Questerre's Preferred Shares Hit Oslo Exchange with Quebec Gas Wager

Questerre Energy will apply to list its Series 2 Preferred Shares on Euronext Growth Oslo, the company said Monday. The shares track the economic performance of the company's Quebec assets, including the Utica shale natural gas discovery. Subject to exchange approval, trading is expected to start on or around June 30.

The preferred shares were issued in January after a capital reorganization approved by common shareholders. The listing gives those shareholders direct liquidity in the Quebec exposure, CEO Michael Binnion said in a statement. "The market will have direct exposure to one of North America's most important undeveloped natural gas resources," he said.

The structure carries two possible payout paths. If a political and business solution permits development, common and preferred shareholders share the asset equally. Common shareholders must fund a 10-well program to demonstrate commercial progress. If development does not proceed, any financial compensation the company receives goes 95% to preferred shareholders and 5% to common shareholders.

An independent expert report puts potential damages related to the discovery between C$700 million and C$4.8 billion, Binnion said. To optimize tax treatment of any such distribution, preferred shares would convert into common shares based on the 90-day volume weighted average trading price of the common shares immediately before the distribution.