Questerre Energy (QEC) Q2 2025 earnings summary

Executive summary

• Average daily production reached 3,091 boe/d, nearly doubling year-over-year, driven by new Kakwa North wells coming online.

• Net cash from operating activities was $6.3 million and adjusted funds flow from operations was $5.0 million, both up from the prior year despite lower realized prices.

• Net loss of $0.7 million for the quarter, compared to net income of $1.3 million in the same period last year, due to higher operating and depletion expenses.

• Announced agreement to acquire PX Energy, a Brazil-based oil shale and refining company, with plans to spin out Quebec assets to avoid dilution.

• Ongoing legal proceedings in Quebec regarding Bill 21, with an application for leave to appeal to the Supreme Court of Canada.

Financial highlights

• Petroleum and natural gas sales rose 55% to $13.7 million for the quarter, driven by higher production volumes.

• Adjusted funds flow from operations increased 12% to $5.0 million for the quarter and 15% to $8.5 million year-to-date.

• Working capital surplus at quarter-end was $13.2 million, with no material borrowings under credit facilities.

• Capital expenditures totaled $1.0 million for the quarter and $18.9 million year-to-date, mainly for Kakwa North wells.

• Shareholders' equity stood at $138.4 million at June 30, 2025.

Outlook and guidance

• Production expected to decline in the second half of the year with no further wells planned.

• Focus remains on advancing a business and political solution in Quebec and protecting shareholder rights.

• Anticipates trial date for Quebec Bill 21 legal proceedings to be set following government witness questioning.

• Plans to close PX Energy acquisition, subject to due diligence, regulatory, and shareholder approvals.