Oilsands Quest Claims Raven Ridge a Discovery, Engineers Axe Lake

Oilsands Quest Inc. announced its independent resource estimates for its Axe Lake Discovery and its Raven Ridge Discovery. Raven Ridge has been reclassified to a Discovery from an "area of interest". Oilsands Quest also announced the initialization of engineering plans for the first 30,000 barrels per day commercial project planned to develop a portion of the Axe Lake Discovery and provides an update on its reservoir test program.

McDaniel & Associates Consultants Ltd. conducted an independent resource estimate of a portion of Oilsands Quest's permit lands, based on data obtained from the results of drilling up to March 26, 2008 and other sources and including the physical examination of cores and geophysical logs.

The area of the discovered resource estimate within the Axe Lake Discovery covers approximately 41 sections of Permits PS00208 and PS00210 located within Townships 94 and 95, Ranges 24 and 25W3 in Saskatchewan, approximately 115 kilometers (69 miles) northeast of Fort McMurray. The area of the discovered resource estimate within the Raven Ridge Discovery covers approximately 10 sections located within Townships 93 and 94, Range 1W4 in Alberta, directly to the east of the Axe Lake Discovery area (plus 38 sections for the undiscovered resource estimate).

The total area covered by these discovered resource estimates represents approximately 4.6% of Oilsands Quest's total contiguous permit and license lands.

Bitumen resources within the portion of the Axe Lake Discovery area reviewed by McDaniel & Associates have been classified as discovered resources due to the density of delineation drilling on this property. Bitumen resources within the portion of the Raven Ridge Discovery area have been classified as both discovered resources and undiscovered resources, as much of the Raven Ridge area remains undrilled. With respect to the discovered resources, there is no certainty that it will be commercially viable to produce any portion of the resources.

With respect to the undiscovered resources, there is no certainty that any portion of the resources will be discovered and, if discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. These estimates of discovered and undiscovered bitumen resources have not yet been sub-classified based on recoverable volumes, as additional reservoir data is required to determine the optimal in-situ exploitation method for the Axe Lake and Raven Ridge Discoveries. The estimates have been prepared and presented in accordance with the Canadian standards set out in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 (NI 51-101). In December 2007, NI 51-101 was amended to provide further guidance on standards of disclosure of this nature. A key element of the new amended standards prescribes that estimates of bitumen resources must relate to the most specific categorization of resources. Under the COGEH classification system, & discovered resources" are sub-classified further as "contingent resources and discovered unrecoverable resources.The determination of which portions of the discovered and undiscovered resources at Axe Lake and Raven Ridge can be deemed to be contingent and prospective, respectively, and which portions of the estimates are deemed to be unrecoverable at this time requires that the evaluator prepare an estimate of this proportionate breakdown.

McDaniel Associates is of the opinion that significant portions of the discovered and undiscovered bitumen resources at Axe Lake and Raven Ridge are potentially recoverable using existing demonstrated technologies. However, insufficient reservoir data exists at this time to allow McDaniel Associates to estimate the quantities of recoverable and unrecoverable volumes underlying the current estimates of discovered resources and undiscovered resources at Axe Lake and Raven Ridge.

Similar to other bitumen accumulations within the eastern portion of Alberta, the Axe Lake and Raven Ridge Discovery areas lack a distinct overlying shale zone. McDaniel Associates is of the opinion that the absence of a distinct overlying shale zone may preclude the use of certain high-pressure in-situ recovery methods, but that 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 existing technologies as well as other low pressure in-situ extraction methods currently in pilot testing within other areas of the Athabasca Oil Sands region. At this time, Oilsands Quest is actively engaged in executing its reservoir test program and related laboratory simulation studies that will support the technical review and analysis of the suitability of each of these methods for extraction operations at Axe Lake and Raven Ridge. Potential extraction methods that may be applicable to Axe Lake and Raven Ridge include low-pressure SAGD operations, enhanced SAGD, SAGD combined with methane injection to manage steam-chamber growth, and electro-thermal heating. Oilsands Quest has received interim results from laboratory simulation and computer simulation studies that indicate there is good potential for bitumen recovery using hot water and/or steam and steam/solvents. Further, these studies indicate that it is reasonable to expect that steam pressures can be managed and controlled to ensure that penetration above the McMurray bitumen-containing formation is limited and that heat losses to the overburden would be minimal. These simulation studies are being conducted to assist in the specification of pressure and temperature conditions that will form part of the on-site reservoir test program later this year.

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