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Oilsands Quest stock was trading up more than 60% at the close on Friday on more than 10-times usual volumes after the company announced it has received approval from the Government of Saskatchewan to convert portions of permits for its flagship project at Axe Lake to 15-year leases, the first oil sands leases in Saskatchewan.
The stock was clobbered earlier this week after the company said it will ask for more cash from investors because its almost one-year long global quest to find a heavyweight partner had come up empty handed.
In late afternoon trade Oilsands Quest changed hands at 32.6c on the NYSE Amex, up 61.53% from Thursday’s close, with almost 18m shares traded compared to usual volumes 1.6m. It was still trading below its closing price last Friday.
The planned rights offering announced last week will be used amongst others to advance the Axe Lake project in order to demonstrate that the Axe Lake reservoir can be produced using proven steam-assisted gravity drainage (SAGD) technology.
“These leases mark a key milestone in our path forward,” said Garth Wong, Chief Executive Officer of Oilsands Quest. “In the past, some potential investors have expressed concern about the short term permits under which the Axe Lake lands were held. The 15-year leases will give us the certainty of land tenure we need to underpin commercial development at Axe Lake.
The Government of Saskatchewan has demonstrated its commitment to oil sands exploration and development, and we appreciate its confidence that Oilsands Quest will be able to deliver on the value of these assets both for our investors and for the people of Saskatchewan.”
The two leases, OSA00001 and 0SA00002 will be governed under the terms of the Petroleum and Natural Gas Regulations, 1969 and will expire on March 31, 2027. Click here a map of the leases.
Comments
Sashahodder1
Who are these leases to?