Oilsands Quest Updates on Bitumen Resource Estimate for Asset in Alberta

Oilsands Quest announced the release of independent resource estimates for its Eagles Nest property in Northern Alberta. The estimates were prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"), at the request of Oilsands Quest with an effective date of June 30, 2009.

McDaniel has used existing legacy drill data at Eagles Nest as well as interpolated data from adjacent geology n accordance with Canadian reporting standards. Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.

Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further classified in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.

Table 1

Summary of Bitumen Resource Estimates

Eagles Nest as at June 30, 2009
-------------------------------------------------------------
Millions of Barrels Low Best High
-------------------------------------------------------------
Discovered Resources(1) 221 367 612
-------------------------------------------------------------
Undiscovered Resources(1)(3) 926 1,573 2,682
-------------------------------------------------------------
Prospective Resources(4) 18 178 717
-------------------------------------------------------------

"The Eagles Nest resource is similar to other in-situ Athabasca oil sands deposits, with a well developed Clearwater shale cap rock and is deserving of further delineation effort," said President and Chief Executive Officer, Christopher H. Hopkins.

The following table sets out our prior discovered, undiscovered and contingent resource estimates for Axe Lake and Raven Ridge combined with the current discovered, undiscovered and prospective resource estimates for Eagles Nest, all prepared 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.

Table 2

Summary of Bitumen Resource Estimates

Axe Lake, Ravens Ridge & Eagles Nest
-------------------------------------------------------------
Millions of Barrels Low Best High
-------------------------------------------------------------
Discovered Resources(1) 1,922 2,656 3,673
-------------------------------------------------------------
Contingent Resources(2) n/a 130 526
-------------------------------------------------------------

-------------------------------------------------------------
Undiscovered Resources(1)(3) 1,419 3,522 6,205
-------------------------------------------------------------
Prospective Resources(4) 18 178 717
-------------------------------------------------------------

(1) The Discovered Resource and Undiscovered Resource numbers are not estimates of the recoverable volume of bitumen. A portion of the discovered resources tabulated herein have been further categorized as contingent resources in the McDaniel December 2008 evaluation, as tabulated above. In addition, a portion of the undiscovered resources tabulated herein have been further categorized as prospective resources in the McDaniel June 2009 evaluation. The portion of the discovered resources and undiscovered resources that have not been classified respectively as contingent resources or prospective resources would be categorized under COGEH as unrecoverable at this time, pending further testing and recovery process development. There is no certainty that it will be commercially viable to produce any portion of the discovered resources. There is no certainty that any portion of the undiscovered resources will be discovered and, if discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

(2) The low estimate of contingent resources is uneconomic under McDaniel's price forecast and cost assumptions, therefore no low
estimate contingent resources were assigned by McDaniel in their report of December 2008. There is no certainty that it will be commercially viable to produce any portion of the discovered resources. The recoverable volumes estimated by McDaniel have been classified as contingent resources as opposed to reserves because not all of the conditions for commerciality have been met including corporate and regulatory approvals for development. The estimates of contingent resources have been prepared assuming the use of SAGD as
the recovery process.

(3) The Axe Lake & Raven Ridge data is based on McDaniel's report of April 2008 and Eagles Nest is based on McDaniel's report of June
2009.

(4) The Eagles Nest data is based on McDaniel's report of June 2009.

McDaniel is in the process of preparing an update to the bitumen resource estimates for Axe Lake and Raven Ridge based on the drilling completed in the 2008/2009 exploration program.

Possible Mining Interest Spin Off

To increase shareholder value the Company is contemplating the spinoff of its oil shale and other mineral assets in an attempt to unlock what management feels is the significant unrecognized value of these assets.

 

 

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