On Thursday, Canada.com posted a vague article that talked about CPC Corp's (one of Taiwan's largest state-owned petroleum refiners) interest in collaborating with Saskatchewan's Indian Oilsands Corp. in an oil sands joint venture. On Saturday, some more light was shed on the details.

CPC Corp. is planning to spend $800 million dollars over the next five years to acquire and explore potential oil sands leases in Saskatchewan. According to Ken Thomas (a Saskatoon-based economic development expert who has business connections in Taiwan and who connected CPC with Indian Oilsands Corp), there have been numerous discussions with the Saskatchewan government regarding an oil sands project for the CPC / Indian Oilsands joint venture. In August, the joint venture plans to aggressively buy Saskatchewan oil sands acreage.

On Friday, after trading down after lunch time (eastern time), Oilsands Quest (BQI) rallied from being down $0.12 to ending the day up $0.39, or by 6.7%.

After the close, it became apparent why. Clearly, someone got word that Jim Cramer would be talking about the stock in his segment. Jim Cramer mentioned BQI very favorably in a 6 ½ minute segment of his “Speculation Friday” show. In the segment, he mentioned that BQI could be a takeout target and could be worth about $16 dollars per share. He also said that, even if you discount the stock by 50%, he said it should be worth $8.34 per share. I would think that BQI could open up strong on Monday on the endorsement by Cramer.

Recent Happenings

Last week, there was some unusual trading activity in Oilsands Quest Inc. (BQI) and BQI call options, which leads me to believe that something is brewing at BQI. First, on Thursday, the volume and open interest on the BQI Oct $7.50 calls increased significantly, as referenced in the Seeking Alpha article titled "Thursday Options Outlook: XLF, LEH, BUD, CMI, TXN, CHK, KEY, FTO, BQI". Currently, the open interest on those options stands at 10,169 contracts, up significantly from less than 2,000 contracts only a few days ago.

On May 5th, Oilsands Quest (BQI) put out a press release detailing 6 new names for various parts of its acreage. Prior to the press release, the company primarily spoke only about its focus, in-situ oil sands project, Axe Lake, which resides on its Saskatchewan acreage. But now, the company has 6 new names, three of which further break down its Axe Lake project (Axe Lake 1, Axe Lake 2 and Axe Lake 3) and three names that refer to different areas of its Alberta acreage (Raven's Ridge 1, Raven's Ridge 2 and Wallace Creek).

On the surface, some may argue that the press release may not seem like a big event. However, I beg to differ. After more than 2 years of exploration and delineation drilling work, Oilsands Quest is on the cusp of securing its first joint venture partner on its Axe Lake project. The signing of a JV partner is a significant event in that a successful partnering would validate BQI's business model (which, in a nutshell, is to explore, delineate and partner various parts of its massive 753,000 acres of oil sands-bearing land). Perhaps more importantly, it would validate the attractiveness of BQI's oil sands acreage, which straddles the Alberta/Saskatchewan border.

After my last article was published on July 25th, Oilsands Quest (BQI) shares appreciated by 36% to its 52-week high of $5.13 before declining by 16% back to the current price of $4.32. Interestingly enough, the stock has given back some of its gains ahead of a plethora of catalysts that should emerge over the next 12 to 18 months (including 3 that will likely materialize over the next 12 weeks or so). Importantly, there is one catalyst, the company's Norwest update, that should give rise to a number of other catalysts, all of which, combined, could move BQI shares materially in the upcoming months. So here they are:

Sidebar: For those of you who aren't familiar with Oilsands Quest, it is an oilsands exploration company with over 707,000 acres of oilsands land (mostly in Saskatchewan) and the largest contiguous oilsands acreage position. It is essentially the only oilsands play in Saskatchewan. The geographic characteristics of its first oilsands project are equally or more attractive than Encana's Borealis, Christina Lake and Foster Creek projects as well as Suncor's Firebag project. It is headed up by Chris Hopkins, who has a demonstrated track record of successfully establishing another oilsands company (Synenco).

Undoubtedly, some of the investors shorting the stock were betting against the prospects of a bullish management update of the company's resource estimate and resource commerciality in July (when the company was widely expected to provide the update).

In particular, Bears on BQI were betting that the lack of shale cap rock on its acreage would preclude its bitumen resources from being recovered via in-situ processes since there wouldn’t be a barrier to contain the high pressure steam from some in-situ recovery processes.