QEC - Questerre executes new strategy during environmental assessment in Québec

 
 
Calgary, Alberta -- Questerre Energy Corporation 
("Questerre" or the "Company") (TSX,OSE:QEC) reported 
today on its preliminary financial and operating 
results for the first quarter of 2011. 
 
Michael Binnion, President and Chief Executive Officer 
of Questerre, commented, "The BAPE commission chose a 
more international approach to the development of our 
shale gas discovery, mandating a comprehensive 
strategic environmental assessment. We would have 
preferred a North American approach leveraging the 
extensive expertise of our industry that is 
successfully developing other shale plays across the 
continent." 
 
Mr. Binnion added, "Within this two-year study period, 
we anticipate the province will develop the necessary 
internal expertise and regulations to allow us to 
begin commercialization of our discovery. In the 
interim, our focus will be to build our light oil 
assets in Antler into a core area with a production 
goal of about 2,000 barrels per day. We are also 
planning to add new projects to diversify our 
portfolio. Our recently formed new ventures team is 
selectively evaluating early stage shale opportunities 
with a near term focus on oil." 
 
Highlights 
 
·	BAPE report recommends a strategic environmental 
assessment for shale gas development in Québec 
·	Shale gas incentives in conjunction with royalty 
increases are announced by Québec Ministry of Finance  
·	Completion equipment availability and inclement 
weather slowed the expanding program in Antler to grow 
light oil reserves 
·	Established new ventures group to evaluate high 
impact shale opportunities with a focus on 
unconventional oil 
·	Increased oil weighting resulted in positive cash 
flow from operations of $1.64 million with average 
daily production of 650 boe/d 
·	Maintained financial strength with over $130 million 
in positive working capital with no debt 
 
For the first quarter of 2011, increasing oil 
production benefitted from higher oil prices and 
significantly improved operating results. The Company 
reported gross petroleum and natural gas revenue of 
$3.97 million for the quarter (2010: $2.98 million) 
with average daily production of 650 boe/d (2010: 600 
boe/d). Higher capital investment in Antler, 
Saskatchewan in 2010 resulted in crude oil and natural 
gas liquids accounting for 69% of the Company's 
product mix (2010: 49%). Strong netbacks in this area 
contributed to cash flow from operations of $1.64 
million in the quarter as compared to $0.52 million 
for the same period in 2010. 
 
As at March 31, 2011, the Company reported a net 
working capital surplus of $130.62 million. 
 
The term "cash flow from operations" is a non-GAAP 
measure. Please see the reconciliation elsewhere in 
this press release. 
 
Questerre Energy Corporation is an independent energy 
company focused on shale projects. The Company is 
leveraging its expertise to commercialize projects 
like its Utica shale gas discovery in the St. Lawrence 
Lowlands, Québec. Questerre is committed to the 
economic development of its resources in an 
environmentally conscious and socially responsible manner. 
 
For further information, please contact: 
 
Questerre Energy Corporation 
Anela Dido, Investor Relations 
(403) 777-1185 | (403) 777-1578 (FAX) |Email: 
[email protected] 
 
This news release contains certain statements which 
constitute forward-looking statements or information 
("forward-looking statements"), including the scope 
and timing of future operations in Québec and 
Saskatchewan. Although the Company 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 the 
Company. 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 
statements, 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, the Company 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. 
 
This news release does not constitute an offer of 
securities for sale in the United States.  These 
securities may not be offered or sold in the United 
States absent registration or an available exemption 
from registration under the United States Securities 
Act of 1933, as amended. 
 
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 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. 
 
This press release contains the terms "cash flow from 
operations" and "netbacks" 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.  
 
Cash Flow from Operations Reconciliation 
 
For the three months ended March 31,		2011	2010 
Cash flows from operating activities		$866,496	$2,664,154 
Net change in non-cash operating working capital	 
770,454	(2,147,763) 
Cash flow from operations		$1,636,950	$516,391 
 
The Company considers netbacks a key measure as it 
demonstrates its profitability relative to current 
commodity prices. Operating netbacks per boe equal 
total petroleum and natural gas revenue per boe 
adjusted for royalties per boe and operating expenses 
per boe.  
 
The Company also uses the term "working capital 
surplus". Working capital surplus, as presented, does 
not have any standardized meaning prescribed by GAAP 
and may not be comparable with the calculation of 
similar measures for other entities. Working capital 
surplus, as used by the Company, is calculated as 
current assets less current liabilities excluding the 
current portion of the share based compensation liability.