Macro Tsimmis

intelligently hedged investment

Oilsands Quest (BQI) update #5

Posted by intelledgement on Thu, 24 Jan 08

Oilsands Quest (BQI) management announced today the expenditure of some of those monies raised with their shares offering late last year for the acquisition of the exploration rights to an additional 46,080 acres of land in Alberta. The cost was CDN$10,010,880 plus an annual rental fee of CDN$64,512. The acreage is contiguous to the land in Alberta that BQI already has…which in turn is contiguous with their Saskatchewan holdings. All told, the company has exploration rights to nearly 1.25MM acres now, including 0.61MM acres of oil sands properties in Saskatchewan, 0.14MM acres of oil sands properties in Alberta, and an additional 0.49MM acres of oil shale properties in Saskatchewan.

Looking ahead for the year, the company is presently conducting their annual winter exploratory drilling program which this year consists of operations in both Saskatchewan and Alberta. We should expect some preliminary results from the company this Spring and then more comprehensive results from third party analysts later in the year. This summer, if approved by Saskatchewan, BQI are expecting to start a pilot program of oil sands reservoir testing at three sites within the Axe Lake Discovery which should produce up to 600 BBLS/day of oil. The company are presently evaluating existing in-situ recovery techniques in laboratory testing and reservoir simulation studies to define this field test program, which will evaluate reservoir response to varying temperatures and pressures of steam and steam with solvents. The company plans to use the results to design an in-situ test program of up to 10,000 BBLS/day that is planned for start-up in 2009, subject to regulatory approval.

Looks as if quite a bit of the $75MM the company scored in the Nov-Dec 07 round of financing will be put to good use over the next 18 months or so.

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