Oilsands Quest announces reporting of the independent estimate of Discovered Resources at Axe Lake, provides activity update



    Amex:   BQI

    CALGARY, Nov. 5 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) announces that it
has received reporting of the independent estimate of Discovered Resources for
its Axe Lake Discovery in northwest Saskatchewan from McDaniel & Associates
Consultants Ltd. McDaniel & Associates has been retained by the company to
provide reservoir engineering, reserve and resource reporting and valuation
services.
    McDaniel & Associates has conducted an independent review and evaluation
of Oilsands Quest's Discovered Resources based on data obtained from the
results of drilling up to March 31, 2007 (the end of the winter 2006/07
drilling program) and other sources and including the physical examination of
cores and geophysical logs. McDaniel & Associates has reported to management
the following estimates of Discovered Resources (see definitions section
below) for the Axe Lake Discovery:

    
    Discovered Resources of Original Bitumen in Place
    -   Low Estimate  (P-90): 1.117 billion barrels;
    -   Best Estimate (P-50): 1.344 billion barrels; and,
    -   High Estimate (P-10): 1.547 billion barrels.
    

    The area of the Discovered Resources estimate within the Axe Lake
Discovery covers approximately 36 sections (one township) of Permits PS00208
and PS00210 (100% Oilsands Quest) located in the north half of Township 94 and
the south half of Township 95, Ranges 24 and 25 West of the Third Meridian. It
is approximately 50 kilometres (30 miles) east of Suncor's Firebag operations.
    McDaniel & Associates is a leader in the development of in-situ oil sands
evaluation methodology practices. The firm bases its evaluations on a thorough
characterization of the bitumen reservoir and integration of its understanding
of the technical application of in-situ exploitation. It has been involved in
providing reservoir engineering and valuation expertise to the majority of
in-situ oil sands projects under development in Western Canada today. Norwest
Corporation, which has a long association as Oilsands Quest's independent
geological consultant, will continue to provide geologic consulting and field
support. The services provided by Norwest and McDaniel & Associates are
complementary.
    McDaniel & Associates' Discovered Resource estimates described above are
based on the definitions and guidelines prepared by the Standing Committee on
Reserves Definitions of the Canadian Institute of Mining, Metallurgy and
Petroleum (Petroleum Society) as presented in the Canadian Oil and Gas
Evaluation Handbook (COGE Handbook). Those standards require that McDaniel &
Associates plan and perform a review and evaluation to obtain reasonable
assurance as to whether the resource estimate is free of material
misstatement. Oilsands Quest notes that the above estimates are of Discovered
Resources for the Axe Lake Discovery area only. They are determined through
drilling and therefore the estimates are based solely on the drilled area of
our Axe Lake Discovery.
    The previously reported 10.0 billion barrel management estimate of
Discovered and Undiscovered Resources continues to reflect management's
current opinion of the Discovered and Undiscovered Resources on Oilsands
Quest's lands: 1.5 billion barrels of Discovered Resources on the drilled area
of Axe Lake, now supported by McDaniel & Associates independent review and
evaluation described above; approximately 1 billion barrels of Undiscovered
Resources in the Axe Lake area; and 7.5 billion barrels of Undiscovered
Resources which are located elsewhere on Oilsands Quest lands (see definitions
section below). There is no certainty that Oilsands Quest will discover any
portion of the Undiscovered Resources and, if discovered, it may not be
economically viable or technically feasible to produce such resources.
McDaniel & Associates has not performed a review or evaluation of the
Undiscovered Resources estimate described above.

    Activities Update

    Activities on Oilsands Quest's contiguous land holdings in Saskatchewan
and Alberta are ramping up for an intensive winter 2007/08 program. At the
present time, Oilsands Quest is conducting delineation drilling in the Axe
Lake Discovery area to provide detailed geological definition for specific
reservoir field tests, as well as for pilot and development planning. Four
drilling rigs are currently at work. At the peak of drilling operations this
winter, the company expects to have a total of eight drilling rigs on its
permit lands conducting a balanced program of exploration and delineation
drilling. 2-D and 3-D seismic operations are underway on both the Saskatchewan
permits and adjacent Alberta permits. Approximately 230 people are currently
at work on the permit lands.

    Continuing to move toward commercialization of Axe Lake

    Oilsands Quest continues advancing its reservoir field test program for
the Axe Lake Discovery, which is planned for the first half of 2008, and is
subject to regulatory approval. This program is designed to evaluate the
reservoir's response to varying temperatures and pressures of steam. These
tests will contribute data to the design of the pilot in-situ production
program, which is currently planned for start-up in 2009. Oilsands Quest and
its technical consultants are evaluating in-situ recovery techniques for the
production pilot, with an emphasis on existing techniques that utilize steam
and steam with solvents.

    Definitions

    As defined in the COGE Handbook, "Discovered Resources are those
quantities of oil and gas estimated on a given date to be remaining in, plus
those quantities already produced from, known accumulations. Discovered
Resources are divided into economic and uneconomic categories, with the
estimated future recoverable portion classified as reserves and contingent
reserves, respectively."

    
    The Discovered Resources estimates described above were determined in
accordance with the COGE Handbook using the following mutually exclusive
categories:
    -   Low Estimate: This is considered to be a conservative estimate of the
        quantity of bitumen that exists within the accumulation, which under
        probabilistic methodology reflects a P90 confidence level.
    -   Best Estimate: This is considered to be the best estimate of the
        quantity of bitumen that exists within the accumulation. 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).
    -   High Estimate: This is considered to be an optimistic estimate of the
        quantity of bitumen that exists within the accumulation, which under
        probabilistic methodology reflects a P10 confidence level.

    Discovered Resources can be further classified into four sub-categories:
cumulative production; reserves; contingent resources; and unrecoverable
resources. The Discovered Resources disclosed by Oilsands Quest in its
independent Discovered Resource estimate can not at this time be classified
into one of these four sub-categories for the following reasons:
    1) cumulative production: no amount of production has yet taken place;
    2) reserves: Oilsands Quest has not yet determined what in-situ recovery
    process may be suitable for this Discovered Resource and consequently an
    in-situ recover factor has not been determined to estimate reserves;
    3) contingent resources: Oilsands Quest expects that the Discovered
    Resources will be economical, but commercial project economics have not
    yet been determined; and
    4) unrecoverable resource: Oilsands Quest expects that the Discovered
    Resources will be recoverable, but a suitable in-situ recovery process
    and consequently an in-situ recovery factor has not been determined, yet.
    The commercial viability of the Discovered Resources at the Axe Lake
    Discovery, or whether currently available commercial recovery processes
    will be applicable, cannot be determined without further drilling,
    testing and analysis.
    

    As defined in the COGE Handbook, "Undiscovered Resources are those
quantities of oil and gas estimated on a given date to be contained in
accumulations yet to be discovered."

    About Oilsands Quest

    Oilsands Quest Inc. is aggressively exploring Canada's largest contiguous
oil sands land holding by applying its technical expertise to develop multiple
global-scale discoveries. The company (www.oilsandsquest.com) is the
originator of Saskatchewan's emerging oil sands industry.

    Forward-looking information

    Except for statements of historical fact relating to the company, this
news release contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is frequently
characterized 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 Discovered Resource
estimate, and Undiscovered Resource estimate, references to Oilsands Quest's
drilling program, geophysical programs, reservoir field testing and analysis
program, the pilot in-situ production program, and timing of such programs 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 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 Undiscovered
Resources, including many factors beyond the company's control. In general,
estimates of Discovered and Undiscovered 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. 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. The risks and
uncertainties set forth above are not exhaustive. Readers should refer to
Oilsands Quest's current annual report on Form 10-KSB and other document
filings, which are available at www.sedar.com and at www.sec.gov for a
detailed discussion of these risks and uncertainties and details regarding the
location and extent of Oilsands Quest's land holdings.





For further information:

For further information: and retail investors, contact Hedlin Lauder
Investor Relations Ltd., Toll Free 1-800-299-7823, Office (403) 232-6251,
Email irinfo@hedlinlauder.com; Institutional investors, contact
BarnesMcInerney Inc., Toll Free 1-866-794-7288, Office (416) 371-0510, Email
oilsands@barnesmcinerney.com

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Oilsands Quest Inc.

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