Questerre Energy (QEC) Q1 2026 earnings summary

Executive summary

• Achieved average daily production of 6,180 boe/d, with an additional 540 boe/d invoiced as deferred revenue from minimum sales contracts in Brazil.

• Adjusted funds flow from operations rose to $20.8 million, including $6.7 million from minimum sales contracts, up from $4.3 million in Q4 2025 and $3.4 million year-over-year.

• Net loss for the quarter was $17.8 million, impacted by non-cash items such as depletion, deferred tax expense, finance expenses, and a $10 million embedded derivative charge.

• Completed a corporate reorganization, spinning out Quebec assets to preferred shareholders, with plans to list these shares.

• Achieved significant cost reductions at PX Energy in Brazil, lowering lifting costs by over 30% to $17.5 million from $25.5 million sequentially from Q4 2025.

Financial highlights

• Petroleum and natural gas sales reached $43.0 million, up from $9.1 million in Q1 2025, driven by the Brazil acquisition, and remained steady compared to the prior quarter as higher realized prices offset lower production volumes.

• Adjusted funds flow from operations was $20.8 million (Q1 2026), $4.3 million (Q4 2025), $3.5 million (Q1 2025), and $3.4 million (Q1 2025).

• Net cash from operating activities was $3.1 million for Q1 2026 (Q1 2025: $3.4 million).

• Capital expenditures totaled $1.8 million, down from $17.9 million year-over-year.

• Working capital deficit stood at $49.6 million at March 31, 2026, compared to a surplus of $9.2 million in Q1 2025 and improved from $52 million at December 31, 2025.

Outlook and guidance

• Production is expected to decline for the remainder of 2026 due to the sale of Kakwa Central and natural declines in Canada.

• Anticipates improved working capital position by year-end, supported by asset sales and cost-cutting.

• Plans further cost reductions at PX Energy, targeting $8 million in annual savings in both 2026 and 2027, with management confident in additional operational improvements.

• Ongoing evaluation of listing options for Series 2 Preferred Shares representing Quebec assets.

• Engaged with Quebec government on carbon storage framework and pilot application, supporting decarbonization commitments.