Questerre to acquire Brazilian shale oil firm for 65 million shares

CALGARY - Questerre Energy Corporation (TSX,OSE:QEC), currently trading at $0.22 with a market capitalization of $93.59 million, announced Tuesday it has entered into a definitive agreement to acquire Parana Xisto SA (PX Energy), a privately held Brazilian shale oil production and refining company, through acquisition of its parent companies. The company’s stock has shown strong momentum, delivering a 33.33% return year-to-date. According to InvestingPro analysis, Questerre appears to be overvalued at current levels.

The deal involves issuing 65 million common shares of Questerre, with 15 million shares to be issued upon closing and the remaining 50 million shares to be released in two tranches based on performance milestones. While the company holds more cash than debt on its balance sheet, InvestingPro data indicates it has been quickly burning through cash reserves.

PX Energy currently produces approximately 4,500 barrels of oil equivalent per day, with plans to increase production to 6,000 barrels per day by August 31, 2026.

"This acquisition is a rare opportunity for us to gain the expertise and capacity to advance our multi-billion barrel oil shale resource in Jordan," said Michael Binnion, President and CEO of Questerre, in a press release statement.

As part of the transaction, Questerre plans to transfer its Quebec-based assets into a separate subsidiary company, with existing shareholders maintaining their position in these assets through either preferred shares of Questerre or of the new entity.

The acquisition is subject to several conditions, including satisfactory due diligence, board approval, regulatory approvals from the Toronto Stock Exchange and Oslo Stock Exchange, and third-party approvals including waivers from bondholders and convertible noteholders.

Questerre has retained Clarksons Securities AS to advise on PX Energy’s existing debt, which includes US$80 million in senior secured bonds and US$8 million in convertible promissory notes. The company maintains a current ratio of 1.41, indicating adequate liquidity to meet short-term obligations. Unlock more detailed financial insights and 8 additional key ProTips with InvestingPro.

PX Energy has operated for over thirty years using technology developed by Petrobras, with integrated mining and refinery operations in Brazil.

The transaction is expected to strengthen Questerre’s position in oil shale development and complement its existing investments in environmentally responsible hydrocarbon technologies.

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