Three-dimensional geostatistical studies of delineating an optimal exploitation location for oil sand in McMurray Formation, Athabasca, Canada were carried out. The area is mainly composed of unconsolidated to semi-consolidated sand where breccia, mud, clay, etc. are associated as alternating layers. For the prediction of the optimal location of steam assisted gravity drainage (SAGD) technique, the conventional approach of cumulating the predicted thickness of the media with higher bitumen bearing possibility (i.e. Breccia and Sand) was pursued. As an alternative measure, mean vertical extension of the permeable media was also assessed based on vertical transition rate of each media and the corresponding optimal location was decided. For the both predictions, 110 borehole data acquired from the study area were analyzed under Markovian transition probability (TP) framework and three-dimensional distributions of the composing media were predicted stochastically through an existing TP based geostatistical model. The effectiveness of the two competing measures (cumulative thickness and mean vertical extension) for SAGD applications was verified through two?dimensional dual-phase flow simulations where high temperature steam was injected in the delineated reservoirs, and the size of steam chamber was compared. The results of the two-dimensional SAGD simulation have shown that the geologic formation containing the highest mean vertical extension of permeable media is more suitable for the development of the oil sand by developing larger size of steam chamber compared to that from the highest cumulative thickness. Given those two-dimensional results, the cumulative thickness alone may not be a sufficient criterion for an optimal SAGD site and the mean vertical extension of the permeable media needs to be jointly considered for the sound selections.