Questerre Energy Corporation's first phase of the work program at the Beaver River Field in British Columbia was successfully completed earlier this month. Preparations are under way to begin the second phase in early 2006.

The summer work program targeting production from the shallow Mattson sands at the Field commenced in mid-August 2005. The work program was managed on behalf of the operator by High Arctic Energy Services.

The first entry, A-6, was successfully completed and prepared for a fracture stimulation that is expected to enhance production. The well flowed gas upon perforating and the operator reported that the built-up Mattson pressure was 17,380 kPa, or 2.5 times the pressure estimated by the company's independent reserve engineers in their evaluation.

On the second well, B-2, based on a static gradient pressure analysis, there was less than 400 psi pressure depletion in the Nahanni, indicating the potential for further gas recovery. This well is a prime candidate for a cost-effective Nahanni sidetrack utilizing underbalanced drilling technology and will be preserved as such.

The re-entry of the third well, A-2, was also completed and the well has been prepped for a fracture stimulation. The operator estimates built-up bottomhole pressure to be similar to the A-6 well.

The second phase will involve the fracture stimulation of the two wells and the sidetrack of a third well in the first quarter of 2006.

The original Mattson completions consisted of acid stimulations that in all but one case were unsuccessful. The fracture stimulation planned for the wells will utilize Poly CO0 to limit the amount of water exposed to the formation by replacing it with liquid CO2, thereby minimizing formation damage.

The sidetrack of the third well, B-1, is scheduled for the end of the first quarter 2006. The sidetrack will twin an existing well into the Mattson that initially tested at 12 MMcf/d during the initial completion in 1968.

Michael Binnion, president and CEO, commented, "We are very pleased with the very successful downhole operational results. This is a very difficult area to operate in and the operator together with their Integrated Project Manager, High Arctic, have overcome all downhole problems to date. The gas inflows with no signs of water, together with higher than expected pressures in the low permeability Mattson sands, are very encouraging, and we look forward to test results early next year."