Questerre acquires minority interest in Red Leaf

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Calgary, Alberta — Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) announced today that it has made a strategic investment in Red Leaf Resources, Inc. (“Red Leaf”). Through an agreement with one of the vendors, Whitehorn Resources Inc. (“Whitehorn”), Questerre also has the option to acquire over 280 square km. prospective for oil shale in the Kingdom of Jordan (“Jordan”).

Michael Binnion, President & Chief Executive Officer of Questerre, commented, “This investment gives us a minority control block in Red Leaf. They now have over US$100 million in cash and are committed to their business plan of commercializing EcoShale technology and supporting their license holders to develop their projects. We will also have access to significant additional oil shale resources in Jordan through our agreement with Whitehorn.”

He added, “Their recent engineering work with Questerre on the use of coker drums as reusable capsules is encouraging for the commercial development of our project in Jordan. Combined with the initial positive results from testing our oil shale using the EcoShale process, this investment could materially accelerate the timeline for our economic feasibility work.”

Adolph Lechtenberger, Chief Executive Officer of Red Leaf, noted, “Commercializing the EcoShale process remains our top priority. Over the last year, we have been working with Questerre on their independently assessed multi-billion barrel deposit in Jordan. This is a unique opportunity for both our companies. Red Leaf is in a solid financial position and we look forward to continuing our work to support Questerre in developing this project.”

Questerre reported that it has entered into agreements to acquire 103,751 common shares of Red Leaf (“Common Shares”) representing approximately 25% of Red Leaf’s outstanding Common Shares. The first tranche of the acquisition for 82,015 Common Shares closed earlier this week with the second tranche scheduled to close later this month. On closing of the second tranche, Questerre will hold approximately 30% of the common share capital of Red Leaf. The acquisition price is US$60 per Common Share paid concurrently with the applicable closing and a contingent payment of US$12.50 per Common Share subject to the fulfillment of certain conditions.

The second tranche of the acquisition includes the option to acquire Whitehorn. In addition to the Red Leaf Common Shares held by Whitehorn, its assets include a Memorandum of Understanding (“MOU”) with the Ministry of Energy and Mineral Resources in Jordan granting Whitehorn the exclusive right to explore for oil shale on 282 square km in the Wadi Abu Al Hamam area. This acreage lies to the northwest of Questerre’s acreage. There are 30 core holes that have been drilled on this acreage with yields of between 15 and 25 gallons per ton. The term of the MOU was recently extended until 2019.

Questerre also announced that it has disposed of shallow exploration rights over 960 net acres, primarily on its operated acreage in the Kakwa area, for gross proceeds of $4.45 million and an overriding royalty. Questerre continues to retain the rights to develop the Montney formation on this acreage. No reserve value was attributed to the disposed rights as at December 31, 2016.

The Company also reported that it has been refunded approximately $6 million following the successful appeal of a summary judgment hearing in November 2016. The amounts relate to a claim by a joint venture operator primarily relating to the costs of drilling two wells in Quebec in 2010. The operator has appealed this ruling and a hearing is scheduled for early June 2017. A trial is currently scheduled for late 2018 in respect of this matter.

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:


Advisory Regarding Forward-Looking Statements

This news release contains forward-looking statements and information (“forward-looking statements”) within the meaning of applicable securities laws and is based on the expectations, estimates and projections of management of the Company as of the date of this news release, unless otherwise stated. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements. In particular and without limitation, this news release contains forward-looking statements concerning: the potential acquisition of Whitehorn Resources, Inc., the acceleration of the Company’s economic feasibility work in Jordan, the development of the Jordan project, the timing of the closing of the second tranche of Red Leaf shares and the timing of the hearing and trial. Such forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct.

In respect of the forward-looking statements concerning the anticipated benefits and completion of the acquisition of the Red Leaf shares, the Company has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of each of the Company and counterparties to satisfy, in a timely manner, the other conditions to the closing of the acquisition of the Red Leaf shares, the commercialization of EcoShale by Red Leaf, Red Leaf and Questerre working together and advancing Questerre’s project in Jordan; and expectations and assumptions concerning, among other things: land tenure, commodity prices and interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; future production rates; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services, the success of growth projects; future operating costs; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material construction or other costs related to current growth projects or current operations.

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties, including but not limited to: failure to realize the anticipated benefits of the acquisition of Red Leaf Shares, 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 and other operations on its lands will be successful such that further development activities in these areas are warranted; that the Company 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 the Company 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 the Company 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 the Company operates; the ability of the Company 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 the Company or by third party operators of the Company’s properties, increased debt levels or debt service requirements; inaccurate estimation of the Company’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 the Company’s public disclosure documents. Readers are cautioned that the foregoing list of factors is not exhaustive.

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, 2016 and the Company’s Management’s Discussion and Analysis prepared for the year ended December 31, 2016. The forward-looking statements contained in this news release are made as of the date hereof and the Company 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.


The information concerning Red Leaf (other than the terms of the acquisition of common shares of Red Leaf) contained in this press release has been provided by Red Leaf.  Although the Company has no knowledge that would indicate that any of such information is untrue or incomplete, the Company does not assume any responsibility for the accuracy or completeness of such information or the failure by Red Leaf to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to the Company.