Oilsands Quest Expands Position with Saskatchewan Land Purchase

Axe Lake, Saskatchewan
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Oilsands Quest has expanded its land position with the acquisition of five strategically located oil sands exploration licenses and one oil shale exploratory permit from the Province of Saskatchewan's land sale of August 13, 2007. The company's successful bids will significantly enhance its oil sands holdings in northwestern Saskatchewan and oil shale holdings in the Pasquia Hills area of east-central Saskatchewan.

The sale includes lands offered in the first ever bid process for Crown oil sands and oil shale rights in Saskatchewan. For Oilsands Quest, these are its first oil sands exploration licenses and oil shale permits acquired under Saskatchewan's new regulations issued in May 2007. The company's existing oil sands exploration permits were granted under the terms of The Oil Shale Regulations, 1964 and these regulations, subject to minor amendments and inflationary adjustments, will continue to apply to Oilsands Quest's existing permit lands in the Province.

Oil sands exploration licenses

Oilsands Quest acquired five of the six blocks of oil sands exploration licenses offered in the sale covering a total of 44,484 hectares (109,920 acres) for an aggregate cost of $2.25 million Cdn, plus annual rental of $1.75 per hectare. The licenses are for oil sands rights from the surface to the top of the Devonian geologic formation for a term of five years. The blocks of land are located in Townships 90 and 91, Ranges 21 to 26 West of the 3rd Meridian. All of the blocks are located south of the company's existing exploration permits in Saskatchewan; two are on the Alberta border.

Oil shale exploratory permit

Oilsands Quest acquired one of the two oil shale exploratory permits in the Pasquia Hills area offered in the sale, totaling 33,900.11 hectares (83,769 acres), for a total work commitment of $301,568 during the first two years of the permit. Thereafter, the minimum annual expenditure requirement is $2.00 per hectare for the remaining term of the permits plus an annual rental of $0.25 per hectare. Oilsands Quest's bid committed the highest amount of eligible expenditures on the permit lands during the first two years of the five-year permit. The permit is for oil shale rights from the surface to the top of the Precambrian geologic formation and is located in Townships 44 and 45, Ranges 1 to 3 West of the 2nd Meridian.

Total land position

As a result of the August 13 land sale, Oilsands Quest's land holdings in Saskatchewan and Alberta have increased substantially, as summarized below.

                                         Saskatchewan           Alberta
                                      Hectares    Acres   Hectares    Acres
    Oil Sands
    Exploration Permits(x)             205,595   508,026    27,136    67,053
    Exploration Licenses(x)             44,483   109,918         -         -
    Lease (Eagles Nest)                      -         -     9,216    22,773
    Totals                             250,078   617,944    36,352    89,826

    Oil Shale
    Exploration Permits                198,155   489,640         -         -

    (x) The oil sands exploration permits and exploration licenses in
        Saskatchewan and Alberta are contiguous. 

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