ - Questerre Energy Corporation ("Questerre" or the "Company") (TSX,OSE:QEC) reported today on its financial and operating results for the quarter ended June 30, 2016.

Michael Binnion, President and Chief Executive Officer, commented, "We stuck to our plan of restricting significant capital spending to sustain producing reserves and liquidity. We participated in two out of six new drills on our joint venture acreage at Kakwa this year. Well costs continue to average approximately 15% lower than last year when adjusted for horizontal length. We also saw a positive test from an upper Montney interval. These results will likely benefit future drilling and we plan to participate in two more wells this year."

Highlights

• Quebec Government introduces draft hydrocarbon legislation
• Evaluation of retorting technologies continues for Jordan oil shale project
• Credit facilities renewed at $30 million
• Average daily production of 1,422 boe/d with cash flow from operations of $1.92 million for the quarter

He added, "Following the energy policy released in April, the Government of Quebec introduced a new oil and gas law this June as planned. This is another major step forward. Parliamentary hearings on Bill 106, the proposed law, are scheduled to start this summer. We are hoping this law is passed in the fall and sets up the introduction of the related regulation next spring."

Commenting on the Company's oil shale assets in Jordan he further noted, "We are also making a small upfront investment in Jordan to see how this oil shale acreage can be developed and at what oil price. We are getting an independent assessment to confirm our view on this prospective resource."

The Company reported that production from the Kakwa-Resthaven area averaged 1,081 boe/d (2015: 1,159 boe/d) for the period and contributed to daily production of 1,422 boe/d during the second quarter of 2016 (2015: 1,480 boe/d). Gross revenue in the quarter of $4.42 million reflected the materially lower commodity prices in 2016 (2015: $6.05 million). Lower general and administrative expenses and realized gains on hedged volumes contributed to cash flow from operations of $1.92 million in the quarter (2015: $3.07 million). The Company reported a net loss of $2.17 million for the quarter compared to net income of $1.33 million for the same period in 2015.

Capital investment for the first six months declined by just over 60% from $13.30 million last year to $4.90 million in 2016. Consistent with prior quarters, over 80% of this amount was for the Kakwa-Resthaven area. The Company anticipates incremental investment in this area in 2016 could be up to $8 million.

The term "cash flow from operations" is a non-IFRS measure. Please see the reconciliation elsewhere in this press release.

Questerre Energy Corporation is leveraging its expertise gained through early exposure to shale and other non-conventional reservoirs. The Company has base production and reserves in the tight oil Bakken/Torquay of southeast Saskatchewan.  It is bringing on production from its lands in the heart of the high-liquids Montney shale fairway. It is a leader on social license to operate issues for its Utica shale gas discovery in the St. Lawrence Lowlands, Quebec. It is pursuing oil shale projects with the aim of commercially developing these massive resources.

Questerre is a believer that the future success of the oil and gas industry depends on a balance of economics, environment and society. We are committed to being transparent and are respectful that the public must be part of making the important choices for our energy future.

Advisory Regarding Forward-Looking Statements

This media release contains certain statements which constitute forward-looking statements or information ("forward-looking statements") including the belief that the results from 2016 will benefit future drilling in the Kakwa Resthaven area, the Company's participation in two more wells in this area in 2016, the Company's hope that the new hydrocarbon legislation in Quebec is passed the fall and the related regulation is introduced in the spring, the Company's plans to conduct an independent assessment of its acreage in Jordan and the anticipation that incremental capital investment in the Kakwa-Resthaven area could be up to $8 million.

Although Questerre believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to Questerre.  Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements.  As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements.  The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com.  Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Questerre does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.  The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil and the conversion ratio of one barrel to six thousand cubic feet is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

This press release contains the terms "cash flow from operations" and "working capital deficit" which are non-GAAP terms. Questerre uses these measures to help evaluate its performance.

As an indicator of Questerre's performance, cash flow from operations should not be considered as an alternative to, or more meaningful than, cash flows from operating activities as determined in accordance with GAAP. Questerre's determination of cash flow from operations may not be comparable to that reported by other companies. Questerre considers cash flow from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund operations and support activities related to its major assets.

Working capital surplus (deficit) is a non-GAAP measure calculated as current assets less current liabilities excluding risk management contracts.

SOURCE Questerre Energy Corporation