Questerre's Cash Flow Increases 60% in Q2

Questerre Energy Corporation has reported on its financial and operating results for the second quarter of 2008.

Michael Binnion, President and Chief Executive Officer, commented, "We had a major breakthrough in the Lowlands with the significant discovery and announced appraisal programs by our partners. Although eclipsed by these developments, we also had excellent results on our entire portfolio during the second quarter of this year. Financially, the improved oil weighting and higher commodity prices translated into cash flow of $5.14 million for the quarter."

Highlights

  • Cash flow from operations for the quarter increased over 60% to $5.14 million from $3.18 million in 2007
  • Significant pilot programs well underway in St. Lawrence Lowlands, Quebec
  • Commenced full development in Antler, Saskatchewan after successful pilot program
  • Tested 1,000 boe/d light oil well in Vulcan, Alberta using selective fracture stimulation
  • Increased working interest in the Lowlands and acquired a seismic database through purchase of Terrenex
  • Completed $75 million equity offering

Cash flow from operations for the second quarter of 2008 grew to $5.14 million from $3.18 million in
2007 and $3.94 million in the first quarter. The increase reflects the higher oil weighting in the Company's production profile and stronger commodity prices and netbacks during the quarter. The proceeds from the recently completed equity issue resulted in a working capital surplus of $68.45 million at June 30, 2008 as compared to $10.00 million at December 31, 2007 and a deficiency of $4.51 million at March 31, 2008.

Petroleum and natural gas revenue for the three months ended June 30, 2008 was $9.04 million. This represents a 38% increase over revenue of $6.56 million in the same period in 2007 and 25% over revenue of $7.23 million in the first quarter of this year. With average daily production of 1,241 boe/d (2007: 1,443 boe/d) in the quarter, higher commodity prices were responsible for the higher revenue. The Company reported a net loss after income taxes of $2.67 million for the quarter as compared to a gain of $0.94 million in 2007. The loss in 2008 is primarily attributable to a non-cash future tax loss of $2.43 million.

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