CALGARY, ALBERTA--(Marketwire - Aug. 12, 2011) -
NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSE:QEC) reported today on its financial and operating results for the second quarter of 2011.
Michael Binnion, President and Chief Executive Officer, commented, "With the shale gas environmental assessment underway in Québec, we shifted our short term strategy to unconventional oil. Accelerating development of our Antler asset will be our first priority, both through organic growth and accretive acquisitions."
Mr. Binnion added, "Although it will take longer than we expected, commercializing our Utica shale gas discovery remains our main long term priority. While the government assesses the potential environmental impacts and develops new regulations, we will focus on communications with stakeholders to secure our social license to operate."
Production averaged 586 boe/d (2010: 620 boe/d) as spring break up and the sale of Beaver River lowered volumes in the second quarter of 2011. By comparison, production in the first quarter of 2011 was 650 boe/d. The Company's oil weighting remained relatively stable over the first half of the year at approximately 70%.
Higher oil prices in the quarter leveraged our increased oil weighting and improved revenue over the prior periods. Petroleum and natural gas revenue in the second quarter was $4.14 million (2010: $2.81 million) as compared to $3.97 million in the first quarter of 2011. Improving netbacks contributed to cash flow from operations of $2.27 million (2010: $0.19 million) compared to $1.64 million in the prior quarter.
As at June 30, 2011, the Company reported a working capital surplus of $131.31 million.
The term "cash flow from operations" is a non-GAAP measure. Please see the reconciliation elsewhere in this press release.
Questerre Energy Corporation is an independent energy company focused on unconventional oil and gas projects. The Company is developing a portfolio of light oil assets primarily in Saskatchewan. The Company is also leveraging its expertise to commercialize its Utica shale gas discovery in the St. Lawrence Lowlands, Québec. Questerre is committed to the economic development of its resources in an environmentally conscious and socially responsible manner.
This news release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the scope and timing of future operations in Québec and Saskatchewan. Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to the Company. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking statements. As such, readers are cautioned not to place undue reliance on the forward looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
This news release does not constitute an offer of securities for sale in the United States. These securities may not be offered or sold in the United States absent registration or an available exemption from registration under the United States Securities Act of 1933, as amended.
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 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.
This press release contains the terms "cash flow from operations" and "netbacks" which are non-GAAP terms. Questerre uses these measures to help evaluate its performance.
As an indicator of Questerre's performance, cash 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 cash flow from operations may not be comparable to that reported by other companies. Questerre considers cash 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.
Cash Flow from Operations Reconciliation
|For the three months ended June 30,||2011||2010|
|Cash flows from operating activities||$||3,247,212||$||(484,182||)|
|Net change in non-cash operating working capital||(979,536||)||674,199|
|Cash flow from operations||$||2,267,676||$||190,017|
The Company considers netbacks a key measure as it demonstrates its profitability relative to current commodity prices. Operating netbacks per boe equal total petroleum and natural gas revenue per boe adjusted for royalties per boe and operating expenses per boe.
The Company also uses the term "working capital surplus". Working capital surplus, as presented, does not have any standardized meaning prescribed by GAAP and may not be comparable with the calculation of similar measures for other entities. Working capital surplus, as used by the Company, is calculated as current assets less current liabilities excluding the current portion of the share based compensation liability.