Oilsands Quest Files Form 10-K Annual Report
CALGARY, July 6, 2011 /CNW/ --
NYSE Amex: BQI
CALGARY, July 6, 2011 /CNW/ - Oilsands Quest Inc. (NYSE Amex:BQI)
('Oilsands Quest', 'OQI' or 'the Company') announces that its Form 10-K
Annual Report for the year ended April 30, 2011, (the '2011 10-K') was
filed with the United States Securities and Exchange Commission on July
6, 2011, and is available online at www.sec.gov and www.sedar.com.
Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis presents Management's perspective
of our business, financial condition and overall performance for the
year ended April 30, 2011 as reported in the 2011 10-K. This
information is intended to provide investors with an understanding of
our past performance, current financial condition and outlook for the
future. Our discussion and analysis relates to the following topics:
— Overview of Business
— Overview of 2011 Results and Outlook
— Liquidity and Capital Resources
— Changes in Financial Condition and Results of Operations
— Share Capital
Overview of Business
We are a U.S. public company based in Calgary, Alberta engaged in the
exploration of oil sands permits and licences, located in Saskatchewan
and Alberta, and developing Saskatchewan's first commercial oil sands
discovery.
Oilsands Quest, together with its subsidiaries, is in the exploration
and development stage and does not currently have any income from
operating activities.
Overview of 2011 Results and Outlook
During the year ended April 30, 2011, the Company's activities included
an exploration drilling program of 9 holes on lands in the Wallace
Creek area, 16 core holes across Axe Lake reservoirs to improve the
understanding of the overburden characteristics, a 40 km 2-D seismic
program on the permits to the north and south of Axe Lake in
Saskatchewan and the advancement of its pre-commercialization
evaluation studies and reservoir test program on its Axe Lake
discovery. We also expanded our environmental program consisting of
monitoring and baseline assessment studies in anticipation of
comprehensive Environmental Impact Assessment reports as part of the
application for regulatory approval for development process in Alberta
and Saskatchewan.
During the year ended April 30, 2011, we raised $32.1 million, net of
issuance costs, through private placement share issuances, an equity
distribution agreement and proceeds of option exercises to fund these
activities and future programs.
Operations Summary:
Exploration Program
During the year ended April 30, 2011, we completed a five-well winter
drilling program as a follow up to our successful drilling program of
early 2010. The drilling focused on the western side of the Wallace
Creek permit, which is adjacent to Cenovus' Telephone Lake and Grizzly
Oil Sands' Firebag project areas.
Two of the wells drilled encountered significant quantities of bitumen
in the McMurray formation to support a 16 per cent increase in
contingent resource estimates. The previously-announced 11 well winter
drilling program at Wallace Creek was condensed to five wells primarily
due to the limited availability of drilling rigs.
We filed for and received approval for the third of three one-year
extensions of our Saskatchewan oil sands permits.
During the year we relinquished our two northernmost land permits in
Saskatchewan (permits PS000213 and PS000215) and on May 31, 2011, we
relinquished an additional three Saskatchewan permits, PS00205, PS00206
and PS00212 as we focus our exploration and development opportunities
to include only those lands that recent exploration activity has
demonstrated to be prospective. Relinquishing these permits does not
impact our resource estimates or development plans.
Axe Lake Area - Reservoir Development Activities
In July 2010, we drilled four wells to confirm the extent of the
reservoir at Axe Lake and to satisfy our permit retention work
obligations on the Saskatchewan permits. The objective of these wells
was to provide additional information on the geology in the area and
will not have a significant impact on our assessment of the resource in
the Axe Lake area.
During the year ended April 30, 2011 we completed testing of the steam
containment characteristics of the glacial till cap-rock layer that
lies above the Axe Lake reservoir. The laboratory tests indicate that
the glacial till cap likely will support the proposed SAGD pilot at Axe
Lake at chamber pressures of between 1,750 to 2,500 kPa. These tests
support our plan to use steam-assisted gravity drainage (SAGD), a
proven oil sands recovery process, in spite of the different cap-rock
characteristics at Axe Lake compared with similar projects further
west.
We continued to process and interpret the 1,847 kilometres (1,149 miles)
of 2-D and 3-D seismic data that we have at Axe Lake in order to
correlate this information with the results of the overburden drilling
program and the summer 2010 drilling program at Axe Lake. This
interpretation of the seismic data and the correlation of the well
information will be used to assist in the placement of the well pads
for commercial development as well as mapping the glacial till
overburden.
