NYSE Amex: BQI
CALGARY,
Nov. 29, 2011 /PRNewswire/ - 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.
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 management expects,
believes or anticipates will or may occur in the future are
forward-looking statements.
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.