The company said the estimate is based solely on the drilled area of the discovery acreage, which covers about 36 sections of the company"s wholly owned PS00208 and PS00210 permits. The discovery area is about 50 km east of Suncor Energy Inc."s Firebag operations.

Oilsands previously had reported an internal estimate of the Axe Lake area"s total bitumen resource potential as 2.1-2.8 billion bbl, plus another 3 million for selected areas south and northeast of the discovery area (OGJ, Sept. 10, 2007, p. 32).

Oilsands Quest, in preparation for an intensive 2007-08 winter drilling program, is conducting delineation drilling at Axe Lake 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, and at the peak of drilling this winter, the company expects to have a total of eight drilling rigs on its lands conducting a balanced program of exploration and delineation drilling.

The company is currently carrying out 2D and 3D seismic data operations on its Saskatchewan permits and its adjacent Alberta permits. Oilsands estimates an additional 4.5 billion bbl of resource potential for the permits in Alberta.

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

PIN/OGJ.COM