Quebec bill boosts Junex, Questerre and Petrolia
New legislation contains provisions allowing for oil and gas exploration
Questerre Energy Corp. and other energy companies with properties in Quebec jumped after the provincial legislature passed a bill that will pave the way for more oil and gas exploration.
Bill 106 passed Quebec’s National Assembly in a 62-38 vote early Saturday after an overnight debate ahead of the holiday break. The legislation is meant to implement Quebec’s clean energy plan but also contains provisions allowing for energy exploration, potentially including fracking.
Calgary-based Questerre jumped 38.75 per cent to $1.11 in Toronto. Junex Inc., which holds exploration rights in the Gaspe peninsula, gained 7.04 per cent to 76 cents, while Petrolia Inc., which is seeking to drill for oil and gas on Anticosti Island, climbed 15.79 per cent to 22 cents.
Bill 106 creates a new agency to promote Quebec’s transition to cleaner energy yet also lays out a framework for energy development. Environmental, aboriginal and citizen groups argued that the bill’s mandate is contradictory, that debate was rushed and that it should have included a fracking moratorium and more protection for landowners.
“This new law is a milestone for Quebec,” Questerre chief executive officer Michael Binnion said Monday in a statement. The bill “lays the groundwork for the introduction of the associated regulations in early 2017. It will also allow us to accelerate the work to secure our social license to operate in the Lowlands.”
Questerre holds about one million acres and has drilled test wells in the Utica shale formation along the St. Lawrence River, according to its website.
Questerre’s shares have now doubled in the past week.
“The upside potential in the Questerre share price is the development of the Utica acreage in Quebec,” Teodor Sveen-Nilsen, an analyst at Swedbank AB, said in a note to clients Monday. “Thus, any positive development in Quebec justifies upside.”
Questerre now has 70 per cent odds of commercially developing its Quebec Lowlands properties, up from 50 per cent, Sveen-Nilsen said.
The new regulations would come into place within six to 12 months, with drilling activity likely beginning in 2018, SveenNilsen said.
While Canada’s National Energy Board doesn’t record Quebec as producing any marketable hydrocarbons of its own, the province holds enough gas to meet its own needs for about 100 years.