Questerre Implements Unconventional Oil Strategy in Third Quarter

CALGARY, ALBERTA--(Marketwire - Nov. 11, 2011) -

NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSE:QEC) reported today on its financial and operating results for the third quarter of 2011.

Michael Binnion, President and Chief Executive Officer, commented, "During the quarter, we started to execute our strategy to focus on unconventional oil. We expanded our drilling program and completed an acquisition at Antler to grow our light oil assets. Our new ventures team evaluated several early stage high-impact oil prospects that have the potential to complement our shale gas discovery in Quebec."

Highlights

• Evaluating unconventional oil opportunities to complement Quebec discovery
• Concluded light oil asset acquisition in Saskatchewan for $13.25 million
• Groundwork begins for strategic environmental assessment of shale gas in Quebec
• Growing oil weighting generated cash flow from operations of $3.01 million with production of 604 boe/d and current production over 700 boe/d
• Sustained financial strength with over $114 million in positive working capital and no debt

Weather and equipment related delays at Antler earlier this year delayed planned growth in production volumes. Average daily production increased marginally to 604 boe/d (2010: 649 boe/d) from 586 boe/d in the previous quarter. With production from the light oil acquisition replacing natural gas volumes from the Beaver River sale in May, Questerre's oil weighting increased to over 80% in the quarter (2010: 53%).

The improved oil weighting leveraged prices and increased sales to $4.33 million (2010: $2.95 million) from $4.14 million in the second quarter. Despite lower oil prices, improved operating netbacks and $0.5 million in other income translated into cash flow from operations for the quarter of $3.01 million (2010: $1.44 million), up from $2.27 million in the prior quarter.

As at September 30, 2011, the Company reported a working capital surplus of $114.19 million.

The term "cash flow from operations" is a non-GAAP measure. Please see the reconciliation elsewhere in this press release.

Questerre Energy Corporation is an independent energy company focused on unconventional oil and gas projects. The Company is developing a portfolio of light oil assets primarily in Saskatchewan. The Company is also leveraging its expertise to commercialize its Utica shale gas discovery in the St. Lawrence Lowlands, Québec. Questerre is committed to the economic development of its resources in an environmentally conscious and socially responsible manner.

This news release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the scope and timing of future operations in Québec and Saskatchewan. Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to the Company. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking statements. As such, readers are cautioned not to place undue reliance on the forward looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This news release does not constitute an offer of securities for sale in the United States. These securities may not be offered or sold in the United States absent registration or an available exemption from registration under the United States Securities Act of 1933, as amended.

Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.

This press release contains the terms "cash flow from operations" and "netbacks" which are non-GAAP terms. Questerre uses these measures to help evaluate its performance.

As an indicator of Questerre's performance, cash flow from operations should not be considered as an alternative to, or more meaningful than, cash flows from operating activities as determined in accordance with GAAP. Questerre's determination of cash flow from operations may not be comparable to that reported by other companies. Questerre considers cash flow from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund operations and support activities related to its major assets.

Cash Flow from Operations Reconciliation

For the three months ended September 30,		2011			2010
Cash flows from operating activities	$	2,397,426		$	592,523
Net change in non-cash operating working capital		611,139			846,143
Cash flow from operations	$	3,008,565		$	1,438,666

The Company considers netbacks a key measure as it demonstrates its profitability relative to current commodity prices. Operating netbacks per boe equal total petroleum and natural gas revenue per boe adjusted for royalties per boe and operating expenses per boe.

The Company also uses the term "working capital surplus". Working capital surplus, as presented, does not have any standardized meaning prescribed by GAAP and may not be comparable with the calculation of similar measures for other entities. Working capital surplus, as used by the Company, is calculated as current assets less current liabilities excluding the current portion of the share based compensation liability.