We filed a proposal to the Saskatchewan Ministry of Environment (SME)
for approval to produce up to 30,000 barrels per day of bitumen using
SAGD. Filing with the SME is the first step in a two-stage process to
apply for approval of a commercial lease for oil sands development.
This proposal provides the complete vision for the project, giving the
regulator helpful context when approving testing activity and giving
all stakeholders clarity around the long-term development plans. The
second stage of the process consists of an application for commercial
project approval to SMER that will be submitted following the
successful completion of the SAGD pilot.
The proposed project includes components typical of SAGD operations such
as multi-well production pads of horizontal well pairs, and a central
processing and bitumen treatment facility that includes produced fluid
separation, water recycling, steam generation and tank storage
facilities. Options for site access, utility service corridors, bitumen
transportation, electricity and natural gas supplies are also being
evaluated.
The proposed pilot will consist of one 100 meter long horizontal well
pair, with the upper well placed five meters below the glacial till
cap, or overburden, and is designed to make use of the existing surface
facilities. The SAGD pilot will demonstrate the steam containment
properties of the glacial till cap and provide information essential
for the front-end engineering design for the commercial development.
Further activity on the pilot project has been suspended pending the
necessary financing.
Abandonment and Reclamation Costs
We are responsible for compliance with terms and conditions of
environmental and regulatory approvals and all laws and regulations
regarding the abandonment of a project and reclamation of its lands at
the end of its economic life, which abandonment and reclamation costs
may be substantial. A breach of such legislation and/or regulations may
result in the issuance of remedial orders, the suspension of approvals,
or the imposition of fines and penalties, including an order for
cessation of operations at the site until satisfactory remedies are
made. As at April 30, 2011, we estimate the total undiscounted
inflation-adjusted amount required to settle the asset retirement
obligations in respect of the Company's wells and facilities is
approximately $44.3 million. This estimate includes the cost to
re-abandon a number of wells at Axe Lake from the Company's early
exploration core hole programs. During a review of our development
plans and well licenses, we determined that a number of these core
holes were not abandoned to meet our thermal development requirements
or in accordance with regulatory requirements. We are also evaluating
the core holes that are located outside the potential commercial
development area and have included a portion of these costs in the
re-abandonment liability based on performing the obligation over a 5
year period. The abandonment and reclamation estimate also includes the
costs to reclaim the air strip, camp site, access roads and reservoir
test sites which are being brought into income over a period of 1 to 30
years. The initial measurement of an asset retirement obligation is
recorded as a liability at its fair value, with an offsetting asset
retirement cost recorded as an increase to property and equipment or
exploration expense.
Currently, the Company is working with the regulators to assess an issue
relating to the re-abandonment of early exploration core holes. It is
possible that the outcome of such assessment could result in
cancellation of the permits if the Company does not comply with the
governing regulations. Further, if the Company cannot remediate these
core holes to industry standards, our ability to commercially develop
the Axe Lake reservoir may be limited.
Outlook
Our reservoir development and exploration activities over the next few
months will be focused on preparing to execute the SAGD pilot at Axe
Lake, designing and executing a seismic program at Wallace Creek and
working with SMER to convert our Axe Lake permits to a long-term lease.
All of these plans are subject to our receipt of the necessary
financing. See 'Risks Related to Our Business - Due to our history of
operating losses, we are uncertain that we will be able to maintain
sufficient cash to accomplish our business objectives'.
At Axe Lake, we are seeking to retain portions of PS00208 and PS00210
and convert them to leases. The permits are currently held under the
Oil Shale Regulations, 1964. We have applied to SMER to convert these
permits to licenses and then to leases under the terms of the Petroleum
and Natural Gas Regulations, 1969. The outcome of these discussions is
not certain.
We expect to relinquish the balance of our Axe Lake lands in
Saskatchewan as we do not believe that the licenses to the south of the
Axe Lake permits are prospective, either due to the presence of
interbedded water in the reservoirs that would not allow for commercial
development or lack of bitumen in the reservoirs in the licenses in the
southern portion of our Saskatchewan lands. We expect to relinquish
these licenses in August 2011.
Based on the drilling results at Wallace Creek and our knowledge of the
regional geology, we believe there is good potential for that project
area to support a commercial SAGD project. Further seismic work or
delineation drilling is required to confirm this potential and retain
certain portions of these permits.
After analysis of available drilling and seismic data, we have concluded
that the lands in the south part of Raven Ridge on Permit No.
