Questerre Energy (QEC) Q4 2024 earnings summary

Executive summary

• 2024 saw Questerre focus on asset development outside Quebec, with key drilling at Kakwa and ongoing legal action regarding Quebec license revocation.

• Average daily production was 1,756 boe/d, with net cash from operating activities of $13.7M and adjusted funds flow from operations of $14.6M.

• Total proved and probable reserves declined 10% to 23.8 MMboe, but before-tax NPV-10% remained stable at $195.3M.

• The company is advancing a carbon storage pilot in Quebec and continues to pursue a business and political solution for its Quebec gas discovery.

• Red Leaf pilot project in Jordan faces higher costs and requires new funding; Questerre's exclusive rights may expire in May 2025 without a new agreement.

Financial highlights

• Petroleum and natural gas revenue fell 12% to $36.9M, mainly due to lower production and commodity prices.

• Net loss for 2024 was $7.3M, a significant improvement from the $23.7M loss in 2023, mainly due to lower impairment expenses.

• Adjusted funds flow from operations was $14.6M, down from $15.9M in 2023.

• Capital expenditures increased to $20.6M from $10.1M, primarily for Kakwa drilling.

• Cash and cash equivalents at year-end were $31.8M, with an unutilized $16M credit facility.

Outlook and guidance

• 2025 capital expenditures are estimated at $14.4M, focused on Kakwa North well completions and tie-ins.

• Production volumes are expected to decline in the second half of 2025 without new drilling, but could increase in Q2 2026 if a Kakwa North program proceeds.

• Carbon storage and emissions reduction projects in Quebec depend on government funding and regulatory developments.