QUEST Petroleum NL announced it is joint venturing to farm-in to 33,302 hectares of Cold Lake oil sands in Alberta, Canada.

Previous drilling and extensive log analysis verified the existence of oil, with targets including crude oil in shallow horizons with an average depth of 600 metres.

A binding terms sheet between Quest, First Nations Exploration Company and Keyano Pimee Exploration Company outlines the phases of the farm-in, including the further joint acquisition of opportunities in the defined area of mutual interest.

As part of phase one, Quest will fund four low cost vertical well re-entries to earn a 50 per cent interest in the re-entry wells and four corresponding 259 hectare sections of land.

Quest will hold 518 net hectares of the project lands along with interests in four wells and associated production in the first phase.

Phase two outlines Quest to fund the drilling of 13 conventional shallow vertical wells to earn a 50% interest in those wells and 13 corresponding 259 hectare sections of land.

A total of 2,201 hectares of the project land and interest in 17 cumulative wells and associated production will be held by Quest at the end of the second phase.

KPECL and Quest will fund a multi horizontal well production and development programme over the entire project area in a joint venture as part of phase three outlined in the binding terms sheet.

Quest will earn a 50% interest in each well and associated sections of land.

By production, Quest will hold a maximum position of about 16,592 hectares of the project area.

The Cold Lake region contributes an estimated 500,000 barrels of oil per day, which is predicted to rise to 650,000 barrels per day by 2017, the region is one of three major oil sands deposits in Alberta.