Oil Sands Quest Studying Feasibility of New Oil Sands Development in Canada

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Oil Sands Quest Incorporated (Calgary, Alberta), a subsidiary of CanWest Petroleum Corporation (OTC:CWPC)(Vancouver, Canada), is in the early economic evaluation phase of developing its proposed Firebag East oil sands development. Located in townships 88 through 99 in Western Saskatchewan, the prospect covers an estimated 1.4 million acres of land and potentially holds a resource of 1.5 billion barrels of bitumen in place in the McMurray and Wabiskaw paleochannel zones containing Athabasca Oil Sands.

Oil Sands Quest is in the process of initiating a two-season drilling program to shore up its preliminary data and to determine the commercial feasibility of constructing a 50,000- to 100,000-barrel-per-day bitumen production facility. The resource itself in will be extracted by steam-assisted gravity drainage (SAGD) technology and will be processed and diluent added onsite for transportation to a second party for upgrading. Still in its early development stages, Firebag East has pay zones as thick as 150 feet in the Wabiskaw formation and 58 feet thick in the McMurray zone, with grades of 7% to 9.1% oil by weight.

The property is adjacent to current and ongoing developments by Suncor Energy, Synenco Energy, Imperial Oil, Husky, and Petro-Canada. Their developments have a total of fourteen billion barrels of reserves between them, and total capital to be employed by them is more than $6.75 billion to develop their projects. The capital needed to develop Firebag East through to production of the first phase of development would be in the neighborhood of $375 to $500 million. Oil Sands Quest expects to select a front-end engineering and design firm some time in late 2006, if the drilling program meets with success. Construction on the Firebag East oil sands development could begin as early as late 2007 or early 2008, with first bitumen production slated for some time in late 2009 or early 2010.

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