Questerre Energy Corporation

2008: Year in Review

What a difference a year makes

• Major shale gas discovery made in Quebec

• Grew valuable expertise in shale gas plays

• Achieved early success on B.C. Liard shale gas play with well on production at 5 mmcf/d

• Cash flow over $17 million exceeded guidance

• Replaced over 150% of 2008 production on a 2P basis

• Increased financial strength with net working capital of over $50 million

• Major shale gas discovery made in Quebec

Business plan has proven successful

2008 Objectives

Participate in the drilling of several wells in the Lowlands to test the Trenton Black-River and shale gas prospects

Drill an additional 5 (2.5 net) wells in Antler and evaluate the PackersPlus stimulation technique to increase production and ultimate recovery

Commence full production from the Mannville I Pool in Vulcan

Build inventory of over 50 drilling locations

Maintain similar production levels as 2007 with materially higher netbacks

Met all 2008 objectives

Operating and Financial Results2008 2007

Cash Flow $17.29 million $10.22 million

ProductionCrude Oil and Natural Gas Liquids (bbls/d) 385 (33%) 176 (13%)Natural Gas (mcf/d) 4,761 (67%) 7,282 (87%)Total (boe/d) 1,178 1,390

Revenue ($/boe) 69.13 46.88

Royalties ($/boe) 11.55 11.06

Operating Expenses ($/boe) 14.05 12.07

Operating Netback ($/boe) 43.53 23.75

Working capital ($) 54.31 million 10.08 million

2P Reserves 2.92 mmboe 2.34 mmboe

Debt Nil Nil

Strengthened financial position

Market Liquidity

• Daily trading volumes increased from 0.78 million shares in 2007 to 5.34 million shares in 2008

• Added to Oslo Bors Benchmark Index

• Increased analyst coverage by 7 firms to 12

St. Lawrence Lowlands, Quebec

“All Hail the Triumphant” Copyright 2008 Daedalus Designs Inc. Courtesy Kinsman Robinson Galleries, Toronto in association with Master’s Gallery Ltd., Calgary

Why Shale Gas in Quebec

• Favorable fiscal terms

• Well defined deep fairway with IGIP “incredible gas in place”

• Large land position with drilling inventory measured in decades

Lorraine ShaleLorraine Shale

Favorable Fiscal Terms

• Canada’s second largest natural gas market- over 0.5 Bcf/d

• Additional estimated 200-400 mmcf/d capacity on TCPL (seasonal)

• Royalties of 10% to 12.5%

• Realized natural gas prices in GazMetro system are at a $0.60 premium to NYMEX

• GazMetro distribution system confirmed availability for tie-ins with 9-month lead time

Pipeline infrastructure in Lowlands

Alberta Quebec

Revenue ($5.00/mcf AECO - US$/4.50 NYMEX) $5,000,000,000 $6,450,000,000

LessRoyalties (25% AB/10% PQ) (1,250,000,000) (645,000,000)Trans & Proc ($0.50 AB/$0.20 PQ) (500,000,000) (200,000,000)Operating ($1.00/mcf) (1,000,000,000) (1,000,000,000)Operating net back 2,250,000,000 4,605,000,000Capital (500 wells plus facilities) (2,000,000,000) (2,000,000,000)

Undiscounted cash flow $ 250,000,000 $ 2,605,000,000

Operating net backsPer Mcf $2.25 $4.61Per Boe $13.50 $27.63

Based on 1 Tcf and 2 Bcf/well potential of Utica or Lorraine shale gas

Comparative Illustration of Fiscal Terms

Well Established Geology

Unstructured Structured

Play Fairway

Utica Structure Map

Schematic Cross Section of Lowlands

Dominant Land Position in Fairway

Acreage Gross Net

Questerre - TLM (~25% + 4.25% GORR) 719,788 206,746Yamaska – FST/GMR (20% working interest) 113,453 22,691

St. Jean – GMR (56% working interest) 181,255 107,003

Total 1,014,496 336,440

• 500 net sections (over 1,200 sq. km)

• Land values validated by Canbriam/Suncor farm-in

Quebec City

Montreal

2009 Activity

2008 Activity

2007 Activity

IGIP – Incredible Gas in Place

SYSTEMM

IDD

LE/U

PPER

ORD

OVI

CIA

NGROUP FORMATION

INDIAN CASTLEINDIAN CASTLE

TRENTON

UTICA DOLGEVILLEDOLGEVILLE

FLAT CREEKFLAT CREEK

BASALLORRAINELORRAINE

MIDDLEMIDDLELORRAINELORRAINE

Stratigraphy

• Discovered resource potential over 35 Tcf on Questerre net acreage

Multi Tcf PotentialAssumptions

Estimated discovered resource of 93 Bcf/section for Utica and 120 Bcf/section for Lorraine based on TLM, FST & QEC estimatesRecovery factors based on 100 acre spacing for Utica and 80 acre spacing for LorrainePotential contingent resource based on 70% prospectivity factor plus 50% land utilization/risk factor resulting in 35% of net acreage being developedShrinkage 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 RecoverableTotalUtica Lorraine Utica (Tcf) Lorraine (Tcf) Tcf

10% 1.38 1.43 1.48 1.91 3.3815% 2.07 2.14 2.22 2.86 5.0720% 2.76 2.85 2.95 3.81 6.7725% 3.45 3.56 3.69 4.77 8.46

