Highlights
— Continued success with shale appraisal programs in the St. Lawrence Lowlands, Quebec
— Vertical wells tested at rates of 300 mcf/d – 800 mcf/d from a single zone within the Utica formation
— Prototype horizontal wells tested at rates between 100 mcf/d – 800 mcf/d from the Utica
— Development of conventional assets in Antler and Greater Sierra deferred in current commodity price environment
— Cash flow for the quarter of $1.06 million with average daily production of 1,049 boe/d
— Maintained financial strength with working capital of over $51 million and no debt
“We had a major breakthrough this quarter in Quebec, commented, Michael Binnion, president and chief executive officer of Questerre Energy. The three well tests from a single Utica zone over our acreage have largely addressed our remaining technical concerns about this play. It has validated our belief that the Utica shale will be commercialized with horizontal wells. Early results from other zones in the Utica and shallower Lorraine were also very encouraging. With further engineering work, we are more confident in the potential for stacked shale plays that could, if successful, ultimately reduce F&D costs to under $1.00 an mcf.
Binnion, further commented, We suspended our capital programs at Antler and Greater Sierra this winter to improve our return of capital. Our balance sheet remained strong with a working capital surplus of over $51 million, consisting primarily of cash and equivalents.
The company reported a working capital surplus of $51.76 million at March 31, 2009 as compared to a deficit of $4.51 million at March 31, 2008. Production averaged 1,049 boe/d (2008: 1,274 boe/d) with crude oil and NGLs accounting for 44% of volumes (2008: 24%).