7006080098 are not prospective and we expect to relinquish this permit
in August 2011. Relinquishing these lands will have no impact on the
Company's current resource estimates or development plans.
The Company may offer and sell shares of common stock by way of
'at-the-market' distributions on NYSE Amex, until January 18, 2012.
Funds raised from the ATM program will be used for general corporate
purposes. In addition, the Company intends to conduct a Rights Offering
described above under the 'Corporate' section.
There can be no assurance that the Rights Offering will result in the
Company raising sufficient funds to carry out the exploration and
development plans described above.
Liquidity and Capital Resources
At April 30, 2011, the Company held cash and cash equivalents totaling
$16.0 million (April 30, 2010 - $18.6 million).
On May 10, 2010, the Company issued 10.5 million flow-through shares at
$1.00 CDN ($0.995 USD) and 9.2 million common shares at $0.85 USD per
share for gross proceeds of $18.6 million CDN ($18.1 million USD)
pursuant to a non-brokered private placement.
On November 5, 2010, the Company completed a public offering of 20.8
million common shares at a price of $0.45 USD per share and 7.1 million
flow-through shares at a price of $0.51 CDN ($0.50 USD) per share for
total gross proceeds of approximately $13.4 million CDN ($12.9 million
USD).
As of January 17, 2011, the Company entered into an equity distribution
agreement ('Agreement') with Knight Capital Americas, L.P. ('KCA'), a
subsidiary of Knight Capital Group, Inc. Under the terms of the
Agreement, the Company may offer and sell shares of common stock by way
of 'at-the-market' (ATM) distributions on NYSE Amex, up to a maximum of
US$20 million over a period of 12 months, through KCA as sales agent.
The shares are distributed at market prices prevailing at the time of
each sale and the timing, price and number of shares sold are at our
discretion. The number of shares sold on any given day is expected to
be relatively small compared to the total volume of shares traded. As
of April 30, 2011, 5,537,137 shares have been distributed under this
arrangement for gross proceeds of $3.1 million. Funds raised from the
ATM program are used to finance general corporate purposes.
During the year ended April 30, 2011, the Company expended $30.4 million
on operating activities and $3.0 million on property and equipment.
Management anticipates that the Company will be able to fund its
activities at a reduced level through January 2012 with its cash and
cash equivalents as at April 30, 2011. Accordingly, there is
substantial doubt about our ability to continue as a going concern and
without additional funding, we may not be able to maintain operations
beyond that date. Additional financing will also be required if our
activities are changed in scope or if actual costs differ from
estimates of current plans. To fund future operations, we intend to
conduct a Rights Offering under which the shareholders would be given
the right to purchase additional shares in the Company based on their
pro-rata share ownership. The proceeds from a Rights Offering will be
used to continue with the delineation and development of the assets (as
described more fully in the Outlook section), and for general corporate
purposes. Our development strategy will also consider other sources of
financing, asset sales or seeking partners on a joint venture basis on
our specific projects to fund the development of such projects in a
timely and responsible manner.
There can be no assurance that a Rights Offering will result in the
Company raising sufficient funds to carry out its exploration and
development plans. There is also no assurance that debt or equity
financing or joint venture partner arrangements will be available to us
on acceptable terms, if at all, to meet these requirements. The Company
has no revenues, and its operating results, profitability and the
future rate of growth depend solely on management's ability to
successfully implement the business plans and on the ability to raise
additional capital.
Changes in Financial Condition and Results of Operations
During the year ended April 30, 2011, the primary focus of the Company
was the undertaking of an exploration drilling program in the Wallace
Creek area and Axe Lake reservoir to improve the understanding of the
overburden characterization, the advancement of pre-commercialization
evaluation studies and reservoir test program at Axe Lake and the
evaluation of strategic alternatives for enhancing shareholder value.
During the year ended April 30, 2010, the primary focus of the Company
was on the commissioning of the facilities at Test Site 1, the
implementation of an overburden characterization study to test the
potential for the overburden to act as a cap rock for steam containment
capacity within the reservoir and the filing of key regulatory
submissions to advance the development of its Axe Lake oil sands
project.
During the year ended April 30, 2009, the primary focus of the Company
was on the engineering and construction of the testing facilities at
Test Sites 1 and 3, the continued delineation of the Axe Lake and Raven
Ridge discoveries and completing the acquisition of all the remaining
rights of the external joint venture partners to the Triple 7 Joint
Venture Agreement.
