Mikaila Adams
OGFJ Associate Editor

Oilsands Quest Inc. (NYSE Amex: BQI) has cancelled the sale of its oil shale assets located near Pasquia Hills, Saskatchewan to Canshale Corp. Canshale was unable to raise a minimum of CDN$12.5 million by July 30 – a condition of the agreement to acquire the unconventional resources. 

While the original agreement was made in January, Canshale could not secure financing. In July, Oilsands granted Canshale an extension – to July 30 – to complete the minimum financing. Total consideration for the sale would have been CDN$1 million in cash and 10 million shares of Canshale.

Canshale is a private company formed by Christopher H. Hopkins, the former president and CEO of Oilsands.

Going forward, Oilsands Quest says it is looking for other options. According to Oilsands, other parties have expressed an interest in the oil shale assets and the company will investigate to determine if a sale or joint venture is in the best interests of the company as it looks to focus its financial and management resources on developing its oil sands projects and exploration lands.

According to a May research report by IHS CERA, Canadian oil sands may become top source of crude oil imports to US in 2010.