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The Quebec Lowlands are situated in Quebec, south of the St. Lawrence River between Montreal and Quebec City. The exploration potential of the Ouebec Lowlands is complemented by proximity to one of the largest natural gas markets in North America and a well-established distribution network.
The area is prospective for natural gas in several horizons with the primary target being the Utica shale. Secondary targets include the shallower Lorraine shale and the deeper Trenton Black-River carbonate. The majority of Questerre’s acreage lies in the heart of the fairway between two major geological features — Logan’s Line, a subsurface thrust fault to the east and the Yamaska growth fault to the west.
Following a successful vertical test well program in 2008 and 2009, Questerre and its partner, Repsol, began a pilot horizontal well program to assess commerciality of the Utica shale in 2010. In the fall of 2010, the pilot program was suspended while the provincial government initiated the SEA.
In April 2016, the Government of Quebec released a new energy policy setting out targets to be achieved by 2030: (i) enhance energy efficiency by 15%, (ii) reduce by 40% the amount of petroleum products consumed, (iii) eliminate the use of thermal coal; (iv) increase by 25% overall renewable energy output; and (v) increase by 50% bioenergy production.
In December 2016, the Government of Quebec passed Bill 106, An Act to implement the 2030 Energy Policy and to amend various legislative provisions. Bill 106 enacts or amends various pieces of legislation relating to clean energy and oil and gas exploration in the Quebec, including the Petroleum Resources Act (Quebec), which sets out a comprehensive new regime governing petroleum exploration and development in Quebec. The date of the coming into force of the Petroleum Resources Act (Quebec) has not yet been set and the regulations referred to in the said act remains to be drafted and enacted.
In March 2017, the Government of Quebec enacted Bill 102, An Act to amend the Environment Quality Act to modernize the environmental authorization scheme and to amend other legislative provisions, in particular to reform the governance of the Green Fund, which brings a number of amendments to the Environment Quality Act mainly in order to modernize the authorization schemes it prescribes, in particular to take climate change issues more fully into account. These amendments will come into force gradually over the next two years.
Along with social acceptability, these hydrocarbon regulations and environmental legislation are prerequisites to the resumption of field activities to assess the Company’s Utica gas discovery in the province.
In early 2017, the Company updated the resource assessment of its Utica acreage in Quebec (the “GLJ Resource Assessment”). See the company's press release dated February 8, 2017.