Questerre reports second quarter 2021 results

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August 11, 2021 – Questerre reports second quarter 2021 results

Calgary, Alberta — Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) reported today on its financial and operating results for the second quarter ended June 30, 2021.

Michael Binnion, President and Chief Executive Officer, commented, “We took advantage of higher prices to reduce net debt in the first half of the year. Our net debt stands at under $2 million compared to approximately $8 million at year-end. Although capital spending has been limited to date, if prices remain strong, we could see additional drilling at Kakwa late this fall or early winter.”

He added, “During the quarter, we also began work on the carbon dioxide recycling and storage elements for the circular economy in Quebec. These are essential to reducing not only the emissions from production but also usage of our clean gas. We are planning for permits for a small-scale project to demonstrate this storage potential later this year.”


  • Assessing carbon dioxide storage project as first phase of Clean Tech Energy project in Quebec
  • Average daily production of 1,479 boe/d with adjusted funds flow from operations of $4.2 million

Consistent with prior periods, Kakwa continued to account for 80% of corporate production. With no new drilling at Kakwa since the spring of 2020, production declined over the prior year. For the second quarter, daily production averaged 1,479 boe/d (2020: 2,058 boe/d) and for the six months ended June 30, 2021, it averaged 1,579 boe/d (2020: 2,068 boe/d).

The improvement in commodity prices over the same period last year materially improved revenue and adjusted funds flow from operations in 2021. For the quarter, petroleum and natural gas sales increased to $7.1 million from $3.4 million last year and $14.1 million year to date from $10.4 million in the prior year. The higher revenue contributed to adjusted funds flow from operations of $4.2 million (2020: $0.2 million) in the quarter and $7.1 million for the first six months of the year (2020: $2.7 million) (1).

The higher revenue also contributed to net income of $2.9 million for the quarter (2020: $2.7 million loss) and $3.8 million (2020: $117 million loss) for the first half of the year. In the prior year, the year-to-date loss reflects the impairment expense of $113 million incurred in the first quarter largely because of the lower future oil prices. Capital expenditures in the quarter were $0.5 million (2020: $0.5 million) and $0.9 million year to date (2019: $3.4 million).

The Company also reported on the pending renewal of its credit facility with a Canadian chartered bank. Following a preliminary review conducted in the second quarter, the Company anticipates its $17 million revolving operating demand facility will be reduced to $16 million and its uncommitted non-conforming revolving facility of $3 million will be terminated. The renewal will take effect upon receipt of the final requisite approvals in the third quarter.

The effective interest rate on the facility for the first half of 2021 was 3.45% (2020: 3.58%). As at June 30, 2021, $12 million was drawn on the facility and the Company held unrestricted cash and term deposits of $10.3 million. Including amounts drawn under the facility, the Company had a net working capital deficit of $1.2 million (2020: $9.3 million).

The term “adjusted funds flow from operations” and “working capital deficit” are non-IFRS measures. Please see the reconciliation elsewhere in this press release.

Questerre is an energy technology and innovation company. It is leveraging its expertise gained through early exposure to low permeability reservoirs to acquire significant high-quality resources. We believe we can successfully transition our energy portfolio. With new clean technologies and innovation to responsibly produce and use energy, we can sustain both human progress and our natural environment.

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 certain statements which constitute forward-looking statements or information (“forward-looking statements”) including the Company’s view that additional drilling could recommence at Kakwa in the next six to nine months, that carbon dioxide recycling and storage are essential to reducing emissions from storage and production and the Company’s plans for a small-scale project later this year.”

Forward-looking statements are based on a number of 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: the effect of COVID-19 on the markets and the demand for oil and natural gas; 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, 2020, and other documents available on the Company’s profile at 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.

Certain information set out herein may be considered as “financial outlook” within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Questerre’s reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.

(1) For the three-month period ended June 30, 2021, liquids production including light crude and natural gas liquids accounted for 887 bbl/d (2020: 1,352 bbl/d) and natural gas including conventional and shale gas accounted for 3,549 Mcf/d (2020: 4,238 Mcf/d). For the six-month period ended June 30, 2021, liquids production including light crude and natural gas liquids accounted for 929 bbl/d (2020: 1,370 bbl/d) and natural gas including conventional and shale gas accounted for 3,898 Mcf/d (2020: 4,190 Mcf/d).

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 “adjusted funds 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, adjusted funds 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 adjusted funds flow from operations may not be comparable to that reported by other companies. Questerre considers adjusted funds 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.

Three Months June 30, Six Months June 30,

($ thousands)
2021 2020            2021           2020
Net cash from (used in) operating activities3,006(791)6,0853,770
Interest received(48)(34)(98)(172)
Interest paid123144256331
Change in non-cash operating working capital1,143887866(1,263)
Adjusted Funds Flow from Operations4,2242067,1092,666

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