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CALGARY, May 11, 2017 /CNW/ - Questerre Energy
Corporation ("Questerre" or the "Company") (TSX,OSE:QEC) announced
today that it has made a strategic investment in Red Leaf
Resources, Inc. ("Red Leaf"). Through an agreement with one of the
vendors, Whitehorn Resources Inc. ("Whitehorn"), Questerre also has
the option to acquire over 280 square km. prospective for oil shale
in the Kingdom of Jordan
("Jordan").
Michael Binnion, President &
Chief Executive Officer of Questerre, commented, "This investment
gives us a minority control block in Red Leaf. They now have over
US$100 million in cash and are
committed to their business plan of commercializing EcoShale
technology and supporting their license holders to develop their
projects. We will also have access to significant additional oil
shale resources in Jordan through
our agreement with Whitehorn."
He added, "Their recent engineering work with Questerre on the
use of coker drums as reusable capsules is encouraging for the
commercial development of our project in Jordan. Combined with the initial positive
results from testing our oil shale using the EcoShale process, this
investment could materially accelerate the timeline for our
economic feasibility work."
Adolph Lechtenberger, Chief
Executive Officer of Red Leaf, noted, "Commercializing the EcoShale
process remains our top priority. Over the last year, we have been
working with Questerre on their independently assessed
multi-billion barrel deposit in Jordan. This is a unique opportunity for both
our companies. Red Leaf is in a solid financial position and we
look forward to continuing our work to support Questerre in
developing this project."
Questerre reported that it has entered into agreements to
acquire 103,751 common shares of Red Leaf ("Common Shares")
representing approximately 25% of Red Leaf's outstanding Common
Shares. The first tranche of the acquisition for 82,015 Common
Shares closed earlier this week with the second tranche scheduled
to close later this month. On closing of the second tranche,
Questerre will hold approximately 30% of the common share capital
of Red Leaf. The acquisition price is US$60 per Common Share paid concurrently with the
applicable closing and a contingent payment of US$12.50 per Common Share subject to the
fulfillment of certain conditions.
The second tranche of the acquisition includes the option to
acquire Whitehorn. In addition to the Red Leaf Common Shares held
by Whitehorn, its assets include a Memorandum of Understanding
("MOU") with the Ministry of Energy and Mineral Resources in
Jordan granting Whitehorn the
exclusive right to explore for oil shale on 282 square km in the
Wadi Abu Al Hamam area. This acreage lies to the northwest of
Questerre's acreage. There are 30 core holes that have been drilled
on this acreage with yields of between 15 and 25 gallons per ton.
The term of the MOU was recently extended until 2019.
Questerre also announced that it has disposed of shallow
exploration rights over 960 net acres, primarily on its operated
acreage in the Kakwa area, for gross proceeds of $4.45 million and an overriding royalty.
Questerre continues to retain the rights to develop the
Montney formation on this acreage.
No reserve value was attributed to the disposed rights as at
December 31, 2016.
The Company also reported that it has been refunded
approximately $6 million following
the successful appeal of a summary judgment hearing in November 2016. The amounts relate to a claim by a
joint venture operator primarily relating to the costs of drilling
two wells in Quebec in 2010. The
operator has appealed this ruling and a hearing is scheduled for
early June 2017. A trial is currently
scheduled for late 2018 in respect of this matter.
Questerre Energy Corporation is leveraging its expertise gained
through early exposure to shale and other non-conventional
reservoirs. The Company has base production and reserves in the
tight oil Bakken/Torquay of
southeast Saskatchewan. It is bringing on production from its
lands in the heart of the high-liquids Montney shale fairway. It is a leader on
social license to operate issues for its Utica shale gas discovery in the St. Lawrence
Lowlands, Quebec. It is pursuing
oil shale projects with the aim of commercially developing these
significant resources.
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.
