Corporate Presentation Pareto Oil & Offshore Conference August 31 September 1, 2011
Presentation outline Company Overview Unconventional Oil Antler, Saskatchewan St. Lawrence Lowlands, Quebec Investment Summary 2
Company overview Near term focus on creating value through unconventional oil opportunities Established new ventures team with core competency in shale Focus on scalable, high-impact resource projects 45,000 net acres for light oil…
Asset overview St. Lawrence Lowlands, Quebec Giant Utica shale gas discovery being commercialized with partners Lorraine shale upside Southeast Saskatchewan/Manitoba Proven Bakken/Torquay light oil resource style play with cash…
Financial overview Operating and Financial Results Quarter ended June 30 2011 2010 Working capital () 131 million 160 million Debt Nil Nil Cash Flow from operations () 2.2 million 0.2 million Production (boe/d) 586 620 Oil weighting…
Unconventional Oil 6
Unconventional oil Oil resource plays with low permeability, low porosity and running room Tight oil, shale oil, oil shale Superior economics to unconventional gas with less geological risk than conventional oil exploration New…
Unconventional oil strategy Target resources with over 100 million barrels of oil in place Early stage domestic and international opportunities Evaluate new processes and technology to profitably extract oil while minimizing…
Executing the strategy Questerre is an early leader in shale Internal expertise and core competencies beyond typical juniors Hired pioneer in shale gas development in North America, Dr. Basim Faraj for new ventures team Have…
Antler, Saskatchewan 10
Antler Overview A core area for Questerre High margin, light oil asset targeting Torquay/Bakken resource play Average royalties of 6% and operating costs of approximately 10/bbl Developing and expanding existing oil pool with…
Antler Key statistics Infill and step out locations 42 Exploration acreage (sections) 60 2P Reserves (million bbls) 1.4 2010 Recycle ratio 2.5 (2P Reserves including future capital) 2010 Netbacks per barrel 63.12 (2010…
Production results to date 100.00 90.00 80.00 A verage P ro d u c tio n Rate (b b l/d ) 70.00 60.00 50.00 40.00 30.00 Template Well Short Horizontal 20.00 Poor Completion 10.00 Well not fracd 0.00 0 2 4 6 8 10 12…
2011 summer operating conditions 14
Accretive acquisitions Completed acquisition of producing assets and exploration acreage for 13.25 million in July 2011 Approximately 100 bbl/d of production from four vertical wells and two horizontal wells 2P Reserves 419 Mboe…
Antler Developing a core area Goal is to increase production to 2,000 bbl/d during SEA in Quebec Move from 1 rig to 2 rigs + contract frac crew for 2012 Plan for 10-15 wells per rig per year depending on weather, equipment and…
St. Lawrence Lowlands, Quebec 17
St. Lawrence Lowlands Where Quebec is currently BAPE Royalty regime Legislation Social acceptability Where Questerre is currently Path to commercialization Whats next for Quebec Prerequisites for development Aerial view…
Where Quebec is currently 19
BAPE BAPE mandates multi-stakeholder committee to oversee strategic environmental assessment (SEA) European approach as opposed to North American approach BAPE says no fracture stimulation during environmental assessment…
Interim regulations Interim regulations require operators to inform and consult with public prior to commencing operations Questerre does this already MDDEP may have representatives participate as observers in process New, but…
Legislation Clear from BAPE study and royalty report that Quebec is working to create an oil and gas regime Qubec is not relying on industry experience so it will take time to independently develop their own expertise 6 million…
Social acceptability Industry is disconnected from the public Financial intermediation separates producers from consumers Risk management industry accustomed to moving capital from one jurisdiction to another Not a consumer-focused…
Where Questerre is currently 24
Where Questerre is currently 4.4 TCF (726 million boe) prospective recoverable resource, evaluated by NSAI Land position is the heart of the fairway Premium gas market Currently in advanced piloting phase 25 Land held until…
Path to commercialization 600 500 Com m itte d Capital ( m illions) 400 400+ 300 Quebec Currently 200 100 to 300 100 0 to 75 50 to 150 0 IDENTIFY INVESTIGATE ADVANCED TRIAL COMMENCE Resource Rock Properties Pilots…
Whats next for Quebec 27
Prerequisites for development Strategic Environmental Assessment Complete advanced piloting phase and sweet spot identification Establish hydrocarbon legislation Achieve social acceptability Develop local service sector 28
Outlook Acquire early-stage, high-impact opportunities to complement Utica shale discovery Focus on unconventional oil Develop Antler into core area with production goal of 2,000 bbl/d Expand existing pool through infill, step outs…
Investment summary Mega discovery in Utica shale with long land tenure Strong Unconventional light oil resource play in Saskatchewan portfolio Well positioned to acquire and develop leading edge shale projects Large retained…
Management and Board Management Board Michael Binnion, President & Chief Executive Les Beddoes, Jr. Officer International explorationist John Brodylo, VP Exploration (Nexen) Former VP Exploration, Bow Valley Energy Inc.; Victoria, BC…