In what was Saskatchewan’s first sale of oilsands leases in history, Oilsands Quest Inc. (BQI) expanded its land position in the province’s northwest by obtaining five exploration licenses for C$2.25-million. At $20 per acre, Blackmont Capital analyst Menno Hulshof said this price is “very low” by oilsands standards.
While little is known about the acreage, since no core holes have been drilled yet, he characterized the purchase “as an inexpensive call option on a land base that may ultimately prove to hold economic deposits of oil sands resource.”
Mr. Hulshof rates Oilsands a “speculative buy” with a US$5.25 price target. This represents upside of roughly 25% from Tuesday’s close of US$4.21.
BQI 1-yr chart: