Oilsands Quest Receives Go-Ahead for 25-Hole Drilling Program

CanWest Petroleum and its 54.5% owned operating subsidiary, Oilsands Quest Inc., jointly announce that the Saskatchewan government has approved the Environmental Protection Plan for Oilsands Quest's initial 25 core-hole drilling program on its oil sands exploration permits in northwest Saskatchewan. This is the key regulatory approval required, the remaining permit approvals being procedural and expected in the next few days. On this basis, Oilsands Quest has mobilized personnel and equipment and expects to initiate exploratory drilling before the end of October 2005.

This is the first phase of a multi-phase exploration drilling program planned by Oilsands Quest to prove that its permit lands contain eastern extensions of the rich bitumen trends found in the adjacent Athabasca oil sands region in Alberta. Bitumen deposition on the company's lands was proven by core-hole drilling results and associated geophysical log analysis undertaken in the 1970s. Visible bitumen-bearing outcrops in the area together with current drilling results in Alberta adjacent to the Saskatchewan border have led Oilsands Quest to undertake this program, Saskatchewan's first major oil sands exploration program.

In the first phase of Oilsands Quest's exploration program, 25 core holes will be drilled between October and the end of December 2005. This drilling will be conducted on the company's permit lands closest to previously drilled and cored holes having proven bitumen shows. Oilsands Quest's drilling contractor is expected to be onsite and ready to commence drilling before the end of October.

A second phase winter drilling program of approximately 125 holes is planned. The application for regulatory approval for this program is being prepared.

"Our program is an important 'first' for the province of Saskatchewan and we recognize and respect that precedents are being set," said Christopher Hopkins, President & CEO of Oilsands Quest. "Throughout the application and approval process, we have worked closely with the various Saskatchewan government departments, including Industry & Resources, Environment and Northern Affairs, as well as with the Clearwater River Dene First Nation and adjacent Metis communities."

Thornton Donaldson, President of CanWest Petroleum Corporation, said, "We are very proud of the initiative shown by Oilsands Quest and of the fact that this exploration program could be of tremendous importance to the province of Saskatchewan. If Oilsands Quest proves easterly extensions of commercially viable oil sands deposits, it could significantly change the future of Saskatchewan's oil and gas industry."

To support its application, Oilsands Quest undertook an extensive process of consultation with communities on or near its permit lands and a comprehensive program of ecological surveys and environmental studies on the target lands.

"As part of this environmental effort, we are utilizing a Constraints Mapping System, which is considered a state-of-the-art approach to environmental assessment," said Mr. Hopkins. "This will provide an important baseline of environmental data for ongoing activities and for subsequent applications for regulatory permits and approvals."

Exploration permits held by Oilsands Quest cover 846,680 acres of land which represents one of the largest land positions assembled for exploration in the Athabasca oil sands region. At present, the closest bitumen production in the Athabasca oil sands region is Suncor's Firebag development located about 30 miles (50 km) west of Oilsands Quest's permit boundary; it is currently producing 10,000 to 15,000 barrels of bitumen per day.

A private company incorporated in Alberta, Oilsands Quest commenced operations in late 2004. The company is focused solely on oil sands exploration, implementing the exploration programs that will identify, qualify and quantify bitumen resources on its lands. The principals of the company have extensive experience in oil sands exploration. With exploration success, Oilsands Quest's plan for development may include other companies that have development experience and financial resources. Oilsands Quest is a subsidiary of CanWest Petroleum Corporation.