Calgary, Alberta -- Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) reported that it has executed a Letter of Intent with a senior exploration and production company (the “LOI”) to settle outstanding litigation and acquire all their assets in the St. Lawrence Lowlands, Quebec (the “Lowlands”).
Michael Binnion, President and Chief Executive Officer of Questerre, commented, “On closing, we will gain operatorship of our acreage in the Lowlands. We will be in a much better position to communicate directly with municipalities and address local concerns and acceptability. Our approach is that good relationships with local communities comes first and development second."
He added, “We will continue our step by step approach of working with the government and municipalities. This project will proceed by adequately addressing their concerns and making sure they participate in the benefits. We are confident that, with success, this project will help Quebec greatly reduce its hydrocarbon import problem and meet its 2030 energy policy targets.”
Pursuant to the LOI, Questerre will acquire the exploration rights to 753,000 net acres in the Lowlands, associated wells and equipment, geological and geophysical data and other miscellaneous assets. Upon closing of the transaction, both parties will release each other from all claims related to the outstanding litigation. Other consideration including cash and the security required for the assumption of abandonment and reclamation liabilities (“A&R Liabilities”) is approximately $16.10 million in aggregate. Questerre may post a letter of credit as security for the A&R Liabilities.
Closing of the transaction is subject to the enactment by the Ministry of Energy and Natural Resources (“Ministry”) in Quebec of the following regulations (the “Regulations”): (i) the Regulation Respecting Petroleum Exploration, Production and Storage in a body of water; (ii) the Regulation Respecting Petroleum Exploration, Production and Storage on land; and (iii) the Regulation Respecting Petroleum Exploration, Production and Storage Licenses, and Pipeline Construction or Use Authorization. The Company anticipates the final Regulations could be published around the end of the second quarter of this year. Additional conditions to closing include the execution of a purchase and sale agreement.
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 significant 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.
For further information, please contact:
Questerre Energy Corporation
Jason D’Silva, Chief Financial Officer
(403) 777-1185 | (403) 777-1578 (FAX) |Email: firstname.lastname@example.org
Advisory Regarding Forward-Looking Statements
This news release contains certain statements which constitute forward-looking statements or information (“forward-looking statements”) including the Regulations being published and the timing thereof, the settlement of the litigation, the posting of a letter of credit as security for the A&R Liabilities, the entering into of a purchase and sale agreement and the closing of the transaction. There is no assurance that the transactions contemplated herein will close as anticipated or at all. 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 information, including the risks that the Regulations are not enacted in a timely manner or prevent the closing of the purchase and sale of the Quebec Assets. 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 because 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.
Forward-looking statements are based on several 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 these forward-looking statements are reasonable, undue reliance should not be placed on them because Questerre can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.
Further, events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including, without limitation: whether the Company's exploration and development activities respecting its prospects will be successful or that material volumes of petroleum and natural gas reserves will be encountered, or if encountered can be produced on a commercial basis; the ultimate size and scope of any hydrocarbon bearing formations on its lands; that drilling operations on its lands will be successful such that further development activities in these areas are warranted; that Questerre will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities will be consistent with past operations; the general stability of the economic and political environment in which Questerre operates; drilling results; field production rates and decline rates; the general continuance of current industry conditions; 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; changes in commodity prices; changes in the demand for or supply of the Company's products; unanticipated operating results or production declines; changes in tax or environmental laws, changes in development plans of Questerre or by third party operators of Questerre's properties, increased debt levels or debt service requirements; inaccurate estimation of Questerre's oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Questerre's public disclosure documents. Additional information regarding some of these risks, expectations or assumptions and other factors may be found under in the Company's Annual Information Form for the year ended December 31, 2017 and other documents available on the Company’s profile at www.sedar.com. The reader is cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and Questerre undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.