Oilsands Quest Provides Bitumen Resource Estimate Update and Results of
Annual Meeting
CUSIP No. 678046 10 3 NYSE Amex: BQI
In mid-2008 the Company released McDaniel's independent estimates of discovered and undiscovered bitumen resource volumes, which were prepared in accordance with the standards set out in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 ("NI 51-101"). In late 2008, McDaniel classified a portion of the discovered resources as contingent resources. These contingent resource estimates were prepared for the drilled portions of the Axe Lake and
This resource estimate incorporates the results of our 53 well drilling program at Axe Lake in late 2008, and at
Similar to some other bitumen accumulations within the eastern portion of Alberta, the Axe Lake and
The Company is engaged in undertaking reservoir test programs and related laboratory and reservoir simulation studies to determine the optimum configuration of existing thermal, solvent-based and other, in-situ recovery methods for use in our reservoirs at Axe Lake,
Oilsands Quest is continuing to advance reservoir testing programs to evaluate our recovery methods. Under the COGEH guidelines, any evaluation of our contingent resource volumes and economics is limited to the use of recovery methods that are developed and verified by testing in our reservoir. While at this time we do not intend to use SAGD as our recovery method, the Company engaged McDaniel to conduct its evaluation as an interim measure and this evaluation was completed assuming the use of SAGD. The McDaniel report summarizes the estimated volumes of economically recoverable, contingent resources at Axe Lake and
The following tables set out our resource estimates for Axe Lake,
Table 1 Axe Lake Bitumen Resource Estimates ------------------------------------------------------------------------- Millions of Barrels Low Best High ------------------------------------------------------------------------- Discovered Resources(1) 1,402 1,869 2,337 ------------------------------------------------------------------------- Economic Contingent(2) n/a 151 466 ------------------------------------------------------------------------- Table 2 Raven Ridge Bitumen Resource Estimates ------------------------------------------------------------------------- Millions of Barrels Low Best High ------------------------------------------------------------------------- Discovered Resources(1) 760 1,013 1,267 ------------------------------------------------------------------------- Economic Contingent(2) n/a n/a 320 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Undiscovered Resources(1) 245 673 1,755 ------------------------------------------------------------------------- Prospective Resources(1) 10 136 565 ------------------------------------------------------------------------- Table 3 Eagles Nest Bitumen Resource Estimates ------------------------------------------------------------------------- Millions of Barrels Low Best High ------------------------------------------------------------------------- Discovered Resources(1) 221 367 612 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Undiscovered Resources(1) 926 1,573 2,682 ------------------------------------------------------------------------- Prospective Resources(1) 18 178 717 ------------------------------------------------------------------------- Table 4 Summary of Bitumen Resource Estimates Axe Lake, Ravens Ridge & Eagles Nest ------------------------------------------------------------------------- Millions of Barrels Low Best High ------------------------------------------------------------------------- Discovered Resources(1) 2,383 3,250 4,215 ------------------------------------------------------------------------- Economic Contingent(2) n/a 151 786 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Undiscovered Resources(1) 1,171 2,246 4,437 ------------------------------------------------------------------------- Prospective Resources(1) 28 314 1,283 ------------------------------------------------------------------------- (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 economic contingent resources in the McDaniel evaluation, as tabulated above. In addition, a portion of the undiscovered resources tabulated herein have been further categorized as prospective resources in the McDaniel April 30, 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 estimate of contingent resources is uneconomic under McDaniel's price forecast and cost assumptions where no estimate of economic contingent resources were assigned by McDaniel in their report of April 30, 2009. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. The recoverable volumes estimated by McDaniel have been classified as economic 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.
The estimates in the above tables reflect Oilsands Quest's 100% interest in the Axe Lake,
Annual Meeting Results
The following Class A directors were re-elected to the Board of Directors: Christopher H. Hopkins,
"We are very pleased to have both
Once the formal meeting was adjourned,
Definitions of Technical Terms used in this release
McDaniel's independent estimates were prepared in accordance with the standards set out in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 ("NI 51-101"). Discovered resources (equivalent to discovered petroleum initially in-place) are defined within COGEH as that quantity of bitumen that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered resources includes production, reserves, and contingent resources; the remainder is classified as unrecoverable. Discovered resources are the summation of all bitumen present, without qualitative or quantitative assessment to determine the exploitable portion of that resource.
