Questerre Energy Corporation

I think QEC's main focus is on Beaver River, not Ukraine. The last well QEC drilled there they got 10mmcf/d. I don't know what the decline curves etc were like. Clearly the potential is big, but I think TSU would do best by bringing in a partner to create some value.

I asked Jason about some things like the capex etc, his response was:

We believe Talisman is quite optimistic about securing the completion equipment to conduct the fracture stimulations on the two horizontals wells - St. Gertrude and Fortierville - this year. We are very encouraged and supportive of Talisman's efforts through the new head of QOGA to form the overseeing committee and proceed with establishing the necessary regulations to allow us to do this. However, based on our experience in Quebec things always seem to take longer than expected.

"We believe Talisman is quite optimistic about securing the completion equipment to conduct the fracture stimulations on the two horizontals wells - St. Gertrude and Fortierville - this year. We are very encouraged and supportive of Talisman's efforts through the new head of QOGA to form the overseeing committee and proceed with establishing the necessary regulations to allow us to do this. However, based on our experience in Quebec things always seem to take longer than expected.

We have allocated funds to Quebec and will support the study to the extent we are allowed (i.e. depending on how many wells they allow, the interim regulations, etc.) One of our key messages which we delivered in our annual report is that we are looking for new projects, with a focus on unconventional oil. It is prudent for us to focus our capital elsewhere until the situation in Quebec improves. This is in response to the BAPE and the royalty review. It is important that the government understands that their actions and messaging have a direct impact on our company (Witness the change in our market cap) and they need to realize this. If the situation in Quebec changes, we can quite easily reallocate capital back to the province. Also, keep in mind that currently the situation in Quebec is quite political given the relative strength of the governing party and it appears that there are several ministries and Ministers positioning themselves for the next election.

With respect to new ventures, we are looking for new projects in places where we can have a competitive advantage. We are looking internationally but our competitive advantage cannot be our ability to pay the highest price. It must be a project in a place where we can leverage our expertise t develop a project with the same potential as Quebec. The 1,000-2,000 bbl/d goal from our oil assets is a target. Through acquisitions, drilling and secondary recovery we believe this could be achieved.

Jason"

Frankly I can't blame them for going into oil right now. If they could hit 2000bbls/d in Sask bakken play with $70 net back there, it could be huge. Heck even using $50 net back we'd be looking at $35M in revenues. Their success rate is almost 100% and the wells cost $1-2M each. This will be good to provide revenue to develop Quebec and Binnion said. I know a PP will have to be done sometime in the future, but if we can get some big money out of oil in the meantime it will help fund it for some time.

As far as the SP goes, basically giving Quebec, Sask, BC and indirectly (Beaver River) little acerage value. The fall has been on the most pathetic volume I have seen in a long time...very small amount of shares. I'll be going over the top if it gets under a dollar. I have the patience here...I like the buy and hold game.

I expect to see those two horizontals done this summer or fall. I'm sure the committee needs some work to do lol! Gastem has said that Canbrium will do the two horizontals and also the Joly well in Quebec if authorized by the committee...and again, I don't see any reason not to. This study should be 100% practical and out in the field using real science. The BAPE said that the tons and tons of data they presented on fracking to be safe isn't enough...so why would you not take your own advice and study fracking...sitting inside would be counterproductive and a direct contridiction to what they said we should be doing.

NY should be lifting it's ban this summer too. That article that was just posted was huge. For those that didn't read it, it's a absorbant form of silica I believe that is added to the frac water...not sure before or after, but it removes basically most of the fracking agents...basically what ppl are conserned about.

Here is a link:

http://blogs.forbes.com/jeffmcmahon/2011/05/02/fracking-pollution-may-be-solved-doe-says/

Rocco :)