Oilsands Quest Inc. announced the resumption of drilling on its Saskatchewan permits and the initiation of drilling on its contiguous Alberta permits.
Oilsands Quest drilled 87 holes in its Fall 2007 drilling program in the Axe Lake Discovery area. Fall operations also included cutting approximately 500 miles (805 km) of seismic line covering 9.5 square miles (25 sq km). Since January 2006, Oilsands Quest has drilled a total of 261 exploration and delineation holes on its oil sands exploration permits in Saskatchewan.
The area of the Discovered Resources estimate within the Axe Lake Discovery covers approximately 36 sections (one township) of Permits PS00208 and PS00210 (100% Oilsands Quest) located in the north half of Township 94 and the south half of Township 95, Ranges 24 and 25 West of the Third Meridian. The Undiscovered Resource estimate within the Axe Lake Discovery covers approximately 72 sections in Townships 94 and 95 adjacent to the Discovered Resource locations (100% Oilsands Quest).
Oilsands Quest recently received regulatory approval to initiate drilling on its oil sands exploration permits in northeast Alberta which are contiguous to its Saskatchewan permits. Management has estimated total Undiscovered Resources of 4.5 billion barrels of bitumen on these lands totaling an area of approximately 106 sections (approximately 3 townships) located in Townships 92 to 94 West of the Fourth Meridian (100% Oilsands Quest) adjacent to the Saskatchewan border.
Two core-hole drill rigs are being deployed immediately with two more scheduled for arrival later in January. The drilling program of 30 holes will focus on structures identified in portions of Townships 93 and 94 by 2-D seismic programs conducted by Oilsands Quest in 2007. During fall 2007, more than 300 miles (480 km) of 3-D seismic line covering approximately five square miles (13 sq km) were cut over structures in Alberta adjacent to the Axe Lake Discovery in Saskatchewan.
All of the Company's Discovered and Undiscovered Resource estimates are of in place volumes of bitumen and do not represent recoverable volumes. There is no certainty that it will be commercially viable to produce any portion of the Discovered Resources. In the case of the Undiscovered Resources, there is no certainty that any portion will be discovered and, if discovered, that it will be commercially viable to produce. The independent Discovered Resources estimate is effective as of October 31, 2007 and Oilsands Quest's Undiscovered Resources estimates are effective as of July 12, 2007.
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