AUS
NZ
UK
CA
USA
IND
_12_01_2025_07_35_58_127568.png)
_05_16_2023_17_11_27_393572.jpg)
Highlights
- Questerre plans to acquire the remaining common equity of Red Leaf Resources through a share exchange valued at approximately US$7.5 million.
- Shareholders representing a majority of non-Questerre Red Leaf shares have agreed to the exchange, with preferred shareholders also expected to participate.
- The transaction is structured to issue up to 20 million Questerre Common Shares, subject to regulatory approvals in Canada, Norway, and the United States.
Questerre Energy Corporation (TSX:QEC) has announced plans to consolidate its remaining equity interest in Red Leaf Resources, Inc. through a share exchange. The move aims to convert the outstanding Red Leaf common shares into Class “A” Common voting shares of Questerre, advancing the company’s strategy to integrate Red Leaf’s assets and patented technology into its energy portfolio.
Red Leaf Resources Assets and Valuation
Red Leaf Resources is a private US-based technology company with key assets including patented HCCO® oil-shale processing technology, mineral leases in Utah, a permit for a wax processing facility, and title to over 7,000 acres in the Uintah Basin. The company also holds cash and investments exceeding US$9 million. According to a third-party valuation as of December 31, 2024, Red Leaf’s total value is US$43 million, with adjustments for control and marketability resulting in an acquisition price of US$7.5 million, subject to working capital adjustments.
Share Exchange Agreement
Questerre currently owns approximately 40% of Red Leaf’s common equity. Shareholders representing a majority of the remaining non-Questerre common shares have agreed to exchange their Red Leaf shares for Questerre Common Shares, with conditions precedent outlined in the share purchase agreement. Preferred shareholders, representing US$1.9 million in principal and accrued dividends—including more than 60% held by Red Leaf’s CEO—have indicated support for participation, either through redemption or acquisition of their ownership by Questerre.
Transaction Mechanics and Issuance Details
The exchange ratio is based on a thirty-day weighted average Questerre share price of CAD $0.31 (US$0.22) per Common Share. Using a deemed value of US$21 per Red Leaf share and an exchange ratio of 94 Questerre Common Shares per Red Leaf share, Questerre may issue up to 20 million Common Shares to complete the acquisition. The shares will be issued under applicable prospectus exemptions in Canada and Norway and in compliance with U.S. securities legislation. Closing is contingent upon regulatory approvals, with an initial closing anticipated by the end of the month.
Strategic Outlook
Questerre Energy leverages its expertise in low-permeability reservoirs to acquire and develop high-quality energy resources. The consolidation of Red Leaf Resources aligns with Questerre’s focus on integrating innovative technology, expanding its portfolio, and maintaining a balance between economic performance, environmental considerations, and societal impact.
