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RESOURCES AND ENERGY SQUATEX INC DOES NOT RECOGNIZE THE COMPETENCE OF MR. MARC DURAND IN THE EXPLORATION AND PRODUCTION OF HYDROCARBONS IN QUEBEC

BROSSARD, November 22, 2017 – Resources & Energy Squatex Inc. (Squatex – www.squatex.com) (CSE: SQX / CSE: SQX.CN / CNSX: SQX) wants to respond publicly to several past and recent allegations often unsubstantiated, erroneous, untruthful or thoughtless of an engineer, retired professor from UQAM, Mr. Marc Durand, on or relate to the oil industry in Quebec and which now tend to distort the debate on the social acceptability of economic projects considered by this industry.
We particularly respond to an article recently published in Le Devoir on November 14, 2017 (http://www.ledevoir.com/environnement/actualites-sur-l-environnement/512898/aurons-nous-droit-a-un-changement-dans-le-dossier-des-hydrocarbures).
Mr. Durand introduces himself as an engineer in applied geology, which may suggest that he is a geologist while he is not a member of the Ordre des géologues du Québec (https://inscription.ogq.qc.ca/directory/SearchResults.aspx?FirstName=Marc&LastName=Durand). Moreover, according to his writings, Mr. Durand does not seem to have already worked significantly in the hydrocarbons sector to acquire his “expertise” in oil and gas.
In the article in Le Devoir, Mr. Durand first mentions his concerns about the future actions of government ministers (whom all Quebeckers elected to make decisions for everyone). We are in a democracy and everyone has the right to think what they want. On the other hand, when he says that “the possibility of finding conventional deposits … has always been low in Quebec”, lower than elsewhere in Canada yes, but possible since he fails to mention the work and discoveries of Squatex in the Lower St. Lawrence (http://squatex.com/?p=688) who demonstrated the existence in 2013 of the Massé structure. This structure covers more than 80km2 and contains porous and permeable reservoirs of conventional type which can contain per square kilometer a potential of 10 million barrels of oil and 10 BCF of gas (http://squatex.com/?p=688). This type of reservoir does not require any hydraulic fracturing to be produced, not at all to be explored. Like other geologists, we think that it can exist in many places in Quebec, including in the St. Lawrence Lowlands.
This is particularly the point in the article of Le Devoir talking about hydraulic fracturing that has somehow made us more startled and question the practical knowledge of Mr. Durand in this field. This efficient and safe production technique, used by some companies in the Utica shales, has greatly evolved since its first use in 1947. It is aimed only to create, when needed in deep unconventional reservoirs, very local fissures in a reservoir rock (with porosity) that lacks permeability to allow the circulation of hydrocarbons from the pores to the borehole for their production at surface. This technique is used very far from the surface and the water table. Every year, tens of thousands of wells are fractured all over the world without creating a problem. The energy that certain people and groups in Quebec put to spread misinformation to create an unjustified fear in people’s thinking is detrimental to Quebec’s development and economy. Prohibiting the fracturing process is no more and no less than prohibiting blue drills rather than red ones.
Another statement from the same article by Mr. Durand: “It is essentially the arrival of hydraulic fracturing in the scenery that has allowed some renewed interest in oil exploration at the end of 2008.”: It is not the case, it is the presence of thick and deep layers of shales in the St. Lawrence Lowlands, such as those explored elsewhere in the US, which in 2008 attracted geologists from new partner companies. Fracturing has nothing to do with their coming.
Squatex has invested and explored since 2001 in the Lower St. Lawrence and made the first important oil and gas discovery of conventional reservoirs in the St. Leon/Sayabec/Val Brillant Formations with a team of Quebec experts using conventional methods and techniques, or as Mr. Durand calls them, “normal”.
Mr. Durand’s writings and positions on the oil and gas industry in Quebec are causing a prejudice to Quebec companies by maintaining the speech of a minority refusing the economic development of this sector presenting a great potential, which currently employs more than 50,000 Quebecers and which could greatly improve our assessment of the fight against climate change. In addition, the climate of uncertainty created by this discourse and its peers prevents small Quebec companies from financing themselves on the public markets. In the medium and long term, these junior companies, for lack of capital, rather than, as Mr. Durand says for lack of possibility of conventional deposits, will leave room for foreign companies that will judiciously export their profits outside Quebec with or without social acceptability.

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