Questerre forms joint venture with Nice Capital for Brazil oil shale

CALGARY - Questerre Energy Corporation (TSX,OSE:QEC), a $101 million market cap energy company whose stock has gained nearly 47% year-to-date according to InvestingPro data, announced Monday it has entered a binding term sheet for a 50/50 joint venture with Nice Capital Holdings Ltda to develop Parana Xisto SA (PX Energy), an oil shale production and refining company in southern Brazil.

Nice Capital is part of Nimofast Group, a private fuel importer and distributor in Brazil with annual revenues of approximately $2 billion. The joint venture will be equally controlled by both companies, with shared management rights and board representation.

The partners have committed to an initial liquidity provision of up to $50 million to be shared equally, with priority given to securing third-party financing. Questerre indicated it can fund its share through existing financial resources if equity contributions are required in the near term. InvestingPro data shows the company maintains strong liquidity with a current ratio of 2.12 and holds more cash than debt on its balance sheet. Want deeper insights? InvestingPro offers 6 additional key tips about Questerre's financial position.

As part of the arrangement, Ramon Reis, Nimofast's founder, and William Con Steers will join Questerre's board of directors. Nimofast will receive warrants to acquire 40 million Questerre common shares, exercisable when the company's shares trade at a weighted average price of $0.50 per share over 20 consecutive trading days.

Questerre also reported it is finalizing plans to spin out its Quebec-based assets before issuing any new common shares related to the PX Energy acquisition.

"This joint venture combines our experience with the upstream business of resource and technology development, with the downstream distribution and logistics experience of Nimofast," said Michael Binnion, Questerre's President and CEO, in the press release.

The completion of the joint venture remains subject to regulatory approvals, including clearance from Brazil's Administrative Council for Economic Defense, and execution of a definitive joint venture agreement. With revenue growth of 9.47% in the last twelve months and an overall Financial Health score of FAIR according to InvestingPro, investors can access comprehensive analysis and real-time metrics through an InvestingPro subscription.

In other recent news, Questerre Energy Corporation has announced a definitive agreement to acquire Parana Xisto SA, a Brazilian shale oil production and refining company. The acquisition will be completed through the issuance of 65 million common shares of Questerre. Initially, 15 million shares will be issued upon closing the deal, with an additional 50 million shares to be released in two tranches contingent on performance milestones. This strategic move marks a significant development for Questerre as it expands its footprint in the shale oil sector. The acquisition highlights Questerre's commitment to enhancing its production capabilities and refining operations. These recent developments are likely to attract attention from investors and industry analysts.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.