Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — Investor Presentation (December 2013)
37 slides from Questerre Energy Corporation Class A's investor presentation, December 2013
Slide 1: Corporate Presentation
CORPORATE PRESENTATION
Slide 2: Outline
OUTLINE 1. Company Strategy 2. Light Oil Bakken/Torquay, Antler, Saskatchewan 3. Liquids-Rich Montney, Kakwa-Resthaven, Alberta 4. Oil Shale 5. St. Lawrence Lowlands, Quebec 6. Outlook
Slide 3: Company Strategy
COMPANY STRATEGY Leverage extensive tight rock/shale rock expertise to acquire tight resources early and develop reserves • First mover in shale gas –acquired acreage in Quebec almost 5 years ahead of industry • Invited speakers at domestic and international conferences and authors of technical pape
Slide 4: Value Creation
VALUE CREATION Portfolio to create value in the short, medium, and long term
Slide 5: Asset Overview
ASSET OVERVIEW Southeast Saskatchewan Proven Bakken/Torquay tight oil production with strong netbacks Western Alberta Liquids-rich Montney natural gas resource play with exceptional economics Utah & Wyoming Oil shale commercialization project in Utah with Total S.A. and Red Leaf Early stage oil shal
Slide 6: Financial Overview
FINANCIAL OVERVIEW Operating and Financial Results Capitalization and Liquidity For the 9 months ended September 30, 2013 $4.7 million (Nov. 18, 2013) 340 million Nil $10.3 million 24,129,017 10% 211,168,521 90% 900 235,297,538 75% $75.70 (average exercise price $2.07/share) 16,956,000 $54.07 1,163,
Slide 7: Antler
ANTLER
Slide 8: Antler
ANTLER Established tight oil asset targeting Bakken/Torquay resource play High value reserves Sweet Spot NPV-10/bbl of $38.27/bbl based on 2P reserves of 1.9 million barrels and $75.3 million NPV-10 as at December 31, 2012(1) 2013 YTD netbacks of ~$72/bbl based on $95/bbl realized oil prices • Avera
Slide 9: Waterflood
Questerre Pool WATERFLOOD Secondary recovery scheme has been successfully applied in adjacent Bakken/Torquay pool in Manitoba with a projected increase in recovery from Adjacent Pool 9% to between 16% - 24% • Low energy reservoir (very limited gas/water drive) at Antler makes it an ideal candidate f
Slide 10: Waterflood
Questerre Pool WATERFLOOD Secondary recovery scheme has been successfully applied in adjacent Bakken/Torquay pool in Manitoba with a projected increase in recovery from Adjacent Pool 9% to between 16% - 24% • Low energy reservoir (very limited gas/water drive) at Antler makes it an ideal candidate f
Slide 11: Kakwa-Resthaven
KAKWA-RESTHAVEN
Slide 12: Liquids-Rich Montney
LIQUIDS-RICH MONTNEY 2,500 boe/d discovery well creates new core area for Questerre in west central Alberta • Montney play is approximately 500 km long by 90 km wide • One of the largest oil and gas fields in world • Gas, oil and liquids- rich windows similar to Eagleford shale in Texas • Developmen
Slide 13: The Sweet Spot
THE SWEET SPOT Sweet spot of the play is overpressured, liquids-rich area • High liquids, particularly condensate key to robust play economics Questerre has built a significant land position in the sweet spot of this fairway • Acquired 72 gross sections with a ~90% working interest (58 net sections)
Slide 14: Area Activity
27 36 26 28 35 AREA ACTIVITY 1. Paramount (Karr-Gold Creek) 17. Celtic (02-07) 13.4MMcf/d + 670 bbl/d 10.2MMcf/d + 437 bbl/d 37 2. NuVista (02-01) 18. Cequence (11-27) 34 4.4MMcf/d + 231 bbl/d 1MMcf/d + 60 bbl/d 3. 7G & Celtic (01-29) 19. QEC (5-23) 29 4.7MMcf/d + 1,209 bbl/d 3.7 MMcf/d + 815 bbl/d
Slide 15: Proven Development Area
Wellhead Condensate Rate – bbls/MMcf PROVEN DEVELOPMENT AREA First three wells have tested at rates of 2,500 to 1,800 boe/d with over 40% condensate Liquids rates from first wells have averaged 140-190 bbls/MMcf over 2013 Economic Sensitivities • Gas production has been constrained by lack of facili
Slide 16: Industry Activity
vis Resthaven - Montney ‘Shallowecut Gas Plant: Average Liquids @ 60 blsimmct (72% O54) Range i 4 (Jayar to Kelora Kar rs —_ INDUSTRY ACTIVITY ExxonMobil Buying Celtic For $3.1 Billion In Rare Western Canada Acquisition oy Paocne "oo bee py ef an ar pars ag re coped seth Vaden Carats Caestees Cel Es
Slide 17: Industry Activity
INDUSTRY ACTIVITY Paramount Expanding Capacity To Mandle Three Times Curent Company Ouput Paramount Expanding Capacity To Handle Three Times Current Company Output By PatRoche Paramount Resources Ltd's processing capacity will total 73,000 bow a day once projects at its Musreau and Resthaven propert
Slide 18: Industry Activity
INDUSTRY ACTIVITY Compelling Economics Now \ sere 208 ws Ae Seen to exceptional cor DAILY OIL BULLETIN as he Oat Ala eth Eton new vai Prato Digan Cx here toe oy NuVista Announces $95 Million Equity Financing; Expanded Wapiti Montney Capital Program NuVista Announces $95 Million Equity Financing; Exp
Slide 19: Growth Potential
