Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — Investor Presentation (June 2005)
33 slides from Questerre Energy Corporation Class A's investor presentation, June 2005
Slide 1: Corporate Presentation
Corporate Presentat ion Questerre June 2005 Energy Corporation
Slide 2: Portfolio Overview
Portfolio Overview • Growth in four producing areas in British Columbia and Alberta underpins company cash flow and market value • Several high impact wells in Canadian frontier assets with upside potential to achieve 20,000 boe per day by 2010 • Risk reduction strategy through selective partnership
Slide 3: Projects
Projects • Southern and Central Alberta – plays prospective for multiple horizons – small production but low cost with high net backs of $25 - $30 per barrel • Beaver River Field Shallow Zone, Beaver River British Columbia – multiple sands tested but never produced - lower cost and easier to put on
Slide 4: Excellent Market Conditions
Excellent Market Conditions • Canada is #1 supplier of oil and gas to US • North American pipeline network allows Canada to receive US pricing • Canadian production has exceeded new discoveries for several years • Strong demand and limited supply leads to high prices • Reserves in Canada are some of
Slide 5: Management & Directors
Management & Directors • Management has extensive experience in large scale international E&P projects, unconventional reservoirs and conventional Alberta production • Management and Directors have invested approximately C$12 million and own 26% of the Company • Clay Riddell, Chairman and controllin
Slide 6: Why Secondary Listing on Oslo Bors
Why Secondary Listing on Oslo Bors • Investors in Norway are well versed with energy sector – Particular understanding of high impact exploration and development projects • Limited number of exploration and production companies on Oslo Bors – Window on the junior markets in Canada for retail and ins
Slide 7: Alberta, Canada
Alberta, Canada
Slide 8: Alberta
Alberta Central Alberta Westlock Southern Alberta Vulcan Southern Alberta Parkland
Slide 9: Illustrative Production Profile
Illustrative Production Profile • Existing corporate production of 130 boe per day • First quarter drilling tested at 170 boe per day • Participating in seven wells this summer • Multiple follow-on drilling locations identified on Company lands • Guidance of 500 boe per day by year end; 1,000 by 200
Slide 10: Parkland Area
Parkland Area • Plays well defined by a 3-D seismic survey covering over 64 square kilometers • Primary plays are prospective for 0.2 – 0.8 million boe (1-5 Bcf) per well • Questerre currently holds a 50% interest in 960 hectares sections of land • Discovery well tested, to be re-stimulated this sum
Slide 11: Vulcan Area
Vulcan Area • Questerre currently holds a 50% interest in 1,280 hectares • Total well costs approximately $0.65 million dry & abandoned • Two discovery wells drilled and tested to date • Follow up locations to be pursued • Farm-in agreements made on 1,536 hectares
Slide 12: Westlock Area
Westlock Area • Acquired 30% interest in 3,328 hectares of land plus production • Successful gas well to be tested in Q2 • One 100% well and two 30% wells to be drilled this summer • Several undrilled locations
Slide 13: New Project Acquisition Criteria
New Project Acquisition Criteria • Purchase price of NPV 10% based on proved producing reserves • Bias toward natural gas • Multi horizon potential • Undrilled land holdings • Proximity to pipeline and under utilized processing facilities
Slide 14: Beaver River Field, British Columbia
Beaver River Field British Columbia
Slide 15: Beaver River Field
Beaver River Field • Gas in 6 to 10 shallow sands tested by Amoco but too small to produce in 1970’s • Re-processed 3D seismic mapping shows potential for significant gas reserves volumetrically • Deeper horizon with over 1.2 Tcf OGIP; remaining recoverable gas estimated at 20 – 90 million boe • Inf
Slide 16: Farmout Agreement
Farmout Agreement • Transeuro Energy acquired the option to earn in the Beaver River Field for C$30.3 million • Transeuro will fund and operate the drilling program utilizing modern completion techniques • Initial phase will focus on shallow Mattson sands – four re- entries estimated at C$10 million
Slide 17: Field Potential
Field Potential Proposed c-74-K Mattson 25-68 Bcf Mattson – 40-67 Bcf 6-10 Bcf Mattson 4-8 Bcf 2-4 Bcf 8-14 Bcf Mattson 9-18 Bcf 1.5 Bcf 1-2 Bcf Nahanni -35 Bcf Nahanni - 20 Bcf Reserve estimates only for scoping purposes