Contingent resources are defined within COGEH as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status.
Prospective Resources are defined within COGEH as 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 subdivided 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.
Discovered unrecoverable resources (equivalent to discovered unrecoverable petroleum initially-in-place) are defined within COGEH as that portion of discovered resources which is estimated, as of a given date, not to be recoverable by future development projects. A portion of these quantities may become recoverable in the future as commercial circumstances change or technological developments occur; the remaining portion may never be recovered due to the physical/chemical constraints represented by subsurface interaction of fluids and reservoir rocks.
A range of prospective, undiscovered, discovered and contingent resources estimates (low, best and high) was prepared to reflect a range of technical and economic uncertainties and was determined in accordance with COGEH. A low estimate is considered to be a conservative estimate of the quantity that will actually be recovered, which under probabilistic methodology reflects a P90 confidence level. It is likely that the actual remaining quantities recovered will exceed the low estimate. A best estimate is considered to be the best estimate of the quantity that will actually be recovered. Under probabilistic methodology, this term is a measure of the central tendency of the uncertainty distribution (most likely/mode, P50/median, or arithmetic average/mean). It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. A high estimate is considered to be an optimistic estimate of the quantity that will actually be recovered, which under probabilistic methodology reflects a P10 confidence level. It is unlikely that the actual remaining quantities recovered will exceed the high estimate.
Cautionary Statement about Forward-Looking Statements
This news release includes certain statements that may be deemed to be "forward-looking statements." All statements, other than statements of historical facts, included in this news release that address activities, events or developments that our management expects, believes or anticipates will or may occur in the future are forward-looking statements. Also, forward-looking statements are frequently indicated by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "potential", "prospective" and other similar words, or statements that certain events or conditions "may" "will" or "could" occur. Forward-looking statements such as the amount and nature of future capital, development and exploration expenditures, the timing of exploration and test program activities, business strategies and development of our business plan and exploration and testing programs, the discovered and contingent resource estimates, and references to the Company's reservoir field testing and analysis program, and the timing of such program are based on the opinions and estimates of management and the Company's independent evaluators at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, which include but are not limited to risks inherent in the oil sands industry, regulatory, financing and economic risks, and risks associated with the Company's ability to implement its business plan. There are uncertainties inherent in forward-looking information, including factors beyond Oilsands Quest's control, and no assurance can be given that the programs will be completed on time, on budget or at all. In addition, there are numerous uncertainties inherent in estimating discovered and contingent resources, including many factors beyond the Company's control. In general, estimates of discovered and contingent resources are based upon a number of factors and assumptions made as of the date on which the estimates were determined, such as geological, technological and engineering estimates which have inherent uncertainties, the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from actual results. All such estimates are, to some degree, uncertain and classifications of resources are only attempts to define the degree of uncertainty involved. The estimates contained herein with respect to discovered resources and to contingent resources that may be developed in the future have been based upon volumetric calculations and upon analogy to similar types of resources, rather than upon actual production history. Estimates based on these methods generally are less reliable than those based on actual production history. Subsequent evaluation of the same resources based upon production history will result in variations, which may be material, in the estimated resources. Additional information relating to our Company, including our Annual Report on Form 10K, can be found at www.sedar.com. Oilsands Quest undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements.
Cautionary Note to U.S. Investors - The
About Oilsands Quest
Oilsands Quest Inc. (www.oilsandsquest.com) is aggressively exploring Canada's largest holding of contiguous oil sands permits and licences, located in Saskatchewan and Alberta, and developing Saskatchewan's first global-scale oil sands discovery. It is leading the establishment of the province of Saskatchewan's emerging oil sands industry.
For further information: Riyaz Mulji, Manager, Investor Relations, Email: [email protected]; Investor Line: 1-877-718-8941
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