Questerre to Focus on Oil Shale in 2012

CALGARY, ALBERTA--(Marketwire - May 11, 2012) -

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

Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSLO:QEC) reported today on its operating and financial results for the first quarter of 2012.

Michael Binnion, President and Chief Executive Officer, commented, "Our significant investment in oil shale at the end of the first quarter capped a year of looking for new high-impact projects. Our recently acquired assets could add in excess of several hundred million barrels in resources, complementing our multi-Tcf discovery in Quebec. Our goal for the next two years is to move these assets along the learning curve towards commercial development."

He added, "To generate near-term cash flow and build capital value, we also invested in our conventional assets. Developing Antler remained a priority, though growth in the quarter was delayed as strict municipal road bans shut-in production. We successfully drilled our first well in the liquids-rich window of the Montney shale and the results were better than expected."

Highlights

• Invested $40 million in oil shale acquiring an equity interest in Red Leaf Resources Inc., licensing rights to their EcoShale process and a 20% interest in oil shale acreage in Wyoming
• Completed core hole drilling program on oil shale acreage in Pasquia Hills, Saskatchewan
• Spud first Montney well targeting liquids-rich natural gas in Alberta
• Early spring breakup and resulting road bans slowed light oil drilling program in Antler, Saskatchewan
• Improved oil weighting generated cash flow from operations of $3.29 million with average daily production of 725 boe/d
• Balance sheet strength preserved with $55 million in positive working capital and no debt

Production increased to 725 boe/d during the first quarter of 2012 from 650 boe/d in the prior year first quarter with growth impacted by road bans that shut-in production in Saskatchewan. With 85% of production from oil and natural gas liquids, Questerre reported cash flow from operations of $3.29 million (2011: $1.64 million). In addition to its $40 million investment in oil shale assets, Questerre invested $14.79 million in the first quarter of 2012. Approximately 80% was invested in Antler and the remainder was invested primarily in the Montney in Alberta and the core hole program for our oil shale acreage in Saskatchewan.

As at March 31, 2012, the Company reported a working capital surplus of $55.05 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 non-conventional oil and gas resources. The Company is currently developing a portfolio of oil shale assets in North America. It is also securing a social license to commercialize its Utica natural gas discovery in Quebec. The Company is underpinned by light oil assets and a strong balance sheet. Questerre is committed to the economic development of its resources in an environmentally conscious and socially responsible manner.

This media release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the potential to add several hundred million barrels in resources, moving these assets to commercial development, and the results from our Montney well. Although Questerre 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 Questerre. 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 information. As such, readers are cautioned not to place undue reliance on the forward looking information, 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, Questerre 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, net cash 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.

For the three months ended March 31,	2012		2011
Net cash from operating activities	$ 740,800		$ 866,496
Change in non-cash operating working capital	2,550,354		770,454
Cash flow from operations	$ 3,291,154		$ 1,636,950

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 direct 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 portions of the share based compensation liability and risk management contracts.