NYSE Amex: BQI
CALGARY, Nov. 29, 2011 /CNW/ - Oilsands Quest Inc. (NYSE Amex: BQI)
("Oilsands Quest," "OQI" or "the Company") has requested and obtained
an Order from the Alberta Court of Queen's Bench (the "Court")
providing creditor protection under the Companies' Creditors
Arrangement Act (Canada) ("CCAA"). While under CCAA protection, the
Company will continue with its day to day operations.
On November 28, 2011, the third party that had signed a Letter of Intent
to purchase the Company's Wallace Creek asset notified Oilsands Quest
that they could not meet the terms of that Letter of Intent.
Negotiations on the proposed Wallace Creek sale have ended, and the
Board of Directors of Oilsands Quest has therefore decided to seek CCAA
protection after considering all available alternatives. The Company
has been hindered in recent months by market and financial challenges,
details of which will soon be available on the website www.ey.com/ca/oilsandsquest. CCAA protection stays creditors and others from enforcing rights
against the Company and affords Oilsands Quest the opportunity to
restructure its financial affairs. The Court has granted CCAA
protection until December 21, 2011, to be further extended as required
and approved by the Court.
"We made the difficult decision to seek creditor protection because we
believe this step to be in the best interest of all our stakeholders,"
said Garth Wong, Oilsands Quest Chief Executive Officer. "We have been
actively seeking options to manage our liquidity and to raise the
capital we need to proceed with developing our assets. To protect those
assets and find a solution that will enable them to be developed, we
are seeking options to restructure our affairs up to and including the
sale of the company."
While under CCAA protection, the Board of Directors maintains its usual
role and management of the Company remains responsible for the day to
day operations, under the supervision of a Court-appointed monitor,
Ernst & Young Inc., who will be responsible for reviewing Oilsands
Quest's ongoing operations, assisting with the development and filing
of a Plan of Arrangement ("Plan") that is established by management,
liaising with creditors and other stakeholders and reporting to the
Court. The Board of Directors and management will be primarily
responsible for determining whether a Plan for restructuring the
Company's affairs is feasible. Affected stakeholders will have an
opportunity to vote on the Plan. Before the Plan is implemented it must
be approved by the requisite number and value of affected stakeholders
contemplated by law and approved by the Court.
CCAA protection enables the Company to continue with its day to day
operations until the CCAA status changes. The implications of this
process for Oilsands Quest shareholders will not be known until the end
of the restructuring process. If the affected stakeholders do not
approve a Plan in the manner contemplated by law, Oilsands Quest will
likely be placed into receivership or bankruptcy. If by December 21,
2011, Oilsands Quest has not filed a Plan or obtained an extension of
the CCAA protection, creditors and others will no longer be stayed from
enforcing their rights. Oilsands Quest will issue a further press
release on or before December 21, 2011 to provide an update.
The NYSE Amex ("NYSE") has halted trading in the common shares of the
Company (symbol: BQI). The NYSE may proceed to delist the company for
failure to meet the continued listing requirements of the NYSE as a
result of the Company proceeding under the CCAA. BQI's common shares
will remain suspended from trading until a delisting occurs, or until
the NYSE permits the resumption of trading.
"We remain confident that our in situ oil sands assets will some day be
developed into commercial facilities," Mr. Wong concluded. "Oil sands
development is a long-term, capital-intensive business. The timing for
our planned pilot project unfortunately coincided with a downturn in
the capital markets that has impacted our ability to access capital or
to identify strategic alternatives to enable us to proceed. We hope
that through this process, we will be able to arrive at a satisfactory
solution for all our stakeholders, including our shareholders."
About Oilsands Quest
Oilsands Quest Inc. (www.oilsandsquest.com) is exploring and developing
oil sands permits and licences, located in Saskatchewan and Alberta,
and developing Saskatchewan's first commercial oil sands discovery.
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 management expects, believes or
anticipates will or may occur in the future are forward-looking
Forward-looking statements are statements other than relating to
historical fact and are 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 are based on the opinions and
estimates of management 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 the ability to raise additional capital, risks
associated with the Company's ability to implement its business plan,
its ability to successfully submit a timely plan to its creditors and
the court under the CCAA and to resolve its operational, legal and
financial difficulties, the possible delisting of its securities from
NYSE Amex, risks inherent in the oil sands industry, regulatory and
economic risks, land tenure risks and those factors listed under the
caption "Risk Factors" in the Company's Form 10-Q filed with the
Securities and Exchange Commission on September 14, 2011. The Company
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.
SOURCE Oilsands Quest Inc.
For further information:
Investor Line: 1-877-718-8941