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CALGARY, Alberta, Dec. 01, 2025 (GLOBE NEWSWIRE) — Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) is pleased to announce its plans to consolidate its remaining common interest in Red Leaf Resources, Inc. (“Red Leaf”) by exchanging Red Leaf common stock for Questerre Class A voting common stock (“Questerre Common Stock”). Red Leaf is a privately held technology company headquartered in the United States whose principal assets include proprietary HCCO® shale processing technology and mineral leases in Utah. Questerre currently owns approximately 40% of Red Leaf's share capital.
Michael Binnion, President and CEO of Questerre, commented: “The consolidation of Red Leaf ownership is the next step in our shale strategy. Their patented HCCO® technology for producing oil from shale with integrated carbon capture remains, in our view, an attractive opportunity to open up access to shale globally. Together with the acquisition of PX Energy, we now have an integrated shale platform that combines new technology, including carbon capture, existing mining and processing operations and access to resources in Utah, the Kingdom of Jordan and Brazil. As a first step, our operations in Brazil could provide an ideal platform to advance a small-scale commercial HCCO project.”
Red Leaf's assets include proprietary HCCO® technology, a Utah shale mineral lease, a permit to build a wax processing plant and ownership of more than 7,000 acres in the Uintah Basin, as well as cash and investments of more than $9 million. According to a third party valuation report prepared as of December 31, 2024, the acquisition price for Red Leaf was $43 million less the applicable non-control and competitiveness discount, resulting in an acquisition price of $7.5 million after working capital adjustments.
Shareholders representing approximately 40% of Red Leaf's common shareholders, excluding Questerre, which represents a majority of the non-Questerre shareholders, have agreed to exchange their shares of Red Leaf common stock for shares of Questerre common stock, subject to the satisfaction of conditions precedent under the terms of the share purchase agreement. The selling shareholders are expected to comply with the provisions of Red Leaf's shareholders' agreement requiring the remaining common shareholders to accept the offer on the same terms. Subject to tax and other considerations, the transaction intends to include Red Leaf preferred stock representing $1.9 million in principal and accrued dividends. This participation will be structured through a buyout or acquisition of their properties by Questerre. The majority of the preferred stock, including shares held by the CEO and representing more than 60% of the outstanding preferred stock, have indicated their support for the transaction.
The exchange ratio is based on a thirty-day weighted average price of $0.31 ($0.22) per Common Share. Based on the number of Red Leaf shares outstanding using a notional price of $21 per Red Leaf share and an exchange ratio of 94 shares of Questerre common stock per share of Red Leaf, the Company may issue up to a maximum of 20 million shares of common stock to Red Leaf shareholders to acquire all of the remaining common stock of Red Leaf. The common shares will be issued in accordance with applicable prospectus exceptions in Canada and Norway and in accordance with applicable securities laws in the United States. Closing of the transaction is subject to receipt of necessary approvals, with an initial closing scheduled for later this month.
Questerre is an energy technology and innovation company. The Company is leveraging its experience gained from the early discovery of low permeability reservoirs to acquire significant high quality resources. We believe we can successfully transform our energy portfolio.
Kesterr believes the future success of the oil and gas industry depends on balancing the economy, environment and society. We are committed to being transparent and respecting the public's role in making important decisions for our energy future.
Advice Regarding Forward-Looking Statements
This press release contains certain statements that constitute forward-looking statements or information (“forward-looking statements”) within the meaning of applicable securities laws in Canada. Any statements regarding Questerre's expectations, beliefs, plans, goals, objectives, predictions, projections, objectives, assumptions, information and statements about possible future events, conditions and results of operations or performance are not historical facts and may be forward-looking in nature. Forward-looking information is often, but not always, provided using words or phrases such as “anticipates,” “aims,” “seeks,” “seeks,” “believes,” “may,” “could,” “could,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,” “waymarks,” “projects,” “ongoing,” “ongoing,” “expects,” “intends,” and the like). words or phrases that suggest future results. Forward-looking information in this press release includes, but is not limited to, the proposed consolidation of Red Leaf's remaining capital and the timing, structure and maximum share issuance; obtaining stock exchange and regulatory approvals and any other required third party or shareholder approvals; and the strategic benefits of the Red Leaf consolidation, including potential synergies and advancement of the HCCO commercial project.
Although Questerre believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them, as Questerre can give no assurance that they will prove to be correct. Because forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Current conditions, economic and otherwise, make assumptions, although reasonable when made, subject to greater uncertainty. Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by the forward-looking information.
Events or circumstances could cause actual results to differ materially from those projected as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the Company's control, including, but not limited to: the following risk factors: additional financing requirements; exploration, development and production risks; volatility in the oil and gas industry; prices, markets and marketing of crude oil and natural gas; liquidity and significant capital requirements of the company; prices, markets and marketing of crude oil and natural gas; political uncertainty; non-governmental organizations; changes in investor sentiment; volatility of the global financial market; unfavorable economic conditions; alternatives and changes in demand for petroleum products; environmental risks; regulatory risks; management's failure to execute its business plan; competition from other issuers; expiration of licenses and lease agreements; Indigenous Claims; possible failure to realize expected benefits from acquisitions; and reputational risks.
Additional information regarding certain of these risks, expectations or assumptions, and other risk factors can be found in the Company's Annual Information Form for the year ended December 31, 2024 and other documents available under the Company's profile at www.sedarplus.ca. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof, and Questerre undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.
This press release is not intended for publication or distribution, directly or indirectly, in the United States. This press release does not constitute an offer of securities for sale in the United States. The securities may not be offered or sold in the United States or to or for the account or benefit of U.S. Persons (as those terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”)) absent registration or an exemption from registration. The securities referred to herein have not been and will not be registered under the United States Securities Act or any state securities laws and therefore may not be offered for sale in the United States except in transactions exempt from registration under the United States Securities Act and applicable state securities laws. There are no public offerings of securities in the United States. This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor is there any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
