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Questerre Energy Corporation

Corporate Presentation Pareto Oil & Offshore Conference September 10-11, 2008. Questerre Energy Corporation. Forward Looking Statement.

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Questerre Energy Corporation

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  1. Corporate Presentation Pareto Oil & Offshore Conference September 10-11, 2008 Questerre Energy Corporation

  2. Forward Looking Statement This presentation contains forward-looking information. Implicit in this information are assumptions regarding oil and natural gas prices, production, royalties and expenses that, although considered reasonable by Questerre at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in Questerre’s plans, changes in commodity prices, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee by Questerre that actual results achieved will be the same as those forecast herein. Estimated values in this presentation do not represent fair market value.

  3. Presentation Outline • Company Overview • Business plan & asset overview • Management & Board • Capitalization • Second quarter results • Area Overview • St. Lawrence Lowlands, Quebec • Northeast British Columbia • Antler • Outlook • Near term goals • Investment summary

  4. Business Strategy Superior risk/reward in the Canadian frontier “Big gas and big markets” Buy early • Acquire significant land positions in overlooked or underdeveloped areas Add value • Leverage technical expertise to “understand the rocks” and high grade land positions Reduce risk • Farm-out to partners and create a diversified portfolio of upsides Create shareholder value • Prove up reserves and production

  5. Successes to Date Major new shale gas discovery in Quebec Additional exploration targets in Quebec being evaluated in 2008/2009 Partnerships with several seniors including Talisman, EnCana and Forest Oil Company value enhanced by current production of over 1,300 boe per day

  6. Diversified portfolio of assets St. Lawrence Lowlands, Quebec Potentially giant Utica & Lorraine shale gas discoveries being evaluated by Forest Oil & Talisman Follow-up exploration by Talisman on new basin Trenton Black-River discovery Northeast British Columbia Significant land base for established Jean Marie resource play with EnCana Evaluating Liard shale gas potential at Beaver River Field Southeast Saskatchewan Proven Bakken/Torquay light oil resource style play with immediate cash flow and high netbacks Southern and Central Alberta Production base with over $10 million in operating cash flow in 2007 Asset Overview Northeast British Columbia Southeast Saskatchewan BRITISH COLUMBIA ALBERTA SASKATCHEWAN QUEBEC Southern & Central Alberta St. Lawrence Lowlands Quebec

  7. Management Senior multi-disciplinary team experienced in large-scale projects in the WCSB have invested together with directors $12 million Michael Binnion, President & CEO John Brodylo, VP Exploration (Nexen) Peter Coldham, VP Engineering & Operations (Chevron) Jason D’Silva, VP Finance (CanArgo, Flowing) Richard Mindus, Operations Manager (Nexen) Ian Nicholson, Manager, Alberta (Beau Canada, Kerr McGee) Maria Rees, Corporate Secretary (CanArgo, Flowing) Rick Tityk, VP Land (Hunt Oil)

  8. Board of Directors Les Beddoes, Jr. • International exploration experience • Former VP Exploration for Bow Valley Energy Inc.; Victoria, BC Michael Binnion, President & CEO Pierre Boivin • Experienced Quebec-based business leader • President, Montreal Canadiens; Montreal, QC Russ Hammond • Corporate finance experience • Former Managing Director, Greenwell Montague; London, UK David Mallory, Chairman of Audit, Corporate Governance & Reserves Committees • Financial Management & Governance experience • CEO BLZ Energy Ltd.; Calgary, AB Peder Paus, Chairman • Merchant banking experience • Former Managing Director, Manufacturers Hanover Trust; UK, U.S.A., Norway Bjorn Inge Tonnessen • Oil & Gas E&P experience former analyst • Executive Vice President, Svenska Group; Oslo, Norway

  9. Capitalization Insiders 27,719,743 15% Free Float 168,930,470 85% Total (1)196,650,213 Options (Average exercise price $1.21) 17,086,671 Average daily trading volume (OSE plus TSX) 8,592,007 (1) Includes pending cancellation of 10,698,785 shares held by Terrenex, recently acquired by Questerre

  10. Q2 2008 Financial Overview 2008 2007 Average daily production (boe/d) 1,241 1,443 Cash flow from operations $5.14 million $3.18 million Average sales price ($/boe) $80.01 $49.91 Operating netback ($/boe) $51.07 $28.11 Working capital $68.45 million $29.91 million Existing credit facility $11.25 million

