Questerre, Transeuro Make Headway on Liard Shale Gas Program

Questerre Energy Corp.

Questerre Energy Corporation and Transeuro Energy Corp. have announced results from their Liard shale gas program at the Beaver River Field in British Columbia.

The program consisted of a series of mini-fracs and high pressure acid stimulations on the A-5 well. The main objective of the program was to evaluate rock properties of the Liard shales and identify prospective intervals for a possible future fracture stimulation program.

After a minor stimulation, the A-5 well flowed sweet dry natural gas at a stabilized rate of 10 mmcf/d (1,667 boe/d) over a three day test with a wellhead pressure of 3000 psi. The well is being tied-in to the local gathering system to commence a long-term production test. Production is expected to begin before the end of October pending regulatory approval.

Michael Binnion, President and Chief Executive Officer of Questerre, commented, "While too early to evaluate the full contribution from the Liard shales, these initial results are well above our expectations. With over 30 square miles of prospective acreage, existing infrastructure and takeaway capacity, this remains an exciting opportunity."

Questerre intends to place the well on production at restricted rates. The high flowing pressure associated with this well will likely reduce production from the lower pressure A-2 and A-7 wells limiting overall production gains at the field.

The tested interval in A-5 is brittle and highly dolomitic at the top of a thick sequence of organic rich shale. The appraisal strategy is to target the more brittle rock intervals that have higher carbonate and silica content expected to respond favourably to stimulation. The brittle rocks contain free gas and may serve as a pathway for the shale gas to enter the well. The long-term production test is intended to establish how much, if any, contribution will come from the shales.

A-5 is the third well to be put on production from the shale/siltstone intervals at Beaver River. These intervals are collectively more than 2000m thick and, for classification purposes, have been separated into three major intervals. Discovered resource is estimated at over 1 Tcf per square mile based on independent analysis by Netherland, Sewell & Associates, Inc. The two other producing wells, A-7 and A-2, produce from the upper and middle intervals respectively.