Oilsands Quest to sell Wallace Creek, focus on developing Axe Lake


Summary

CALGARY – Junior oil company Oilsands Quest Inc. (NYSE:BQI) has agreed to sell its Wallace Creek property in Alberta for up to $60 million to an unnamed buyer. 

Calgary-based Oilsands Quest said it will be paid $40 million cash at closing and an addition $20 million, “subject to certain future events,” which the company did not outline. 

Proceeds of the sale will be used to develop its Axe Lake property in Saskatchewan toward commercial development. 

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HangZhou Night Net

“It will provide us much of the capital we need to complete the Axe Lake pilot and prove the commercial recoverability of our highest priority core asset,” CEO Garth Wong said in a statement. 

“While Wallace Creek has shown considerable potential, it is not yet as well delineated as Axe Lake and is therefore considerably further away from commercial development.” 

The company expects the sale agreement of its Wallace Creek property to be concluded by the end of October with the final transaction of the sale completed by the end of the year. 

This past July, the company received approval from the provincial government to convert portions of its Axe Lake permits to 15-year leases, the first oil sands leases in Saskatchewan. 

Oilsands Quest says those leases are one of the key elements it needs to proceed with the development of a commercial oil sands production facility. 

Last year, Oilsands Quest filed an application to the Saskatchewan government to start a pilot project at Axe Lake that would become the first stage of a 30-thousand barrel-per-day commercial oil sands development. 

Those plans were put on hold late in 2010 while the company searched for a partner or other strategic alternative to assist with the capital expenditures to build the facility. 

Axe Lake is located north of Clearwater River Provincial Park along the Alberta border and is the first major oil sands exploration in Saskatchewan. 

With files from The Canadian Press 


CALGARY – Junior oil company Oilsands Quest Inc. (NYSE:BQI) has agreed to sell its Wallace Creek property in Alberta for up to $60 million to an unnamed buyer. 

Calgary-based Oilsands Quest said it will be paid $40 million cash at closing and an addition $20 million, “subject to certain future events,” which the company did not outline. 

Proceeds of the sale will be used to develop its Axe Lake property in Saskatchewan toward commercial development. 

Story continues below

HangZhou Night Net

“It will provide us much of the capital we need to complete the Axe Lake pilot and prove the commercial recoverability of our highest priority core asset,” CEO Garth Wong said in a statement. 

“While Wallace Creek has shown considerable potential, it is not yet as well delineated as Axe Lake and is therefore considerably further away from commercial development.” 

The company expects the sale agreement of its Wallace Creek property to be concluded by the end of October with the final transaction of the sale completed by the end of the year. 

This past July, the company received approval from the provincial government to convert portions of its Axe Lake permits to 15-year leases, the first oil sands leases in Saskatchewan. 

Oilsands Quest says those leases are one of the key elements it needs to proceed with the development of a commercial oil sands production facility. 

Last year, Oilsands Quest filed an application to the Saskatchewan government to start a pilot project at Axe Lake that would become the first stage of a 30-thousand barrel-per-day commercial oil sands development. 

Those plans were put on hold late in 2010 while the company searched for a partner or other strategic alternative to assist with the capital expenditures to build the facility. 

Axe Lake is located north of Clearwater River Provincial Park along the Alberta border and is the first major oil sands exploration in Saskatchewan. 

With files from The Canadian Press