  11. St. Lawrence Lowlands, Quebec

  12. New basin discovery with potential for giant unconventional gas reserves Three discovery wells in three zones: Utica siltstone/shale - St. Francois du Lac Lorraine siltstone/shale - St. Francois Romaine Trenton Black-River hydrothermal dolomite – Gentilly First Mover Questerre through Terrenex first drilled in Quebec with Bow Valley in 1989 and has held the core acreage position since 1998 St. Lawrence Lowlands St. Francois du Lac shale gas well

  13. Fiscal terms are excellent Play fairway definable Three prospective zones Rock can be hydraulically fractured Discovered resource is big Economics and Geology are Known Utica shale Lorainne shale Trenton Black River

  14. Over 50 well penetrations & 30 drill stem tests Over 5,000 km of 2-D seismic Bow Valley/Terrenex and EnCana technical studies Forest and Talisman recent work including: Five modern wells with modern core analysis (Three on Questerre acreage) Four tested vertical discovery wells (200 mcf/day to 1,200 mcf/day) What its based on Source: Molopo Australia Limited Presentation Historical Drill Stem Tests of Quebec Shales

  15. Recovery per well Production profile from stimulated horizontal wells Ultimate costs on a development program basis Optimization techniques/strategy What is being defined Testing of Gentilly #1 Discovery well

  16. 1 bcf in Quebec worth 2 bcf in Alberta • Canada’s second largest natural gas market • Estimated 200-400 mmcf/d capacity on TCPL (seasonal) • Realized natural gas prices at border are a $1 premium to NYMEX due to proximity to markets • Royalties of 10% to 12.5% • Net backs over $40/boe based on $9/mcf NYMEX Pipeline infrastructure in Lowlands Comparative illustration of fiscal terms

  17. 8 of 13 wells on Questerre Land Acreage Gross Net Questerre - TLM (~25% + 4.25% GORR) 719,788 206,746 Yamaska – FST/GMR (20% working interest) 113,453 22,691 St. Jean – GMR (56% working interest) 181,255107,003 Total 1,014,496 336,440

  18. Utica Zero Edge line PlayFairway Logan’s Line Unstructured Structured Overmature line Yamaska Growth Fault line Fairway Break in Slope line Transitional Overthrusted Fairway Shallow Overthrusted and Overmature Legend Play Fairway Depth 700 to 2,600 m Depth 350 to 700 m Depth 0 to 350 m

  19. Questerre dominates fairway

  20. Rock Properties Forest Talisman Forest Utica Utica Lorraine Barnett Depth (ft) 2,300–6,000 1,500–10,000 1,500–11,000 4,500-9,000 Thickness(ft) 500 300–1,000 1,500–6,500 150-700 Clay content (%) 15 – 26 15 – 51 30 – 38 15 -30 TOC (%) 1.0 - 3.1 0.3 - 2.5 0.1 – 1.5 3.5 – 5.0 Gas-filled porosity (%) 3.2 – 3.7 2.2 – 3.5 1.2 – 3.2 3.0 – 4.8 Maturity (Ro) 1.3 – 2.0 1.1 – 4.0 1.1 – 4.0 1.0 – 2.2 Discovered Resource Average (Bcf/section)93 92.5 120

  21. Questerre assumptions Estimated discovered resource of 93 Bcf/section for Utica and 120 Bcf/section for Lorraine Recovery factors based on 100 acre spacing for Utica and 80 acre spacing for Lorraine Potential contingent resource based on 70% prospectivity factor plus 50% land utilization/risk factor resulting in 35% of net acreage being developed Shrinkage factor of 5% includes fuel gas Questerre 305,849 net working interest acres (107,047 utilized) Recovery Gross Bcf/well Gross Bcf/well Net Recoverable Net Recoverable Total UticaLorraineUtica (Tcf)Lorraine (Tcf) Tcf 10% 1.38 1.43 1.48 1.91 3.38 15% 2.07 2.14 2.22 2.86 5.07 20% 2.76 2.85 2.95 3.81 6.77 25% 3.45 3.56 3.69 4.77 8.46 Questerre 30,591 royalty interest (10,707 acres utilized) 10% 1.38 1.43 0.148 0.191 0.339 15% 2.07 2.14 0.222 0.286 0.508 20% 2.76 2.85 0.296 0.381 0.677 25% 3.45 3.56 0.370 0.477 0.846 Note: 1 trillion cubic feet of gas is 167 million barrels of oil equivalent (BOE) Multi Tcf Potential

