Again this is from DnB Nor and shows up within my online banking service so I can't provide a link...

A busy quarter ahead...

Questerre reported Q1 results slightly below our estimate, mainly driven by lower production than anticipated. Next quarter is set to be busy with test results from three horizontal wells. We argue that the potential represented in the company's shale gas acreage is vastly undervalued and reiterate our BUY recommendation.

• Results slightly below estimate.

Questerre reported EBITDA of -0.8 CADm compared to our estimate of -0.7 CADm. Quarterly production averaged 600 barrels of oil equivalent per day versus our forecast of 710, with weather-related shut-ins in British Columbia and limited drilling activity in Antler explaining the discrepancy.

• Two horizontal well tests during Q3.

Results from the two horizontal wells Fortierville and Gentilly will be out during Q3, in addition to Leclercville which is adjacent to the company's acreage. This means that the coming quarter will be quite busy when it comes to news flow, and we argue that the current share price reflects too low expectations for the upcoming wells.

• Production estimate reduced.

Following the quarterly report we have lowered our production forecast for 2010/2011 to 645/766 barrels of oil equivalent per day (745/798). For 2012, the first year with significant contribution from Quebec, we estimate 3,076 barrels of oil equivalent per day.

• Reiterate BUY, great risk/reward.

We reiterate our BUY recommendation on Questerre with a target price of 43 NOK (44), set equal to our NAV estimate. Being a takeover candidate and fully funded for the appraisal stage of its promising shale gas discovery in Quebec, the recent sell-off represents an excellent buying opportunity in our view.