AL PARKER/iStockphoto/Thinkstock
Photo credit: AL PARKER/iStockphoto/Thinkstock

Canada's Questerre Energy Corp. has stated that results of the resource assessment of its acreage in the Montney Formation in the Kakwa-Resthaven area in Alberta revealed total reserves of about 130 million barrels of oil equivalent.

These include about 100 million barrels of oil equivalent of prospective resources and approximately 32 million barrels of oil equivalent of economic contingent resources, the company announced Thursday.

According to Michael Binnion, president and chief executive officer of Questerre, the findings from the report are good news as they show the resource the company captured in the Kakwa-Resthaven area in Alberta over the past 12 months was of significant value. The report assigned economic contingent resources to just over 15 percent of the total acreage, based on its vicinity to existing and tested Montney wells. However, as Questerre plans to drill additional wells adjacent to its acreage, Binnion believes that the majority of the company's prospective resources will be reclassified as economically contingent resources, and ultimately as reserves.

The report, released by McDaniel & Associates Consultants Ltd., was based on evaluation of the resources associated with the petroleum and natural gas available on a segment of Questerre's 28,800 net acres in the area. More specifically, the assessment focused on 12,800 net acres, representing roughly 44 percent of the company's total acreage there. However, the report did not look into the company's 16,000 net acres in the Wapiti area, located about 12 miles northwest of the Kakwa-Resthaven area.

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Other key findings of the report include estimated prospective resources net to Questerre ranging between 291 Bcfe (49 MMboe) and 774 Bcfe (129 MMboe), with a best estimate of 598 Bcfe (100 MMboe), including over 40% condensate.

Economically contingent resources, which the report attributed to 15 percent of Questerre's 28,800 net acres, have been assigned a best estimate of 190 Bcfe (32 MMboe). Estimates for economically contingent resources ranged between 95 Bcfe (16 MMboe) and 245 Bcfe (41 MMboe), the report found.

According to McDaniel & Associates Consultants, about half of the best estimate, or approximately 16 million barrels of oil equivalent, are natural gas liquids, with condensate making up at least 83 percent of this amount. Based on its April 2013 price forecast, McDaniel's best estimate of economically contingent resources accounts for a net present value discounted at 10 percent before tax of $267 million.

Both the prospective resources and economic contingent resources estimates are added to the already proved and probable reserves of 26 Bcfe (4 MMboe) as of December 31, 2012, with a net present value discounted at 10 percent before tax of $44 million.

Questerre Energy has a number of other operations relating to natural gas and other non-conventional energy resources. The company has base production and reserves in the tight oil Bakken/Torquay area in southeast Saskatchewan. It is also involved in the Utica shale gas discovery in the St. Lawrence Lowlands, Quebec, and is planning further expansion of activities designed to help unlock the full potential of Canadian natural gas, the company stated.