Net loss
Year ended April 30, 2011 as compared to year ended April 30, 2010. The
Company experienced a net loss of $316.2 million or $0.91 per share for
the year ended April 30, 2011 as compared to a net loss of $64.5
million or $0.21 per share for the year ended April 30, 2010. The
increase in the net loss in the current period as compared to the prior
period is primarily due to the recording of a valuation allowance for
impairment on the Company's undeveloped properties for $339.2 million
and partially offset by a reduction in exploration activity, a
reduction in stock-based compensation expense and decreased corporate
expenses resulting from downsizing activities. The net loss was also
increased by higher depreciation and accretion charge due to the
recognition of a re-abandonment obligation on April 30, 2010, a
reduction in the deferred income tax benefit and foreign exchange gain.
Year ended April 30, 2010 as compared to year ended April 30, 2009. The
Company experienced a net loss of $64.5 million or $0.21 per share for
the year ended April 30, 2010 as compared to a net loss of $89.1
million or $0.34 per share for the year ended April 30, 2009. The
decline in the net loss in the current year as compared to the prior
year is due to the reduction in exploration activity, a reduction in
stock-based compensation expense and a foreign exchange gain resulting
from holding Canadian funds with an appreciation of the Canadian dollar
versus the U.S. dollar which were offset by increased asset retirement
obligations due to the re-abandonment liability identified during the
current year. The Company expects to continue to incur operating losses
and will continue to be dependent on additional equity or debt sales
and/or property joint ventures to fund its activities in the future.
Exploration costs
Year ended April 30, 2011 as compared to year ended April 30, 2010.
Exploration costs for the year ended April 30, 2011 were $21.9 million
(2010 — $50.2 million). Exploration costs in the current year relate to
exploration drilling at Wallace Creek and Axe Lake, a seismic program
at Axe Lake and additional environmental work and pre-commercialization
evaluation studies to advance the reservoir test program at Axe Lake.
Exploration costs also include $10.2 million of cost revisions related
to asset retirement obligations of which the majority relates to the
re-abandonment of a certain number of core holes at Axe Lake. The
Operations Summary above provides a summary of the exploration
activities conducted in the year ended April 30, 2011.
Year ended April 30, 2010 as compared to year ended April 30, 2009.
Exploration costs for the year ended April 30, 2010 were $50.2 million
(2009 — $72.0 million). Exploration costs in the current year relate to
drilling, seismic, environmental, engineering and construction costs
associated with Test Sites 1 and 3 on our Saskatchewan and Alberta
permits. Exploration costs also include $13.8 million of additional
asset retirement obligations identified during the current year in
relation to the re-abandonment of a certain number of core holes at Axe
Lake. The Operations Summary above provides a summary of the
exploration activities conducted in the year ended April 30, 2010.
General and administrative
Corporate
Year ended April 30, 2011 as compared to year ended April 30, 2010.
General and administrative expenses settled with cash for the year
ended April 30, 2011 were $17.3 million (2010 — $17.0 million).
Expenditures for the year ended April 30, 2011 consist of salaries
($8.3 million), legal and other professional fees ($4.7 million) and
general office costs ($4.3 million). Expenditures for the year ended
April 30, 2010 consist of salaries ($9.4 million), legal and other
professional fees ($2.6 million) and general office costs ($5.0
million). The decrease in salaries and wages is due to a reduction in
salary expenses resulting from downsizing activities partially offset
by the recognition of costs for employee benefit arrangements related
to a termination plan in connection with the review of strategic
alternatives. The increase in professional fees during the year is
related to additional costs incurred as part of the strategic
alternatives review process. The decrease in general office costs
during the year ended April 30, 2011 is mainly caused by downsizing
activities. At April 30, 2011, there were 17 employees compared to 46
employees at April 30, 2010.
Year ended April 30, 2010 as compared to year ended April 30, 2009.
General and administrative expenses settled with cash for the year
ended April 30, 2010 were $17.0 million (2009 — $12.6 million). General
and administrative expenses in the year ended April 30, 2010 consist of
salaries ($9.4 million), legal and other professional fees ($2.6
million) and general office costs ($5.0 million). General and
administrative expenses in the year ended April 30, 2009 consist of
salaries ($5.7 million), legal and other professional fees ($2.7
million) and general office costs ($4.2 million). Increases in costs in
year ended April 30, 2010 as compared to the prior year are mainly
associated with severance payments.
Stock-based compensation
Year ended April 30, 2011 as compared to year ended April 30, 2010.
