Oct. 15, 2009 (PR Newswire) --
CUSIP # 678046 10 3
NYSE Amex: BQI
CALGARY, Oct. 15 /PRNewswire-FirstCall/ - Oilsands Quest Inc. (NYSE Amex: BQI) ("Oilsands Quest", or "the Company") today announced the release of independent resource estimates for a portion of its Axe Lake and Raven Ridge properties as well as the results of business conducted at its annual meeting which was held on Wednesday, October 14, 2009, in Calgary. The estimates were prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"), at the request of Oilsands Quest with an effective date of April 30, 2009.
In mid-2008 the Company released McDaniel's independent estimates of discovered and undiscovered bitumen resource volumes, which were prepared in accordance with the standards set out in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 ("NI 51-101"). In late 2008, McDaniel classified a portion of the discovered resources as contingent resources. These contingent resource estimates were prepared for the drilled portions of the Axe Lake and Raven Ridge areas only. The Company has not completed estimates for the remainder of Axe Lake and Raven Ridge, or at Wallace Creek, which the Company believes are prospective. McDaniel has used existing legacy drill data at Eagles Nest as well as interpolated data from adjacent geology in accordance with Canadian reporting standards to estimate discovered, undiscovered and prospective resources. The lands over which the resource assessment was conducted comprise about 11% of our land holdings.
This resource estimate incorporates the results of our 53 well drilling program at Axe Lake in late 2008, and at Raven Ridge in early 2009 and updates the previous estimates provided in December 2008 which was based upon 330 wells drilled up to mid-2008.
Similar to some other bitumen accumulations within the eastern portion of Alberta, the Axe Lake and Raven Ridge areas lack a distinct overlying shale formation. The absence of this may preclude the use of certain high-pressure in-situ recovery methods, but the quality of the reservoirs and high bitumen saturations present at the Axe Lake and Raven Ridge areas provide the potential for extraction using a number of recovery methods, re-configured for our reservoirs.
The Company is engaged in undertaking reservoir test programs and related laboratory and reservoir simulation studies to determine the optimum configuration of existing thermal, solvent-based and other, in-situ recovery methods for use in our reservoirs at Axe Lake, Raven Ridge and elsewhere. The recovery methods Oilsands Quest has developed and is testing are designed to be effective in the presence or absence of an overlying shale formation. Our recovery processes may offer higher efficiency and superior recovery than steam assisted gravity drainage ("SAGD").
Oilsands Quest is continuing to advance reservoir testing programs to evaluate our recovery methods. Under the COGEH guidelines, any evaluation of our contingent resource volumes and economics is limited to the use of recovery methods that are developed and verified by testing in our reservoir. While at this time we do not intend to use SAGD as our recovery method, the Company engaged McDaniel to conduct its evaluation as an interim measure and this evaluation was completed assuming the use of SAGD. The McDaniel report summarizes the estimated volumes of economically recoverable, contingent resources at Axe Lake and Raven Ridge. The remaining bitumen in place volumes are categorized under COGEH as unrecoverable at this time. The company anticipates that successful reservoir testing will result in a significant re-categorization from unrecoverable to contingent resources.
The following tables set out our resource estimates for Axe Lake, Raven Ridge and Eagles Nest as reported by McDaniel. The Axe Lake area is located within Townships 94 and 95, Ranges 24 and 25WM within the Province of Saskatchewan, approximately 115 kilometers northeast of the City of Fort McMurray. The Raven Ridge area is located immediately to the west of the Axe Lake area, within Townships 93 and 94, Range 1W4M, within the Province of Alberta. Eagles Nest is located in the Athabasca oil sands region in the Province of Alberta in Township 101, Range 13W4M.