Advisory Regarding Forward-Looking Statements
This news release contains forward-looking statements and
information ("forward-looking statements") within the meaning of
applicable securities laws and is based on the expectations,
estimates and projections of management of the Company as of the
date of this news release, unless otherwise stated. The use of any
of the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends" and similar expressions are intended
to identify forward-looking statements. In particular and without
limitation, this news release contains forward-looking statements
concerning: the potential acquisition of Whitehorn Resources, Inc.,
the acceleration of the Company's economic feasibility work in
Jordan, the development of the
Jordan project, the timing of the
closing of the second tranche of Red Leaf shares and the timing of
the hearing and trial. Such forward-looking statements are provided
for the purpose of providing information about management's current
expectations and plans relating to the future. Investors are
cautioned that reliance on such information may not be appropriate
for other purposes, such as making investment decisions. Although
the Company believes that the expectations reflected in these
forward-looking statements are reasonable, undue reliance should
not be placed on them because the Company can give no assurance
that they will prove to be correct.
In respect of the forward-looking statements concerning the
anticipated benefits and completion of the acquisition of the Red
Leaf shares, the Company has provided such in reliance on certain
assumptions that it believes are reasonable at this time, including
assumptions as to the ability of each of the Company and
counterparties to satisfy, in a timely manner, the other conditions
to the closing of the acquisition of the Red Leaf shares, the
commercialization of EcoShale by Red Leaf, Red Leaf and Questerre
working together and advancing Questerre's project in Jordan; and expectations and assumptions
concerning, among other things: land tenure, commodity prices and
interest and foreign exchange rates; planned synergies, capital
efficiencies and cost-savings; applicable tax laws; future
production rates; the sufficiency of budgeted capital expenditures
in carrying out planned activities; the availability and cost of
labour and services, the success of growth projects; future
operating costs; that counterparties to material agreements will
continue to perform in a timely manner; that there are no
unforeseen events preventing the performance of contracts; and that
there are no unforeseen material construction or other costs
related to current growth projects or current operations.
Since forward-looking statements address future events and
conditions, by their very nature they involve inherent risks and
uncertainties, including but not limited to: failure to realize the
anticipated benefits of the acquisition of Red Leaf Shares, whether
the Company's exploration and development activities respecting its
prospects will be successful or that material volumes of petroleum
and natural gas reserves will be encountered, or if encountered can
be produced on a commercial basis; the ultimate size and scope of
any hydrocarbon bearing formations on its lands; that drilling and
other operations on its lands will be successful such that further
development activities in these areas are warranted; that the
Company will continue to conduct its operations in a manner
consistent with past operations; results from drilling and
development activities will be consistent with past operations; the
general stability of the economic and political environment in
which the Company operates; drilling results; field production
rates and decline rates; the general continuance of current
industry conditions; the timing and cost of pipeline, storage and
facility construction and expansion and the ability of the Company
to secure adequate product transportation; future commodity prices;
currency, exchange and interest rates; regulatory framework
regarding royalties, taxes and environmental matters in the
jurisdictions in which the Company operates; the ability of the
Company to successfully market its oil and natural gas products;
changes in commodity prices; changes in the demand for or supply of
the Company's products; unanticipated operating results or
production declines; changes in tax or environmental laws, changes
in development plans of the Company or by third party operators of
the Company's properties, increased debt levels or debt service
requirements; inaccurate estimation of the Company's oil and gas
reserve and resource volumes; limited, unfavourable or a lack of
access to capital markets; increased costs; a lack of adequate
insurance coverage; the impact of competitors; and certain other
risks detailed from time-to-time in the Company's public disclosure
documents. Readers are cautioned that the foregoing list of factors
is not exhaustive.
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, 2016 and the Company's
Management's Discussion and Analysis prepared for the year ended
December 31, 2016. The
forward-looking statements contained in this news release are made
as of the date hereof and the Company 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.
The information concerning Red Leaf (other than the terms of the
acquisition of common shares of Red Leaf) contained in this press
release has been provided by Red Leaf. Although the Company
has no knowledge that would indicate that any of such information
is untrue or incomplete, the Company does not assume any
responsibility for the accuracy or completeness of such information
or the failure by Red Leaf to disclose events which may have
occurred or may affect the completeness or accuracy of such
information but which are unknown to the Company.
SOURCE Questerre Energy Corporation