Presentation outline Company Overview St. Lawrence Lowlands, Qubec Antler, Saskatchewan New Ventures Investment Summary 2
Corporate Overview Large prospective resource in Qubec Over one million acre land position 18 Tcf prospective recoverable resource in Utica shale on Questerre lands Land tenure until 2018 45,000 net acres for light oil resource…
Asset overview St. Lawrence Lowlands, Qubec 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 Year Ended December 31 2010 2009 Working capital () 136 million 46.5 million Debt Nil Nil Cash Flow from operations () 4.7 million 2.9 million Production (boe/d) 619 810 Oil weighting…
St. Lawrence Lowlands, Qubec 6
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…
Where Quebec is currently 8
BAPE BAPE mandates multi stakeholder committee to oversee environmental study the EES BAPE says no fracture stimulation during EES study Exception is pilot projects Government will be involved This is a good thing Process…
Royalty regime Targets increasing government take from 33% to 50% Including corporate and provincial taxes Target is similar to current regime in British Columbia and Alberta Depends on future economic conditions Under todays…
Legislation Clear from BAPE study and royalty report that Quebec is working hard to create an oil and gas regime Quebec is not relying on industry so it will take time to independently develop their own expertise…
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…
Where Questerre is currently 13
Where Questerre is currently 4.4 TCF prospective recoverable resource, evaluated by NSAI Land position is the heart of the fairway Premium gas market Currently in advanced piloting phase 14 Land held until at least 2018
Path to commercialization 600 500 Com m itte d Capital ( m illions) 400 400+ 300 200 100 to 300 100 0 to 75 50 to 150 0 IDENTIFY INVESTIGATE ADVANCED TRIAL COMMENCE Resource Rock Properties Pilots Development…
Time to development in Quebec (July 2008 ) 6 wells tested, 5 ready to complete and test Long land tenure and immature regime have contributed to a slow 16 and methodical approach
Whats next for Quebec 17
Prerequisites for development Complete advanced piloting phase and sweet spot identification Establish hydrocarbon legislation Achieve social acceptability Develop local service sector 18
Antler, Saskatchewan 19
Antler, Saskatchewan A core area for Questerre High margin, light oil asset Average royalties of 6% and operating costs of approximately 10/bbl In 2010, successfully refined drilling and completion techniques as well as…
Antler, Saskatchewan 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 Selling…
New Ventures 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 resources,…
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 Former VP Exploration, Bow Valley Energy Inc.; Victoria, John Brodylo, VP Exploration (Nexen)…
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