Argo has increased faith in the oil and gas company and is expecting a the company to raise cash by means of a share issue.

Translated from the following norwegian link... http://www.na24.no/imarkedet/article2819967.ece

We may raise the target price to 38.7 kroner (7 CAD) at the end of 2010, writes analyst Theodore Sveen Nilsen in Argo Securities in an updated analysis.

Waiting for share issue
The reason that they might raise the price target is that the flow rates of over 2 million cubic feet per day from the testing of the horizontal well will increase the confidence of the commercial potential of the area in the Lowlands in Canada.

- We expect that a share issue will be implemented over the next couple quarters. This share issue will not be triggered by a negative cash position, but the managements increased confidence in the Lowlands project with a major commercial development, Sveen Nilsen writes.

Today, Argo isued a buy recommendation on Questerre with a target price of 26 kroner (4.7 CAD).

Continuing progress in Canada.

Questerre reported Tuesday morning that they have begun production testing of the horizontal well St. Edouard No. 1A in the St. Lawrence Lowlands in Canada.

This is the first horizontal well, which has reached target depth in the middle of the Utica-interval. The well was recently completed with an eight-stage fracture stimulation in the 1000 meter long horizontal section.

Micro-seismic monitoring was also carried out using a corresponding vertical well. Questerre expects the preliminary results are expected towards the end of February.

The oil and gas company has also completed drilling operations on another horizontal well. This is called Gentilly No. 2.