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About Questfire

Diversified assets. Solid cash flow. Oil-focused operations.

Profile

Questfire Energy Corp. is a junior oil and natural gas exploration and production company based in Calgary, Alberta. The Corporation has a diversified asset base of producing properties across much of Alberta, from deep Foothills geology in the far south, to shallow gas on the eastern Prairies, to liquids-rich gas and light oil in the Deep Basin-type plays of west central Alberta. The Corporation’s asset base contains multiple opportunities for capital-efficient addition of light oil production.

Questfire is led by a highly experienced management team with the full range of technical and financial skill sets required for successful exploration and development operations and creation of shareholder value.

Questfire was formed in early 2010 as a private corporation and spent the following year focused on assembling lands prospective for exploration drilling of conventional light and medium-gravity oil targets. In the fourth quarter of 2010 Questfire raised $1.9 million in seed capital by way of a private placement of flow-through shares.

In mid-2011 Questfire prepared to enter the public markets, issuing its prospectus on September 30, 2011. On October 18 of that year the Corporation closed its initial public offering, raising $6.2 million gross in an issuance of class A and class B shares. Questfire’s class A and class B shares commenced trading on the TSX Venture Exchange on October 26, 2011, with the stock symbols Q.A and Q.B, respectively. The Corporation has a total of 12.963 million class A shares and 2.056 million class B shares issued and outstanding.

By early 2012 Questfire had assembled lands at five properties in two core areas and drilled three exploration wells plus a re-entry of a standing well, all operated and 100 percent working interest, establishing its initial production and sales revenue.

In Nov. 2012 Questfire signed a letter of intent with a larger producing company to acquire assets with over 5,900 boe per day of natural gas-weighted production. The acquisition closed in late April 2013 with production of approximately 5,600 boepd and represented a transformative event for Questfire.

The acquired assets have given Questfire a significant base of production, with a long reserve life and low annual decline rate of only 10-12 percent, significant cash flow estimated at approximately $14 million for the remainder of 2013 (8 months), and a greatly expanded land and prospect inventory. The assets were significantly “under-worked” over the past number of years, with virtually no drilling in the last 5 years. This creates a rich base of low-risk, capital-efficient drilling, re-entry and optimization opportunities for Questfire.

Questfire’s management team has a strong track record of value creation at previous companies, most recently at Stonefire Energy Corp. Stonefire was a full-cycle energy company that the management team grew from inception with zero production to a peak of 1,400 boe per day over three years, while adding 7 million boe in proved plus probable reserves through the drillbit. Stonefire had low finding and development costs, a large land base, operated facilities, low operating costs, and a large vertical and horizontal inventory. In late 2009 Stonefire was sold for $75 million. The transaction generated an overall return on investment for original shareholders of 127 percent, after-tax, and a 23.9 percent compound annual rate of return, after-tax. All four of Stonefire‚Äôs share issuances realized positive after-tax returns.