Stock-based compensation expense for the year ended April 30, 2011 was
$1.3 million (2010 - $5.6 million) and consists of stock-based
compensation related to the issuance of options to directors, officers
and employees. The decrease during the year ended April 30, 2011 is due
to fewer options remaining to vest including options forfeited caused
by a reduction in the number of employees. A total of 6.0 million
options were forfeited during the year ended April 30, 2011. As at
April 30, 2011, the Company has unrecognized stock-based compensation
costs of $0.4 million related to unvested options which will be
recognized in future periods as the options vest. The average fair
value of the stock options using either the Black-Scholes valuation
model or the trinomial valuation model that were issued during the year
ended April 30, 2011 was $0.51 (2010 - $0.43)
Year ended April 30, 2010 as compared to year ended April 30, 2009.
Stock-based compensation for the year ended April 30, 2010 was $5.6
million (2009 — $17.5 million). Stock-based compensation expense for
the year ended April 30, 2010 consists of stock-based compensation
related to the issuance of options to directors, officers and
employees. The decrease during the year ended April 30, 2010 compared
to the prior year is the result of 6.9 million options forfeited due to
a reduction in the number of employees that was greater than the
anticipated forfeiture rate. As at April 30, 2010, the Company has
unrecognized stock-based compensation costs of $1.7 million related to
unvested options which will be recognized in future periods as the
options vest. The average fair value of the stock options using either
the Black-Scholes valuation model or the trinomial valuation model that
were issued during the year ended April 30, 2010 was $0.43 (2009 -
$1.93).
Foreign exchange loss (gain)
Year ended April 30, 2011 as compared to year ended April 30, 2010.
Foreign exchange loss of $0.4 million (2010 — gain of $5.1 million)
resulted from holding less Canadian funds in the parent company during
the current year compared to the same period last year with increased
volatility of the Canadian dollar against the U.S. dollar.
Year ended April 30, 2010 as compared to year ended April 30, 2009.
Foreign exchange gain of $5.1 million (2009 — loss of $4.8 million)
resulted primarily from holding Canadian dollar cash and cash
equivalents funds in the parent company with a US dollar functional
currency when the value of the Canadian dollar increased compared to
the U.S. dollar.
Depreciation and accretion
Year ended April 30, 2011 as compared to year ended April 30, 2010.
Depreciation and accretion expense of $4.5 million (2010 — $2.5
million) relates to camp facilities, equipment and corporate assets
which are being depreciated over their useful lives of 3 to 5 years.
Accretion expense relates to the asset retirement obligation recognized
on the re-abandonment of a certain number of core holes at Axe Lake and
on the airstrip, camp site, access roads, and reservoir test sites
which are being brought into income over a period of 1 to 30 years. The
increase during the year ended April 30, 2011 is mainly due to the
additional accretion on asset retirement obligation resulting from the
re-abandonment of a certain number of wells at Axe Lake that was
identified in the previous fiscal year.
Year ended April 30, 2010 as compared to year ended April 30, 2009.
Depreciation and accretion expense of $2.5 million (2009 — $1.6
million) relates to camp facilities, equipment and corporate assets
which are being depreciated over their useful lives of 3 to 5 years.
Accretion expense relates to the asset retirement obligation recognized
on the airstrip, camp site, access road, and the reservoir test sites
which are being brought into income over a period of 1 to 30 years. The
change from the year ended April 30 2009 to the year ended April 30,
2010 relates to the increase in assets held during the period.
Additions to the property and equipment for the year ended April 30,
2010 totaled $1.8 million.
Impairment of property and equipment
Year ended April 30, 2011 as compared to year ended April 30, 2010. The
impairment of $340.3 million (2010- $6.4 million) is comprised of a
$296.2 million impairment on the Saskatchewan Oil Sands permits for Axe
Lake, a $27.2 million impairment and an $8.4 million impairment on the
Alberta Oil Sands permits at Raven Ridge and leases at Eagles Nest
which were recorded during the three months ended April 30, 2011. We
did not receive any firm proposals during the formal phase of the
strategic alternative review process indicating impairment in the value
of these properties at April 30, 2011. We estimated the fair value of
each property by obtaining, when available, information about recent
market transactions and calculating the property's risk adjusted net
present value. The Company determined that the carrying value of these
properties exceeded their fair value and recorded a valuation
allowance. The impairment provision also includes a $2.5 million loss
on the Saskatchewan Oil Sands licenses at Axe Lake due to their low
prospectivity and their expected relinquishment on August 12, 2011 and
a $4.9 million provision on the Pasquia Hills property. Since the
Company has no plan to explore and develop the Pasquia Hills property
considering the considerable time, effort and resources required, a
full impairment of the oil shale property was recognized and the
remaining carrying value was written down to zero during the current
fiscal year. Impairment is also comprised of a provision of $1.1
million on leasehold improvements and office equipment related to our
Calgary office following an assessment of their carrying value which
was deemed to be not recoverable at April 30, 2011.
