Oilsands Quest to Test Axe Lake Reservoir

Oilsands Quest announced a field test for the reservoir at its Axe Lake Discovery in northwest Saskatchewan. Pending regulatory approval, testing in early 2008 is planned to evaluate reservoir response to varying pressures and temperatures.

"This reservoir test reflects the fact that we are accelerating our activities at Axe Lake in preparation for our field pilot program," said Christopher H. Hopkins, President and CEO of Oilsands. Testing will include a vertical well bore with injection and production capabilities, along with adjacent observation wells. Steam will be injected into the oil sands formation at varying temperatures and pressures so responses can be monitored and evaluated. >P> Reservoir testing data will contribute to the design of a field pilot program that is scheduled for start-up in 2009, subject to regulatory approval. Oilsands and technical consultants are evaluating in-situ recovery methods, with emphasis on existing recovery methods utilizing steam and solvents.

"We anticipate Axe Lake will be suitable for in-situ production techniques that industry is currently using or piloting," said Mr. Hopkins. "A combination of steam with a small amount of solvent is expected to result in excellent recovery factors for Axe Lake. This reservoir test will play an important role in determining the in-situ methods we employ in our field pilot program."

"The company is now embarked on two distinct paths," Mr. Hopkins explained. "With the Axe Lake Discovery, Oilsands is focused on delineation drilling, field testing, the field pilot program and other development activities. Second, having drilled less than five percent of the company's land holdings in Saskatchewan and Alberta, it continues to aggressively explore the land base which holds the potential for multiple world-class discoveries."

Oilsands is an energy exploration company exploring Canada's largest contiguous oil sands land holding. The company is the originator of Saskatchewan's emerging oil sands industry.