Questerre Energy Corp., a shale-gas producer, rose the most in more than three years in Oslo after the release of a report on its Montney acreage in Canada that analysts say confirms the area’s commercial potential.
The Calgary-based company gained as much as 31 percent, the most since Feb. 23, 2010, and traded 18 percent higher at 5.15 kroner as of 12:44 p.m. in the Norwegian capital. About 3.9 million shares have traded so far today, almost eight times the average daily volume during the past three months.
A third-party report showed that the company’s Montney acreage in Alberta has 132 million barrels of oil equivalent of contingent and prospective resources, Questerre said in a statement today. The company expects that as more wells are drilled and tested, the majority of those prospective resources will be reclassified as contingent resources and ultimately reserves, Chief Executive Officer Michael Binnion said.
Questerre, which owns acreage in the Saskatchewan, Alberta and Quebec regions of Canada, as well as in parts of Utah and Wyoming, is betting on growing acceptance of the fracking technology used to extract shale resources. The drilling technique, which involves blasting a mixture of water, sand and chemicals underground to release fuel from rock, has been criticized by groups who fear water contamination.
Proponents of fracking say the benefits in Canada could mirror the U.S., where the exploitation of shale assets helped the country overtake Russia as the biggest producer of natural gas in 2009 and boosted oil production to a 21-year high.
Questerre’s report, conducted by Canadian oil consultant McDaniel & Associates Consultants Ltd., confirms the commercial potential for Questerre’s Montney acreage, Teodor Sveen Nilsen and Henrik Madsen, analysts at Swedbank First Securities, said in a note today.
“We see upside potential in a de-risking of the Montney assets through unlocking” resources with the use of technology, they said, reiterating a buy rating and 10 kroner price target.