Liquids-rich Montney natural gas resource play with exceptional economics
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The Kakwa area is situated approximately 75 kilometres south of Grande Prairie in west central Alberta.

Capital investment in Kakwa totalled $11 million for the 2022 year (2021: $3.2 million) with daily production averaging 1,404 boe/d (2021: 1,174 boe/d) comprising of 4.2 MMcf/d of natural gas (2021: 3.5 MMcf/d) and 720 bbl/d of condensate and natural gas liquids (2021: 589 bbl/d). Total proved and probable reserves as of December 31, 2022, were estimated at 28.4 MMBoe (2021: 31.5 MMBoe) with a before tax NPV-10% of $247.2 million (2021: $234.2 million). The Company currently holds 40,960 (18,020 net) acres in the Kakwa area.

At Kakwa Central, the operator completed and tied-in three (0.75 net) wells during 2022. Questerre holds a 25% interest in these wells. The operator subsequently spud two wells including one in the first quarter of this year. Questerre elected to participate in only one of these two wells. Gross production from this well for the second quarter of 2023 averaged 1,145 boe/d consisting of 3.2 MMcf/d of natural gas and 620 bbls/d of condensate and natural gas liquids. While the initial rates are encouraging, they are not indicative of the long-term performance or ultimate recovery.

Effective the end of the third quarter last year, the operator of Kakwa North advised that it had recovered 100% of the capital and operating costs associated with the initial four farm-in wells. The Company subsequently elected to convert its 5% royalty interest in these wells to a 50% working interest.

The Company plans to participate in the drilling programs at Kakwa North and Kakwa Central subject to, among other things, commodity prices and the costs and design of the proposed drilling and completion programs.