Slide 18: Mattson Potential
Mattson Potential • 6-10 sandstone zones tested by Amoco in 1970s but not produced • 10 locations identified based on well test data correlated to seismic mapping • 0.4 million boe (2.4 bcf) in probable reserves assigned to a single zone in a single well • Questerre to retain 50% interest through 5
Slide 19: Nahanni Potential
Nahanni Potential • 6 new compartment locations identified on reprocessed 3-D seismic survey • 3 infill locations based on coning • 20 million boe (120 bcf) in possible reserves • 90 million boe (540 bcf) in resource potential • Questerre to retain 50% interest through 1 option well
Slide 20: St. Lawrence Lowlands, Quebec
St. Lawrence Lowlands Quebec
Slide 21: St. Lawrence Lowlands
St. Lawrence Lowlands • Large land position of over Quebec 700,000 acres in centre of St. Lawrence Lowlands basin • Primary play is analogous to Appalachian Basin with reserves of approx. 10 Bcf per well • Talisman currently producing New York 18,000 boe per day from Numerous Talisman discoveries wi
Slide 22: Technical Overview
Technical Overview • Hydrothermally dolomitized reservoir • Primary zone is Trenton- Black River at 1,900 to 2,200 meters • Extensive seismic database over 3,000 km • Regional mapping of fault trends • Waveform analysis of porosity anomalies shows dozens of drillable anomalies
Slide 23: Excellent Fiscal Terms
Excellent Fiscal Terms • Drilling costs per well: $3.5 million (single well) $2.5 million (multi well program) • Equip & Tie-in per well: $0.5 million • Initial Tie-in: $2.5 million • Pricing per mcf: $7.50 (AECO + $1.00 in summer) $8.50 (AECO + $2.00 in winter) • Royalties: 12.50% • Trans & Process
Slide 24: New High Impact Project Criteria
New High Impact Project Criteria • Ability to leverage expertise in unconventional reservoirs • Control of play available through large land position • Proximity to infrastructure • Ability to add value by high grading prospects for farmout • Scalable with low initial investment • Significant techni
Slide 25: Corporate Overview
Corporate Overview
Slide 26: Restructuring
Restructuring • Questerre believes that its major well at the Beaver River Field in 2004 missed the targeted structure due to seismic processing errors • Questerre believes that the seismic processing company neglected to follow its own prescribed processing sequences, resulting in errors in the pro
Slide 27: Board of Directors
Board of Directors • Les Beddoes, Jr. – International Exploration - Former VP Exp for Bow Valley Industries, Victoria, BC • Michael Binnion, President & Chief Executive Officer • Russ Hammond – Corporate Finance - Former Managing Director, Greenwell Montague, London, UK • David Mallory, Interim Chie
Slide 28: Management
Management • Michael Binnion, President & Chief Executive Officer • John Brodylo, VP Exploration (Nexen) • Wayne Hauck, Geophysicist (Murphy Oil, Philips) • Al Albertson, Drilling & Production Engineer (EnCana) • Maria Rees, Corporate Secretary (CanArgo, Flowing) • Richard Mindus, Operations Manager
Slide 29: Share Capitalization
Share Capitalization Directors, Officers & Employees 14,964,241 15% Terrenex Acquisition Corporation10,648,785 11% Clay Riddell/Paramount Oil & Gas 7,435,500 7% VPS Shareholders (excluding insiders)38,992,80639% Float 27,835,572 28% Total 99,876,904 Options (Avg. exercise price $0.28) 6,445,000 Conv
Slide 30: 2004 Financial Summary
2004 Financial Summary • Daily Production 130 boe per day • Revenue C$1.64 million • Net Income C$0.69 million • Working Capital C$2.76 million
Slide 31: 2005 Corporate Objectives
2005 Corporate Objectives • Secure secondary listing on OSE and complete C$5 - C$10 million offering • 2005 exit production target of 500 boe per day; increase of 370 boe per day from Alberta properties by year end • Commence shallow drilling project at Beaver River with Transeuro Energy this summer
Slide 32: Questerre Investment Case
Questerre • Investment Case Conventional base of production in Alberta underpins current value Strong • Beaver River shallow gas project could double production this well year balanced • Beaver River deep gas project could multiply market value portfolio • Quebec exploration success would transform
Slide 33: Contact details
1580 Guinness House 727 Seventh Avenue SW Calgary, Alberta T2P 0Z5 Canada Tel : (403) 777-1185 Fax : (403) 777-1578 Web: www.questerre.com Email : [email protected]