Questerre reports second quarter 2022 results

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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, 2022.

Michael Binnion, President, and Chief Executive Officer, commented, “During the quarter, three new Kakwa wells were brought on production. Leveraging the strong commodity prices, we recorded adjusted funds flow from operations of over $12 million for the period.”

Commenting on Quebec, he added, “Protecting our legal rights is our top priority after the Government of Quebec announced its plans to enact Bill 21 and revoke our licenses without meaningful compensation. We filed our primary claim in the Superior Court of Quebec this winter. Our litigation counsel recently engaged one of the Big 4 accounting firms as an expert witness to quantify our damages. Based on the value of the multi-Tcf discovery, we expect this claim will be substantially larger than the notional $100 million the Government has suggested as a settlement. We are also supporting other stakeholders including First Nations and Quebec royalty holders to ensure their rights are also protected against the Government’s actions.”

Reporting on the Company’s 40% investment in Red Leaf, he added, “They also made progress on their new technology with a successful third-party review completed early in the third quarter. The granting of the final permit for a short line railroad that terminates on their land is also very good news for Red Leaf and its refinery permit in the Uinta Basin in Utah.”


  • Average daily production of 1,909 boe/d(1) and adjusted funds flow from operations of $12.2 million for the quarter
  • Government of Quebec announces plans to enact Bill 21 and revoke exploration licenses
  • Red Leaf completes third-party engineering validation of new design

Consistent with prior periods, Kakwa continued to account for 80% of corporate production. With three (0.75 net) wells brought on production in the quarter, production increased materially over the prior year. For the second quarter, daily production averaged 1,909 boe/d (2021: 1,479 boe/d) and for the six months ended June 30, 2022, it averaged 1,600 boe/d (2021: 1,579 boe/d).

The improvement in commodity prices over the same period last year materially improved revenue and adjusted funds flow from operations in 2022. For the quarter, petroleum and natural gas sales increased to $17 million from $7.1 million last year and $26.6 million year to date from $14.1 million in the prior year. The higher revenue contributed to adjusted funds flow from operations of $12.2 million (2021: $4.2 million) in the quarter and $16.5 million for the first six months of the year (2021: $7.1 million).

The higher revenue also contributed to net income of $9.1 million for the quarter (2021: $2.9 million) and $11.5 million (2021: $3.8 million) for the first half of the year. Capital expenditures in the quarter were $2.8 million (2021: $0.5 million) and $7.8 million year to date (2021: $0.9 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 $16 million revolving operating demand facility will remain unchanged at $16 million. 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 2022 was 4.08% (2021: 3.45%). As at June 30, 2022, effectively no amounts were drawn on the facility and the Company held unrestricted cash and term deposits of $13.8 million. The Company had a net working capital surplus of $10.6 million (2021: $1.2 million deficit).

The term “adjusted funds flow from operations” and “working capital surplus (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 plans to protect its legal rights in Quebec, its expectations that the claim will be substantially larger than the notional amount proposed by the Government of Quebec, its support for other stakeholders and its views on the potential impact of the final railroad permit on Red Leaf’s refinery permit.

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: the implementation of Bill 21 by the Government of Quebec 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, 2021, 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, 2022, liquids production including light crude and natural gas liquids accounted for 1,157 bbls/d (2021: 887 bbls/d) and natural gas including conventional and shale gas accounted for 4,510 Mcf/d (2021: 3,549 Mcf/d). For the six-month period ended June 30, 2022, liquids production including light crude and natural gas liquids accounted for 987 bbls/d (2021: 929 bbls/d) and natural gas including conventional and shale gas accounted for 3,682 Mcf/d (2021: 3,898 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 surplus (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.

($ thousands)Three months ended June 30, 2022Three months ended June 30, 2021Six months ended June 30, 2022Six months ended June 30, 2021
Net cash from operating activities$ 10,162$ 3,006$ 15,066$ 6,085
Interest received(69)(48)(108)(98)
Interest paid1012339256
Change in non-cash operating working capital2,0801,1431,476866
Adjusted Funds Flow from Operations$ 12,183$ 4,224$ 16,473$ 7,109

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