Oilsands Quest Reports Saskatchewan Success

Oilsands Quest Inc. said that drilling results to date in its winter 2006/07 exploration program on its oil sands exploration permits in northwest Saskatchewan indicate an 87 percent success ratio. Between November 3, 2006 and January 15, 2007, a total of 31 holes were drilled and, of these, 27 were cored through bitumen-bearing McMurray formation.

"We are extremely pleased with our drilling results to date," said Christopher H. Hopkins, President & Chief Executive Officer of Oilsands Quest Inc. "Our 24-hole drilling program last winter achieved an 80 percent success ratio, with 19 holes intercepting the bitumen-bearing McMurray formation. We have surpassed last winter's success rate to a significant degree. In addition, our drilling to date covers a much larger area."

The 31 core holes drilled to date (27 cored) in the current drilling program cover approximately 17 sections (one section equals one square mile) adjacent to the West Block drilled last year, where 17 holes (14 cored) tested an area of approximately seven sections. This winter's drilling results to date demonstrate the continuation of Oilsands Quest's original discovery over a total area of about 24 sections.

"We have growing confidence in the continuity of this resource," said Mr. Hopkins. "Due to the extent of land covered with our drilling, its proximity to the original discovery and our consistent drilling success ratio, we have designated the discovery area plus additional prospective land associated with it as the Axe Lake Discovery." The Axe Lake Discovery area represents about 13.6 percent of Oilsands Quest's net permit lands.

This winter's drilling program began on November 3, 2006 with a single drilling rig. Following the Christmas break, drilling resumed on January 4, 2007. At the present time, five core hole drilling rigs are at work. The company expects six rigs to be drilling by the end of January and eight rigs to be deployed by the end of February.

The company is making progress toward its goal to drill up to 100 delineation holes in the area of its original discovery; it will also shortly begin exploration drilling to the north and south of the Axe Lake Discovery. The company has drilling permits for up to another 150 exploratory holes this winter. Drilling progress has been slower than planned, however, due largely to tougher drilling conditions. "We are encountering numerous large boulders in the overburden in this area," explained Mr. Hopkins. "As a result, it is now taking about five days to drill each hole compared to about three days per hole last year. To offset this effect, we are expanding the use of other exploration techniques."

This winter, Oilsands Quest will undertake a seismic survey to identify drilling targets. In addition, the company has commissioned an airborne geophysical survey program for late January. The airborne survey will combine electro-magnetic and conventional magnetic surveys over a large area of Oilsands Quest's exploration permits to provide valuable data to assist in the selection of drill hole locations.

The next update of Oilsands Quest's exploration activities is planned for mid-February, when the company will again report the number of holes drilled, an indication of drilling success and the number of drilling rigs on site.

Oilsands Quest expects to be able to announce detailed information such as estimates of bitumen resource volumes, reservoir characteristics and alternatives regarding commercial potential by October 2007.

Oilsands Quest Inc. (formerly CanWest Petroleum Corporation) is conducting the province of Saskatchewan's first major oil sands exploration program on its oil sands permits, which are located in northwest Saskatchewan, directly across the border from the Athabasca oil sands in Alberta. Oilsands Quest is focused on proving the extension of commercially viable deposits of oil sands from Alberta into Saskatchewan.