Year ended April 30, 2010 as compared to year ended April 30, 2009. The
impairment of $6.4 million (2010- $nil) related to the Pasquia Hills
property after considering the expected proceeds from their disposal
following the announcement of the sale of the oil shale assets in
January 2010.
Interest income
Year ended April 30, 2011 as compared to year ended April 30, 2010.
Interest income for the year ended April 30, 2011 amounted to $0.1
million (2010 — $0.1 million). Interest income is earned because the
Company pre-funds its activities and the resulting cash and cash
equivalents on hand are invested in high interest savings accounts.
Interest income during the current fiscal year is comparable to the
previous year reflecting the decrease in cash and cash equivalents
offset by an increase in market rates over the intervening period.
Year ended April 30, 2010 as compared to year ended April 30, 2009.
Interest income for the year ended April 30, 2010 amounted to $0.1
million (2009 — $1.1 million). The decrease in interest income for the
year ended April 30, 2010 as compared to the prior year reflects the
decrease in short term investments and the decrease in market interest
rates over the intervening year.
Income tax benefit
Year ended April 30, 2011 as compared to year ended April 30, 2010. The
deferred income tax benefit for year ended April 30, 2011 was $69.2
million (2010 — $12.0 million). The increase in the deferred tax
benefit for the year ended April 30, 2011 compared to the prior year is
mainly due to the tax benefit associated with the impairment on
undeveloped properties amounting to $65.9 million. The deferred tax
benefit otherwise reported is reduced by the impact of renouncing $14.2
million of flow-through expenditures corresponding to a reduction of
$1.9 million in tax benefit, and the recording of $4.6 million of asset
retirement liabilities settled during the year which resulted in the
reversal of $1.2 million of tax benefits previously recognized on asset
retirement obligations. This decrease in the deferred tax benefit is
partially offset by $2.6 million of tax benefits related to $10.2
million of additional asset retirement obligations that were recorded
during the year.
Year ended April 30, 2010 as compared to year ended April 30, 2009. The
deferred income tax benefit for year ended April 30, 2010 was $12.0
million (2009 — $18.2 million). The decrease in the deferred tax
benefit for the year ended April 30, 2010 compared to the prior year is
mainly due to a reduction in exploration costs incurred. The deferred
tax benefit otherwise reported is reduced by the impact of flow through
expenditures. The net impact for the year ended April 30, 2010 was a
reduction of the deferred tax benefit in the amount of $3.5 million
(2009 — $4.7 million).
Share Capital
At June 30, 2011, the Company had 348,495,556 shares of common stock
issued and outstanding and 21,765,744 options to acquire shares of
common stock. The options have a weighted average exercise price of
$2.85 per share.
At June 30, 2011, OQI's diluted shares of common stock outstanding was
348,495,556 shares issued and outstanding plus 21,765,744 options, plus
Exchangeable Shares and options to acquire exchangeable shares which
can be exchanged into 19,540,736 shares, plus 1,388,567 shares reserved
for settlement with creditors of a former subsidiary.
An Exchangeable Share provides the holder with economic terms and voting
rights which are, as nearly as practicable, equivalent to those of a
share of OQI common stock. The Exchangeable Shares are represented for
voting purposes in the aggregate by one Preferred Share. The one
Preferred Share represents a number of votes equal to the total
outstanding Exchangeable Shares on the applicable record date for the
vote submitted to OQI shareholders.
Cautionary statement about forward-looking statements
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 our management expects,
believes or anticipates will or may occur in the future are
forward-looking statements. Such forward-looking statements include
discussion of such matters as:
-- the amount and nature of future capital, development and
exploration expenditures;
-- the timing of exploration and development activities;
-- potential reservoir recovery optimization processes; and
-- business strategies and development of our business plan and
drilling programs.
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 such as references to Oilsands
Quest's drilling program, geophysical programs, reservoir field testing
and analysis program, preliminary engineering and economic assessment
program for a first commercial project, and the 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, land tenure risks, lack of infrastructure in the region
in which the company's resources are located and risks associated with
the company's ability to implement its business plan. 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.
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Investor Relations
Email: ir@oilsandsquest.com
Investor Line: 1-877-718-8941