Eric Nuttall: Maximizing Oil and Gas Investments

Source:The Energy Report 05/20/2010
May 22nd, 2010
email: newsletters@theenergyreport.com

TER: You also own a lot of Questerre Energy Corporation (TSX:QEC).

EN: Questerre is in the Utica Shale, an emerging shale play in Quebec. Of the juniors, Questerre has the largest and highest-quality acreage swath in the play. The stock has been weak recently; Questerre did a financing at over $4 and now trades around $3. They have had some very encouraging test rates from a recent eight-stage horizontal well that rivals the Marcellus Shale, We think, given the passage of time, assuming that future horizontal wells confirm the first test rate, Questerre could be sitting on a four-to-five net TCF discovery, and on a market cap today of roughly $700 million with well over $160 million in the bank, it's a pretty good higher-risk investment. However, they have limited production, so your risk is a little higher than other names.