BQI...NEWS OILSANDS QUEST INC. AMEX:BQI Cusip#678046103
Oilsands Quest provides operations update, reports on status of drilling program
DATE: February 15, 2007
FOR IMMEDIATE RELEASE:
Oilsands Quest provides operations update, reports on
status of drilling program
Calgary, Alberta -- Oilsands Quest Inc. (Amex: BQI), formerly CanWest Petroleum Corporation, reports that drilling on its oil sands exploration permits in northwest Saskatchewan is continuing, with a total of 76 holes drilled between November 3, 2006 and February 13, 2007. At the present time, six drilling rigs are at work and two more are expected to be on site and drilling before the end of February. Drilling results continue to show continuity of bitumen resources over a large area. The company is focusing on the Axe Lake Discovery area, which was toured by its board of directors last week during a two-day meeting held at Oilsands Quest's Axe Lake base camp.
Continued drilling success
Since this winter's exploration program began on November 3, 2006, 76 holes have been drilled with total drilling of 16,500 metres (54,000 feet), and 58 holes (76.3 percent) have encountered meaningful intercepts of bitumen-bearing McMurray formation. The thickness of the McMurray formation in these holes is as substantial as 45 metres (148 feet). Bitumen saturation and net pay thicknesses will be determined following third-party core and laboratory analysis, which will take several months to conduct. To date, over the last two winters of exploration of the Axe Lake Discovery area, drilling has covered 32 sections (32 square miles).
"We continue to be extremely encouraged by the continuity of the oil sands resource and the thicknesses we are encountering," said Christopher H. Hopkins, President & Chief Executive Officer of Oilsands Quest, who three years ago put together the team that is focused on proving the extension of commercially viable oil sands deposits from Alberta across the border and into Saskatchewan. "It is truly exciting to watch our drilling program prove our original geological concept," he said. "Everyone involved in our program has a sense that we're making history for the province of Saskatchewan and for Western Canada's oil sands industry."
Status of winter 2006/07 exploration program
Drilling operations, which proceed around the clock and in virtually all weather conditions, have been running smoothly this winter, despite winter temperatures as low as minus 47 degrees Celsius (minus 52 degrees Fahrenheit) and the fact that, on a per hole basis, drilling is taking longer than last winter, due to tougher drilling conditions caused by higher content of granitic and quartzitic boulders throughout the overburden. At the
present time, conditions appear favourable for Oilsands Quest to achieve approximately 150 holes by the end of March, 2007, when drilling licenses for the winter program expire. The three camps on the company’s permit lands are now set to accommodate and support all facets of this winter’s exploration program.
"Although I am disappointed we will drill only about 150 holes this winter, with every hole, we are gathering important geological data and mapping the location and extent of the oil sands resources," said Mr. Hopkins. "In addition, we have substantially increased our exploration efforts with geophysical surveys that will help target our drilling activities."
Airborne electromagnetic and magnetic surveys have been underway since February 4, with approximately 850 kilometres (528 miles) completed to date. In addition, following the successful trial of a 2-D seismic program earlier in the season, a 120-kilometre (74-mile) seismic program will commence on February 15. Eight seismic rigs and a 45-person workforce are being deployed in this effort.
Board of directors approves plan to initiate pre-commercialization studies
"During our board of directors’ tour of the Axe Lake Discovery area last week, I was very proud of our accomplishments," said T. Murray Wilson, Executive Chairman of Oilsands Quest, who joined the company in May 2006 following a long career as an international investment banker specializing in energy resources. "Over the years, I have been to more than 30 remote exploration sites around the world. Our Axe Lake operation stacks up with the best of them as a leading example of how to go about executing a major, ground-breaking exploration program in the most technically and environmentally effective manner."
"Notwithstanding the fact that we are still in the early days of our exploration and testing programs, and we have only just begun to assess the economic viability of the Axe Lake Discovery, I am convinced that we are dealing with a world-scale oil sands resource," Mr. Wilson said. "However, considerable study by the company and its technical, financial and economic advisors will be required."
Although the Axe Lake Discovery has not yet been determined to be a commercial project, management believes its oil sands resources could be suitable for in situ recovery. Therefore, the board of directors has approved a plan to initiate pre-commercialization studies. Oilsands Quest has initiated planning for the development of large-scale resource recovery simulation tests to test the quality of the oil sands and bitumen characteristics and to investigate alternative recovery mechanisms from the Axe Lake Discovery during the summer of 2007. Laboratory simulation testing is required in advance of potentially undertaking experimental field studies on the most promising of the recovery techniques. Field tests will be undertaken as soon as possible, subject to regulatory approvals.
Assumptions about the commercial viability of the resource potential or whether current recovery processes will be effective cannot be determined without further drilling, testing
and analysis. In order to undertake the required technical studies in a timely manner,
the company is engaging a number of third-party technical specialists and collaborating with agencies of the Province of Saskatchewan, including the Saskatchewan Research Council.
Next operations update
Oilsands Quest expects to release its next operations update during the first week of April, following formal completion of the winter drilling program on March 31. At that time, the company will again report the number of holes drilled, an indication of drilling success and an overview of its plans for activities during the spring and summer months.
Forward-Looking Information
Except for statements of historical fact relating to the company, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" "will" or "could" occur. Forward-looking statements such as the references to Oilsands Quest Inc.'s drilling program, geophysical programs, testing and analysis programs and timing of such programs are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, which include but are not limited to risks inherent in the oil sands industry, regulatory and economic risks, and risks associated with the company's ability to implement its business plan. There are uncertainties inherent in forward-looking information, including factors beyond Oilsands Quest Inc.'s control, and no assurance can be given that the programs will be completed on time, on budget or at all. Oilsands Quest Inc. undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. The risks and uncertainties set forth above are not exhausting. Readers should refer to Oilsands Quest's current annual report on Form 10KSB and other document filings, which are available at www.sedar.com and at www.sec.gov for a detailed discussion of these risks and uncertainties and details regarding the location and extent of the Oilsands Quest permit lands.
For more information:
General inquiries and retail investors, contact Hedlin Lauder Investor Relations Ltd.
Toll Free 1-800-299-7823
Office 403-232-6251
Email irinfo@hedlinlauder.com
Institutional investors, contact The Buick Group
Toll Free 1-877-748-0914
Office 416-915-0915
Email jbuick@buickgroup.com
www.oilsandsquest.com