Oilsands Creates Oilsands Quest Technology

Oilsands Quest Inc. announced the formation of a subsidiary company devoted to in-situ oil sands technology assessment and development. The company also provided an update of recovery development and operations activities for its Axe Lake Discovery in northwest Saskatchewan.

Dr. Erdal Yildirim, who is Oilsands Quest's Executive Vice President, Project Development, has been appointed President of Oilsands Quest Technology Inc, a wholly owned subsidiary of Oilsands Quest Inc.

"The progress in development of oil sands technologies has been a significant driver in the growth, prosperity and environmental sustainability of the oil sands industry" said Dr. Yildirim, "yet it remains a relatively young industry, where a new wave of technological advancements is occurring through improvements to existing technologies, commercialization of emerging technologies and creation of new technologies generated by novel process concepts."

Oilsands Quest Technology has been created to be at the forefront of this technology wave, to maximize the value of its oil sands and oil shale assets and to generate new business opportunities. This will be accomplished by utilizing its in-depth technology expertise for testing and developing technologies most suitable to the characteristics of its natural resources.

Widely recognized within the industry for his leadership, experience and technical expertise, Dr. Yildirim has served in many managerial and executive capacities in the oil sands industry. He was the co-founder and chairman of the National Oil Sands Task Force during the period of 1993 to 1996 and was the co-founder and, since 1994, has been the Managing Director of the Canadian Oil Sands Network for Research and Development (CONRAD).

Drilling to date within the Axe Lake Discovery area has confirmed three reservoirs for potential development. The three reservoirs, of roughly equal size, contain the majority of Axe Lake's Discovered Resources. These reservoirs are the focus of Oilsands Quest's recovery development and production planning efforts.

In an extensive program of laboratory testing and reservoir simulation studies, Oilsands Quest, its technical consultants and its financial advisors are evaluating existing in-situ recovery techniques. These efforts have provided the initial definition of the field test program to evaluate reservoir response to varying temperatures and pressures of steam and steam with solvents. A program of reservoir testing at three sites within the Axe Lake Discovery is planned for the first half of 2008, subject to regulatory approval. The reservoir tests will provide up to 600 barrels per day of initial bitumen volumes in 2008 that will contribute data to the design of an in-situ test program of up to 10,000 barrels per day that is planned for start-up in 2009, subject to regulatory approval.

Oilsands Quest is operating two camps in Saskatchewan to support its winter 2008 drilling, seismic and reservoir testing activities. The Base Camp will accommodate up to 200 personnel and is located on the main access road adjacent to the company's 5,000-foot (1500-metre) airstrip in the northeast corner of the Axe Lake Discovery area. The new South Camp will accommodate up to 250 people and is located in Saskatchewan near the Alberta border, 12 miles (19 km) southwest of the Base Camp. It will provide support to operations in both Alberta and Saskatchewan. Drilling has commenced in Alberta on the company's permit lands. During the winter season, manpower is expected to peak at approximately 450 personnel.