Questerre Energy Corporation has made a strategic investment in Red Leaf Resources, Inc. (“Red Leaf”). Through an agreement with one of the vendors, Whitehorn Resources Inc. (“Whitehorn”), Questerre also has the option to acquire over 280 square km. prospective for oil shale in the Kingdom of Jordan (“Jordan”).

Michael Binnion, President & Chief Executive Officer of Questerre, commented, 
“This investment gives us a minority control block in Red Leaf. They now have over US$100 million in cash and are committed to their business plan of commercializing EcoShale technology and supporting their license holders to develop their projects. We will also have access to significant additional oil shale resources in Jordan through our agreement with Whitehorn.”

He added, “Their recent engineering work with Questerre on the use of coker drums as reusable capsules is encouraging for the commercial development of our project in Jordan. Combined with the initial positive results from testing our oil shale using the EcoShale process, this investment could materially accelerate the timeline for our economic feasibility work.”

Adolph Lechtenberger, Chief Executive Officer of Red Leaf, noted, 
“Commercializing the EcoShale process remains our top priority. Over the last year, we have been working with Questerre on their independently assessed multi-billion barrel deposit in Jordan. This is a unique opportunity for both our companies. Red Leaf is in a solid financial position and we look forward to continuing our work to support Questerre in developing this project.”

Questerre reported that it has entered into agreements to acquire 103,751 common shares of Red Leaf representing approximately 25% of Red Leaf’s outstanding Common Shares. The first tranche of the acquisition for 82,015 Common Shares closed earlier this week with the second tranche scheduled to close later this month. On closing of the second tranche, Questerre will hold approximately 30% of the common share capital of Red Leaf. The acquisition price is US$60 per Common Share paid concurrently with the applicable closing and a contingent payment of US$12.50 per Common Share subject to the fulfillment of certain conditions.

The second tranche of the acquisition includes the option to acquire Whitehorn. In addition to the Red Leaf Common Shares held by Whitehorn, its assets include a Memorandum of Understanding (“MOU”) with the Ministry of Energy and Mineral Resources in Jordan granting Whitehorn the exclusive right to explore for oil shale on 282 square km in the Wadi Abu Al Hamam area. This acreage lies to the northwest of Questerre’s acreage. There are 30 core holes that have been drilled on this acreage with yields of between 15 and 25 gallons per ton. The term of the MOU was recently extended until 2019.

Questerre also announced that it has disposed of shallow exploration rights over 960 net acres, primarily on its operated acreage in the Kakwa area, for gross proceeds of $4.45 million and an overriding royalty. Questerre continues to retain the rights to develop the Montney formation on this acreage. No reserve value was attributed to the disposed rights as at December 31, 2016.

The Company also reported that it has been refunded approximately $6 million following the successful appeal of a summary judgment hearing in November 2016. The amounts relate to a claim by a joint venture operator primarily relating to the costs of drilling two wells in Quebec in 2010. The operator has appealed this ruling and a hearing is scheduled for early June 2017. A trial is currently scheduled for late 2018 in respect of this matter.

Questerre Energy Corporation is leveraging its expertise gained through early exposure to shale and other non-conventional reservoirs. The Company has base production and reserves in the tight oil Bakken/Torquay of southeast Saskatchewan.  It is bringing on production from its lands in the heart of the high-liquids Montney shale fairway. It is a leader on social license to operate issues for its Utica shale gas discovery in the St. Lawrence Lowlands, Quebec. It is pursuing oil shale projects with the aim of commercially developing these significant resources.

Questerre is a believer that the future success of the oil and gas industry depends on a balance of economics, environment and society. We are committed to being transparent and are respectful that the public must be part of making the important choices for our energy future.