Questerre reports on proposed ban in Quebec

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February 22, 2022, Calgary, Alberta -- Questerre Energy Corporation ("Questerre"
or the "Company") (TSX,OSE:QEC) issued a report to shareholders following the
introduction by the Government of Quebec of Bill 21, An Act mainly to end
petroleum exploration and production and the public financing of those
activities.

Michael Binnion, President and Chief Executive Officer of Questerre, stated,
"Our company has more than a thirty-year history in the natural gas industry in
Quebec. Our founding shareholder, Terrenex, and its partners, drilled our first
well here in 1991. The law proposes to revoke and cancel our license agreements
that were freely entered into by the Province  of Quebec at relevant  times. It
also expropriates our property rights with no meaningful compensation instead of
reaffirming the principle of just compensation based on adequate value."

Over the years, we entered into many different license agreements with the
Government of Quebec that clearly outlined our rights and obligations. We were
required by the province to spend a substantial  amount of money each year to
explore for natural gas in Quebec. We were also responsible for safety and the
environment. In return, we were granted rights to produce any discovery we made.
We fulfilled our duties and safely operated under these agreements with
virtually no complaints or problems. During this time, we were in good faith
investing money in the province while the Quebec Government administered our
agreements in a fair and reasonable manner.

Things changed when we finally made a potentially very commercial discovery.
After years of no issues, suddenly there were complaints when we proposed to
appraise and produce our discovery, not just spend money.

For some historical context, in the 1970s oil and gas policy changed
dramatically in Quebec. The new policy was to make Quebec independent in energy.
It was a strategic imperative that the province would be better off using its
own resources. To this end, a provincially owned oil and gas company, Société
Quebecoise d'Initiatives Petrolieres ("SOQUIP"), was started in 1970 to use
Government money to explore for oil and gas. SOQUIP was reorganized after
spending millions and not making a significant discovery. To facilitate more
rapid exploration, in 1982, the Government expropriated resource rights from
thousands of Quebecers and gave them fair and just compensation of a royalty in
return. 

The policy attracted private companies like ours who did eventually find
success. The royalties granted to private citizens are now very valuable due to
our work. The proposed law will expropriate these royalties from thousands of
Quebecers with zero proposed compensation. There is no representative of these
Quebec citizens being consulted by the Government on Bill 21.

After our discovery, we were told by successive Governments that our project
required social acceptability in addition to legal compliance for us to produce
the natural gas we discovered. We committed our company to excellence in social
acceptability to comply with this new requirement.

We contributed to the Strategic Environmental Assessment on oil and gas activity
conducted in Quebec. It is the most comprehensive environmental study on oil and
gas in Canada. The conclusion of this study was the risks were low and
manageable. We have seen through decades of experience elsewhere, that this is
true.

We also consulted at length on a new energy policy in Quebec. This policy
committed to a lower emissions future and included natural gas development to
reach those goals. We also consulted on a new environmental law and regulations
that are among the strictest in North America. We also consulted on a new Green
Book and hydrocarbon law and the associated regulations. Up until September
2018, the Government of Quebec promised us a legal framework to obtain social
license and comply with our license agreements. Even after 2018, the new
Government indicated if our project gained social acceptability it could
proceed.  

We responded to the guidelines of the Green Book and the public comments on
social acceptability of the new Government. Over this time, we engaged in
considerable and comprehensive discussions and consultation with stakeholders.
Based on the feedback from citizens of Quebec, including through several BAPE
processes, we completely redesigned our approach to production and even
consumption of natural gas. 

In good faith, we committed to processes for near zero impact development, with
a goal of zero emissions, zero toxic fluids, zero drinking water impact and zero
fracturing. We agreed to give towns a share of profits and secured their
support. We received support from many farmers groups and unions. We also agreed
to give First Nations an interest in the net profits and an equity option
covering their traditional territories. The new law proposes to confiscate these
interests from First Nations with no compensation and the First Nations have not
been invited to the consultations on the law.

As a result of our work, according to Leger polling from last fall, only 13% of
Quebecers oppose our project with its new design. We believe it is more than
fair to claim we have achieved social acceptability in Quebec. When we
approached the Government with our new zero impact approach and confirmation
that we believed we had reached a fair level of social acceptability, the
unexpected response was to announce publicly a ban on Quebec oil and gas
production. The reason given was to reduce greenhouse gas emissions in spite of
independent evidence and studies, that demonstrate local production materially
reduces global emissions. Local natural gas would use new carbon technology and
avoid emissions from the long-range processing and transportation of natural
gas.

Given our over thirty-year history of operating responsibly according to our
license agreements and the law, plus our obvious and successful social
acceptance  progress, the Government announcement that it will break its
agreements with us and its word to us, seems arbitrary and capricious. We
understand the Government believes it has the prerogative to change its mind,
change the law and not follow its own  contracts. Yet, we are unaccustomed to
see a developed nation confiscate the rights and ownership of its honest
contractual partners while not even offering them fair, just and adequate
compensation. 