Questerre 30,591 royalty interest acres (10,707 acres utilized)

10% 1.38 1.43 0.148 0.191 0.33915% 2.07 2.14 0.222 0.286 0.50820% 2.76 2.85 0.296 0.381 0.67725% 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)

Realizing the Potential

• Every shale play has its own learning curve and requires unique, innovative solutions

• Acquire a statistically significant set of results and create repeatability by testing one variable at a time

• Very high beta on individual well results; top half of wells pay for everything

• Persistence and technology inevitably lead to improved results

Barnett Shale (Texas)

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5/7/1990 1/31/1993 10/28/1995 7/24/1998 4/19/2001 1/14/2004 10/10/2006 7/6/2009

First Y

ear A

vg Ga

s Rate

(MCF

PD)

Woodford Shale (Oklahoma)

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5/7/1990 1/31/1993 10/28/1995 7/24/1998 4/19/2001 1/14/2004 10/10/2006 7/6/2009

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ate

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Fayetteville Shale (Arkansas)

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Production data courtesy of Tristone Capital/IHS

Moving up the Learning Curve in 2008

• Validated giant resource potential “IGIP”

– St. Francois du Lac #1 test, April 2008

• Frac’d rock successfully and achieved sustainable gas flows

– Gentilly #1 test, August 2008

• Designed and carried out first prototype horizontal well completion

Frac Fluid Containment System

Gentilly #1 Fracture Stimulation

Forest Oil Horizontal Well Results• Sustained rates of 100 – 800 mcf/d

• Different intervals tested for frac effectiveness

• Rock breaks well – sufficient rock volumes stimulated

– frac geometry confirmed by microseismic

• Good pressure gradients with high pressures encountered

• Four stage prototype – 8 stage production wells would double stimulated rock volumes

• Well cleanup times are slow indicating potential issues with conductivity to wellbore

Frac operations on Forest horizontal wells

Micro-seismic used to validate frac geometry(Image courtesy of Pinnacle Technologies Inc.)

Measuring up to a Proven Shale Play

Initial results are well up the first year learning curveFayetteville production data courtesy of Southwestern Energy corporate presentationQuebec results are estimated 30-day equivalent ratesSpecific wells and intervals are confidential

Quebec

Trend Line

Southwestern

Trend Line

Quebec shale compared to SWN Fayetteville shale

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as

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Quebec Expected Timeline

Original timeline is generally being met with any delays due to market conditions

Rock Properties Investigation

Pilot Project

Commercial Development

Resource Identification

Optimization

2011

Q1 Q2 Q3 Q4

2010

Q1 Q2 Q3 Q4

2009

Q1 Q2 Q3 Q4

2008

Q1 Q2 Q3 Q4

Rock Properties Investigation

Pilot Project

Commercial Development

Resource Identification

Optimization

2011

Q1 Q2 Q3 Q4

2010

Q1 Q2 Q3 Q4

2009

Q1 Q2 Q3 Q4

2008

Q1 Q2 Q3 Q4

Proposed Pilot Pad Locations

Outlook for 2009• Add to database

– Finalize testing of Gentilly #1 and La Visitation #1 well

– Test St. David #1– Drill & test St. Edouard #1

• Test one variable at a time– Re-enter and re-frac Yamaska wells

• Pilot 6-well pad– Acquire seismic data over several

potential commercial drilling pads– Obtain regulatory approval to

commence drilling of 6 well production pad

– Commence approval process for tie-in to GazMetro distribution system

Drilling rig for Forest horizontal wells

Liard ShaleNortheast British Columbia

Liard Shale

• Harness and apply shale learning curve

• A-5 well has encouraging results – 5 mmcf/d on production

• Seeking partners to gather base data to rigorously evaluate Liard shale potential

• Beaver River project adding to our internal shale expertise and proves benefits of following learning curve

Mississippian shale/siltstone sequence

Beaver River Schematic cross section

Conventional AssetsAntler, Saskatchewan

• Validated horizontal multistage wells to increase recovery

• Over 50 drilling locations

• Flexibility to accelerate development drilling based on higher oil prices

Greater Sierra, Northeast BC

• Completed drilling program and 3-D seismic program in 2008

• Several deeper prospects identified using 3-D seismic survey

• 50 drilling locations - Future drilling programs to leverage higher natural gas prices

Vulcan, Southern Alberta

• Focus on operating efficiencies to further improve netbacks

Oil Battery at Antler

Drilling Rig at Greater Sierra

Company Outlook

2009 Outlook

Quebec• Complete drilling and testing of multi-zone deep vertical wells with Talisman• Refine completion design and re-enter and re-complete Yamaska horizontals• Acquire seismic over potential pilot areas with Talisman

Northeast British Columbia• Validate Liard shale play rock properties at Beaver River Field

Conventional Assets• Minimal capital spending on conventional assets - Expenditures focused on

short payouts rather than rates of return

1650 AMEC Place 1650 AMEC Place 801 Sixth Avenue SW801 Sixth Avenue SW

Calgary, Alberta T2P 3W2 CanadaCalgary, Alberta T2P 3W2 CanadaTel: (403) 777 1185Tel: (403) 777 1185Fax: (403) 777 1578Fax: (403) 777 1578www.questerre.comwww.questerre.cominfo@questerre.cominfo@questerre.com