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Attention Business Editors
Oilsands Quest provides highlights of third quarter operational update and announces Chief Reservoir Engineer appointment
NYSE Amex: BQI
CALGARY, March 10 /CNW/ - Oilsands Quest Inc. (NYSE AMEX:BQI) ("OQI" or
"the Company") is evaluating the potential to develop its Axe Lake oil sands
discovery in northwestern Saskatchewan using typical steam-assisted gravity
drainage (SAGD) technology.
OQI recently drilled 16 core holes across Axe Lake reservoirs to improve
the understanding of the overburden characteristics and to test the potential
for the overburden to act as a cap rock to contain steam within the reservoir.
The preliminary results from an independent reservoir research laboratory show
that the core material is a dense clay-rich, low permeability cap rock which
demonstrates steam containment characteristics in physical laboratory testing
and reservoir computer simulations. The core samples are also being correlated
with the Axe Lake 3-D seismic data to determine the extent and continuity of
this cap across the various reservoirs.
The early results of the overburden testing indicate that the Company may
be able to produce bitumen using either a typical SAGD configuration or the
bottom up recovery process that OQI has been testing. OQI now believes that
the majority of the Axe Lake reservoirs could be developed using proven SAGD
bitumen recovery processes, while the remaining resources would likely be more
efficiently produced by way of the bottom up recovery configuration.
Based on the encouraging results from the cap rock testing, OQI is
developing plans to accelerate work on a new SAGD test pair of wells at Test
Site 1 using low pressure steam injection. As SAGD technology matures in the
oil sands industry, lower pressure SAGD approaches are proving to deliver
technical, economic and environmental benefits, as less energy is required to
mobilize the bitumen. The Axe Lake reservoir, with its high porosity,
permeability and homogeneity relative to most projects in Alberta, is well
suited to lower pressure thermal recovery.
"We are very pleased with these new developments pertaining to the
overburden testing," said T. Murray Wilson, Chairman, President and CEO of
OQI. "Our understanding of the Axe Lake reservoir and the overburden
characteristics has grown tremendously through our testing program. Using
proven SAGD oil sands recovery technology could advance our progress toward
commercial development, which is currently our top priority."
New senior operational expertise
OQI has hired Allison Aherne as its new chief reservoir engineer. In Ms.
Aherne's most recent roles, she led reservoir engineering and field operations
for Suncor's Firebag SAGD project. In previous positions with Devon Canada,
she also created a field reservoir development plan for the Jackfish SAGD
project, and worked on the Dover and Surmont fields as well. Ms. Aherne has a
Master's degree in Chemical Engineering with a specialty in petroleum from the
University of Calgary. She has over 10 years of directly relevant in situ oil
sands reservoir and operations experience that she will apply to OQI's
reservoirs at Axe Lake, Raven Ridge, Wallace Creek and Eagle Nest.
As well as Ms. Aherne, who joined the Company on March 8, 2010, OQI has
also recently added additional technical staff in geophysics, geology and
reservoir engineering. The recruiting process for a senior operating executive
is ongoing, as the Company continues to build the technical and operating
experience to move toward commercial development.
Wallace Creek drilling program
On March 10, 2010 OQI completed a nine hole exploration drilling program
on lands in the southwest corner of the Wallace Creek lease that are adjacent
to Cenovus' Borealis project area. Four of the wells drilled encountered
significant quantities of bitumen with two wells intercepting over 20 meters
of oil sand in the McMurray formation.
The Company is in the process of analyzing the geophysical logs and core
samples and expects to have an updated independent resource evaluation for its
properties later in the year.
For a more detailed operational update and management discussion, please
see our form 10-Q available at www.sec.gov and www.sedar.com and the
accompanying news release of March 10, 2010 available on our website at
www.oilsandsquest.com.
About Oilsands Quest
Oilsands Quest Inc. (www.oilsandsquest.com) is developing Saskatchewan's
first global-scale oil sands discovery at Axe Lake, while exploring one of
Canada's largest holdings of contiguous oil sands permits and licenses,
located in Saskatchewan and Alberta. It is leading the establishment of the
province of Saskatchewan's emerging oil sands industry.
Cautionary statement about forward-looking statements
This news release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the U.S. federal securities
laws. All statements, other than statements of historical facts, included in
this news release that address activities, events or developments that our
management expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such forward-looking statements include
discussion of such matters as:
<<
- the eventual outcome of the on-going physical laboratory testing and
reservoir computer simulations and correlation of the core samples
with the Axe Lake 3-D seismic data;
- business strategies and development of our business plan and drilling
programs;
- potential reservoir recovery optimization processes.
>>
Forward-looking statements are statements other than relating to
historical fact and are frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate",
"potential", "prospective" and other similar words or statements that certain
events or conditions "may" "will" or "could" occur. Forward-looking statements
such as references to Oilsands Quest's drilling program, geophysical programs,
reservoir field testing and analysis program, preliminary engineering and
economic assessment program for a first commercial project, and the timing of
such programs are based on the opinions and estimates of management and the
company's independent evaluators 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, lack of
infrastructure in the region in which the company's resources are located and
risks associated with the company's ability to implement its business plan.
Many of these risks and uncertainties are beyond the control of the Company.
The Company undertakes no obligation to update forward-looking statements 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.
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/For further information: Riyaz Mulji, Manager, Investor Relations,
Email: ir@oilsandsquest.com, Investor Line: 1-877-718-8941/
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