From an environmental perspective, this 'ban and block' approach has been proven
ineffective time and time again for emissions and society. Ironically, this
outdated mindset will lock Quebec into substantially higher emissions for much
longer, likely decades. The modern approach is to transform our energy sources
to low emissions energy with new carbon technology. This has led to our circular
economy model to move forward on both the environment and energy in Quebec. As a
result, there is no public utility in revoking our license agreements; it will
instead make the global environment worse, and the province will continue to
support and to be dependent upon others for its natural gas supply.

This is contrary to all sustainable development rules. One of which being, that
the site of production should always be as close as possible to the site of its
consumption. It is that principle which forbids Quebec from shipping its waste
to less developed countries.

Through following the law, and spending hundreds of millions over a long period
of time, we succeeded in finding something of great value. The Quebec Government
may decide to block us from developing it and revoke our licenses and its word.
But the discovery once made cannot be undiscovered and it has tremendous value
to whomever owns it. 

We think the Government of Quebec is making a fundamental mistake on a project
that enhances Quebec society and has broad popular and local support. However,
even if the Government chooses not to produce it but to keep it as a strategic
reserve of natural gas, it confers great value to the citizens of Quebec. Though
it is more likely, a future Government will choose to produce and profit from
this giant gas field, as modern energy transformation technology becomes obvious
to all. Whatever the Government pays us will be much, much less than the value
to Quebec and its citizens. It is an unfair deal for our thousands of small
shareholders compared to the opportunity to develop our discovery as originally
agreed and promoted by the Government.

After all this time and our significant investments, we will of course spend
whatever time and money is required for our many individual and institutional
investors from Norway, Canada and around the world to be treated fairly. We have
been blessed with loyal shareholders who have supported our efforts to succeed
in Quebec, including backing us on a world-leading approach to energy
transformation. We plan to work to amend and improve this law through the
consultation process and the collaboration of other interested parties, and take
whatever action appears necessary to protect our rights. The province has
created legitimate expectations that investors would be treated fairly. It
cannot simply fail to satisfy these expectations it has fueled and promoted.
Predictability and trust are two defining components of free market economies
seeking foreign investment. Bill 21 lacks both.

Mr. Binnion added, "It is not reasonable the actual impacted parties are not
included in the consultations for this proposed law. Our efforts will also go to
protecting small towns, ordinary Quebec citizens and First Nations who like our
shareholders are equally impacted by the arbitrary approach of Bill 21. Given
our project is demonstrated to be aimed at reducing global environmental
impacts, there is no public utility in disadvantaging so many groups and the
reputation of Quebec as a free society."

We acknowledge and greatly appreciate that every day Quebecers have been open
minded and that by listening to their concerns, and changing our approach, they
responded with their support. We know this is not an issue of Quebec culture and
ordinary Quebecers who are fair minded people who we count as friends.

Our future depends on progress and discoveries. Progress does not arise from
bans or boycotts. It comes from innovative ways to use what we know, and what we
discover, differently. 

Questerre is an energy technology and innovation company. It is leveraging its
expertise gained through early exposure to low permeability reservoirs to
acquire significant high-quality resources. We believe we can successfully
transition our energy portfolio. With new clean technologies and innovation to
responsibly produce and use energy, we can sustain both human progress and our
natural environment. 


Questerre is a believer that the future success of the oil and gas industry
depends on a balance of economics, environment, and society. We are committed to
being transparent and are respectful that the public must be part of making the
important choices for our energy future.

For further information, please contact:

Questerre Energy Corporation
Jason D'Silva, Chief Financial Officer
(403) 777-1185 | (403) 777-1578 (FAX) | Email: [email protected]

Advisory Regarding Forward-Looking Statements

This news release contains certain statements which constitute forward-looking
statements or information ("forward-looking statements") including, Questerre's
commitment to processes for near zero impact development with a goal of zero
emissions, zero toxic fluids, zero drinking water and zero fracturing,
Questerre's plan to seek to have Bill 21 amended or, if necessary, enforce its
rights under it agreements with the Government of Quebec and the potential
impacts of Bill 21 on Questerre, First Nations and Quebecers. Forward-looking
statements are based on several material factors, expectations or assumptions of
Questerre which have been used to develop such statements and information, but
which may prove to be incorrect. Although Questerre believes that the
expectations reflected in these forward-looking statements are reasonable, undue
reliance should not be placed on them because Questerre can give no assurance
that they will prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve inherent risks
and uncertainties. Further, events or circumstances may cause actual results to
differ materially from those predicted as a result of numerous known and unknown
risks, uncertainties, and other factors, many of which are beyond the control of
the Company, including, without limitation: the implementation of Bill 21 by the
Government of Quebec and certain other risks detailed from time-to-time in
Questerre's public disclosure documents. Additional information regarding some
of these risks, expectations or assumptions and other factors may be found under
in the Company's Annual Information Form for the year ended December 31, 2020,
and other documents available on the Company's profile at www.sedar.com. The
reader is cautioned not to place undue reliance on these forward-looking
statements. The forward-looking statements contained in this news release are
made as of the date hereof and Questerre undertakes no obligations to update
publicly or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.

Certain information set out herein may be considered as "financial outlook"
within the meaning of applicable securities laws. The purpose of this financial
outlook is to provide readers with disclosure regarding Questerre's reasonable
expectations as to the anticipated results of its proposed business activities
for the periods indicated. Readers are cautioned that the financial outlook may
not be appropriate for other purposes.

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