Questerre Energy (QEC) Q1 2025 earnings summary

Executive summary

• Three wells at Kakwa North were completed, raising production to over 3,500 boe/d since April; average Q1 2025 production was 1,729 boe/d, up from 1,664 boe/d year-over-year.

• Net income was $4,000, a turnaround from a $175,000 loss in Q1 2024; adjusted funds flow from operations rose to $3.5 million from $3.0 million.

• Capital expenditures surged to $17.9 million, mainly for Kakwa North, funded by working capital.

• Legal proceedings continue in Quebec regarding Bill 21, with court-ordered questioning of government officials scheduled for fall.

• Red Leaf completed a larger pilot-scale demonstration, leading to a redesign and discontinuation of a Jordan partnership letter of intent.

Financial highlights

• Petroleum and natural gas sales were $9.1 million, nearly flat year-over-year.

• Adjusted funds flow from operations increased to $3.5 million; cash flow from operations was $3.4 million.

• Working capital surplus declined to $9.2 million from $30.2 million year-over-year due to higher capital spending.

• Royalties as a percentage of revenue dropped to 6% from 12% year-over-year.

• Operating expenses fell 9% to $3.7 million, or $23.85/boe, down from $26.94/boe.

Outlook and guidance

• Next Kakwa North drilling program could begin in fall, contingent on well performance and oil prices.

• Production expected to rise in Q2 with new wells, then decline in H2 2025 without further drilling.

• Focus remains on legal and political resolution in Quebec and advancing a carbon storage pilot project.

• Emphasis on securing energy supplies and diversifying markets in response to US trade policy changes.