GROWTH POTENTIAL Questerre wells have targeted upper two prospective intervals in the Montney • Industry reported results from other interval indicates they are just as productive • Partners reported offsetting well tested at 100 bbls/MMcf from upper interval in Montney • Further potential exists in
Slide 20: Resource Assessment
RESOURCE ASSESSMENT Best estimates of 31.7 million boe of contingent resources and 99.7 million boe of prospective resources have been assigned to two intervals on approximately one third of Questerre’s total acreage • NPV-10 for best estimate of economic contingent resources estimated at ~$8.40 per
Slide 21: Market Access
MARKET ACCESS New energy paradigm makes access to 140 bbl @ ~$100/bbl customers a critical path item (90%-100%+ of WTI/bbl) 5 bbl @ ~$100/bbl Questerre strategy is to secure access (90%-100%+ of WTI/bbl) to all aspects of value chain • Processing facilities for natural gas, pipelines for 15 bbl @ ~$
Slide 22: Ramping Up Development
RAMPING UP DEVELOPMENT Production and cumulative cash flow Illustrative development scenario based on 20 MMcf/d + liquids of firm processing capacity Initial capital investment of $80 million-$100 million required in 2014/2015; NPV-10 $430 million with Production and net wells drilled production of
Slide 23: Accelerating Development
ACCELERATING DEVELOPMENT Illustrative development Production and cumulative cash flow scenario based on 40 MMcf/d + liquids of capacity • 20 MMcf/d firm capacity and 20 MMcf/d on interruptible basis Initial capital investment of $120 million-$150 million Production and net wells drilled required in
Slide 24: Looking Forward
LOOKING FORWARD Participate with partners in up to one additional well in 2013 and up to six initial wells in 2014 Move up learning curve to improve drilling and completion techniques Spud 100% WI well to prove up liquids potential (upside acreage) Secure development capital through asset sales or p
Slide 25: Oil Shale
OIL SHALE
Slide 26: Oil Shale
OIL SHALE Major resource on cusp of commercial development • Estimated 2.8-3.1 trillion barrels in place worldwide with 2.1 trillion located in the United States(1) Questerre has an indirect interest in a US$400 million joint venture with Total S.A. and Red Leaf Resources, a private company, to unlo
Slide 27: Eco-Shale
ECO-SHALE Innovative approach that moves the process to the rocks instead of moving the rocks to the process • Incorporates benefits and avoids challenges of both surface and subsurface processes Dramatically improves economics • Modeling indicates economics are better than oil sands projects with s
Slide 28: Questerre Projects
Pasquia Hills, Saskatchewan QUESTERRE PROJECTS 100% interest in ~39,000 high-graded acres at Pasquia Hills Wyoming SASKATCHEWAN 20% interest in 5,120 acre farm-in with Red Leaf holding an 80% interest Drilled 16 wells in 2012 Approximately 30-45 m of good quality shale encountered in all wells drill
Slide 29: St. Lawrence Lowlands
ST. LAWRENCE LOWLANDS
Slide 30: St. Lawrence Lowlands
ST. LAWRENCE LOWLANDS • Best estimate of 18 Tcf of prospective resource on acreage – 4.4 Tcf net to Questerre(1) • Premium gas market • Tenure recently extended to 2021 • Environmental assessment underway • (1) Netherland, Sewell & Associates Assessment as of November 1, 2009
Slide 31: Recent Developments
RECENT DEVELOPMENTS • Questerre continues its work on communicating benefits of development to Quebecers • Organized second tour of Quebec farmers to Alberta with positive feedback from farmers • Debate is slowly shifting from “if” to “how” oil and gas development could happen • Initial focus is on
Slide 32: Outlook
OUTLOOK
Slide 33: Outlook
OUTLOOK Implement waterflood in Antler, Saskatchewan to maximize recovery of oil in place Drill one 100% well on southern block in Kakwa-Resthaven area Drill up to six more (1.50 net) wells in north Kakwa-Resthaven Commence field work for commercial scale capsule in Utah for year-end Prepare for rel
Slide 34: Management & Board
MANAGEMENT & BOARD Board Management Les Beddoes, Jr. Michael Binnion, President & Chief Executive Officer International explorationist John Brodylo, VP Exploration (Nexen) Former VP Exploration, Bow Valley Energy Inc.; Victoria, BC Michael Binnion, President & Chief Executive Officer Peter Coldham,
Slide 35: Forward-Looking Information
FORWARD-LOOKING INFORMATION This presentation contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" an
Slide 36: Forward-Looking Information
FORWARD-LOOKING INFORMATION The forward-looking information and statements included in this presentation are not guarantees of future performance and should not be unduly relied upon. Such information and statements; including the assumptions made in respect thereof, involve known and unknown risks,
Slide 37: Contact details
www.blog.questerre.com www.facebook.com/Questerre Twitter: @Questerre_utica 1650 AMEC Place 801 Sixth Avenue SW Calgary, Alberta T2P 3W2 Canada Tel: (403) 777 1185 / Fax: (403) 777 1578
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