  22. Economic Sensitivity • Horizontal wells into Lorraine and Utica have NPV-10% of $6 million based on: • Initial 30 day rate - 2 mmcf/d • First year Decline – 63% • Recoverable Reserves 2.4 Bcf/well • Capital costs $3 million • Operating Costs $1.00/mcf • $9/mcf NYMEX • Sensitivity in NPV10 to change in parameters • $1 change in NYMEX = $1.1 million • 100 mcf/d (17 BOE/d) change in initial rates = $0.440 million • $100K change in capital costs = $0.091 million • Breakeven cases (all other parameters held even) • $3.25 NYMEX • 635 mcf/d (106 BEO/d) initial rate • CAPEX of $9.5 million per well

  23. Over next 18 months QEC will participate in pilot programs to establish commerciality of unconventional gas in St. Lawrence Lowlands at an estimated cost of $40 million to $50 million net to Questerre with first gas estimated by second half of 2009 and full development in 2010 based on results achieved Pilot Programs

  24. Current Activity • Talisman program well underway with stimulation of Gentilly #1 and spud of La Visitation well • Interim results from successful frac of one Utica interval in Gentilly #1 at 800 mcf/d • La Visitation to be follow up with two more wells expected to be drilled before year-end • Forest Oil to complete horizontal drilling in Q3 and complete testing in Q4 • Questerre mobilized rig to spud St. Luc exploration well and test shallow Utica shale Talisman Gentilly #1 FRAC

  25. Northeast British Columbia

  26. Liard Shale Play • Over 1 Tcf discovered resource potential per square mile for Mississippian age shale/siltstone at Beaver River • Questerre holds a 50% interest in 35 square miles with take away capacity in place • Shale is potentially analogous to emerging Horn River shale play to south • Currently evaluating this potential with recompletion of A-5 well based on expertise acquired in Quebec Mississippian shale/siltstone

  27. Jean Marie play • Farm-in with EnCana adds a proven Jean Marie play covering over 140 sq. km – long life reserves leveraged to gas prices • Questerre drilled two successful wells this winter on production at combined initial rate of 4.0 mmcf/d • 6-8 locations to be drilled next year based on results from 46 square mile 3-D survey acquired this winter • 100 gross possible drilling locations with P50 Estimated Ultimate Recovery of 1.2 Bcf per well Nabors 21 rig drilling first Questerre well

  28. Antler, Saskatchewan

  29. Antler – Bakken/Torquay Play • Twelve successful horizontal wells drilled to date with 1P reserves of up to 90,000 barrels per well • Six multi-stage fracs carried out with stabilized production over 70 bbls/d • 50% interest in significant land position – drilling inventory of 112 locations with 3-D and 2-D seismic • Excellent fiscal terms - Light sweet oil (40º API) receives premium pricing and Crown royalty incentives of 2.5% on first 103,000 barrels of production from horizontal wells • Netback of $80 per barrel based on $100 WTI Questerre land holdings in SE Saskatchewan

  30. Company Outlook

  31. Company Outlook • St. Lawrence Lowlands, Eastern Canada • Talisman exploration program for the Trenton Black River underway - three wells scheduled for 2008 - results in early 2009 • Talisman $100 million plus Utica and Lorraine shale gas evaluation and pilot program underway - results in fourth quarter • Forest Oil to fracture stimulate two pilot production horizontal wells - results in fourth quarter • Shallow Utica/Trenton Black River well to be operated by Questerre in fall 2008 on St Jean • Northeast British Columbia • Evaluate results from A-5 recompletion for Liard shale potential • Six well program anticipated in Greater Sierra based on interpretation of 3-D seismic acquisition program • Antler, Saskatchewan • Drill, complete and fracture stimulate nine additional wells and stimulate two existing wells over second half of 2008

  32. Investment Case Strong portfolio Multiple opportunities in Lowlands including recent discoveries New shale play being tested in Liard basin Long-life Jean Marie gas in northeast British Columbia Significant light oil development at Antler in Saskatchewan Large growth potential with mitigated risk Large retained interest in potential giant shale resource plays in Lowlands Opportunities for other large gas discoveries in Quebec & NE BC High leverage through partner risk capital and expertise Incremental growth in lower risk asset base Evolving Markets Natural gas re-emerging as reliable energy source in North America Growing investor interest in shale gas International demand for natural gas reducing LNG imports in North America Experienced management Past experience founding, financing, and managing successful international and domestic exploration and production companies Proven determination and commitment to overcome obstacles to success Specific expertise with non conventional reservoirs Concepts have been validated by partners’ due diligence and results

  33. 1650 AMEC Place 801 Sixth Avenue SW Calgary, Alberta T2P 3W2 Canada Tel : (403) 777-1185 Fax : (403) 777-1578 Web: www.questerre.com Email : info@questerre.com

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