Oilsands Quest Inc. Contributes $1 Million to Saskatchewan Research Council for a...

Oilsands Quest Inc. Contributes $1 Million to Saskatchewan Research Council
for a Scaled Physical Model

Model applications will lead to advancements in oil sands recovery
technology

Amex: BQI

CALGARY, Sept. 2 /PRNewswire-FirstCall/ - Oilsands Quest Inc. (AMEX:BQI)
announces a $1 million contribution to the Saskatchewan Research Council (SRC)
which will be applied towards the construction of a critical piece of
equipment that will be used to develop recovery methods suitable for Canada's
oil sands deposits.
"For many years we have played a key role in enabling Saskatchewan operators
to develop the province's conventional light, medium and heavy oil resources,"
said SRC President and CEO, Laurier Schramm. "This significant contribution by
Oilsands Quest towards research equipment demonstrates their commitment to the
advancement of technology in this key area, and will allow us to continue to
provide dedicated research and development to respond to the specific needs of
Saskatchewan's oil sands industry."
SRC has been working with the Canadian oil sands industry since the 1970s to
provide technical solutions to enable access to the heavy and extra-heavy oil
resources located deep underground, and more recently for in-situ extra-heavy
oil located in Saskatchewan's oil sands deposits. Over the last decade, SRC
has been involved in developing and assessing recovery processes in order to
produce the extra-heavy oil, also known as bitumen, to the surface.
Oilsands Quest will benefit from SRC's work for the Axe Lake Discovery located
in northwest Saskatchewan near the Alberta border, where in-situ production
potential has been reported. "Access to SRC's research in thermal-solvent
extraction processes is important to us, as we advance our recovery
optimization testing and assessment." said Dr. Erdal YILDIRIM, President of
Oilsands Quest Technology Inc. a wholly owned subsidiary of Oilsands Quest.
"We are very pleased to help support SRC in their innovative heavy oil and
bitumen recovery research."
SRC has found that a combination of thermal and solvent extraction processes
(TSX) are significantly less energy intensive, use less water and are much
more suitable for the oil sands deposits found in Saskatchewan and parts of
Alberta. The contribution by Oilsands Quest will be used towards the design,
construction, and commissioning of a large scale,
variable-pressure/temperature 3D lab-based physical model that will allow
rapid development, technology deployment and commercial application of the TSX
process. The model will be located at SRC's research facilities in Regina.

About Oilsands Quest Inc.

Oilsands Quest Inc. (AMEX:BQI) is applying its technical expertise to develop
multiple global-scale discoveries while aggressively exploring Canada's
largest contiguous oil sands land holding. The company (www.oilsandsquest.com)
is the originator of Saskatchewan's emerging oil sands industry.

About Saskatchewan Research Council

SRC is Saskatchewan's lead provider of applied research, development,
demonstration, and commercialization. SRC takes leading-edge knowledge
developed in Saskatchewan and sells it to the world, and SRC brings the best
knowledge the world has to offer and applies it to Saskatchewan industry's
problems.

Forward-looking information

Except for statements of historical fact relating to Oilsands Quest Inc., this
news release contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is frequently
characterized by words such as "plan", "expect", "project", "intend",
"believe", "anticipate", "estimate", "potential", "prospective", "develop" and
other similar words, or statements that certain events or conditions "may",
"will", or "could" occur. Forward-looking statements such as references to
Oilsands Quest's exploration, technical and development programs are based on
the opinions and estimates of management and Oilsands Quest's independent
evaluators at the date the statements are made and are subject to a variety of
risks and uncertainties and other factors that could cause actual events or
results to differ materially from those anticipated in or implied by the
forward-looking statements. These risks, uncertainties and other factors
include, but are not limited to, exploration and technical risks inherent in
the oil sands industry, regulatory and economic risks, lack of infrastructure
in the region in which the company's resources are located and risks
associated with Oilsands Quest's ability to implement its business plan. There
are uncertainties inherent in forward-looking information, including factors
beyond Oilsands Quest's control, and no assurance can be given that the
programs will be completed on time, on budget or at all. There is no certainty
that it will be commercially viable to produce any portion of Oilsands Quest's
resources. Oilsands Quest undertakes no obligation to update forward-looking
information if circumstances or management's estimates or opinions should
change, except as required by law. The reader is cautioned not to place undue
reliance on forward-looking statements. The risks and uncertainties set forth
above are not exhaustive. Readers should refer to Oilsands Quest's current
annual report on Form 10-K and other document filings, which are available at
www.sedar.com and at www.sec.gov for a detailed discussion of these risks and
uncertainties and details regarding the location and extent of Oilsands
Quest's land holdings.

SOURCE Oilsands Quest Inc.

Paul K. O'Donoghue, MBA, Vice President, Investor Relations and Corporate
Planning, Oilsands Quest Inc., Email: podonoghue@oilsandsquest.com, (403)
263-1623; Erin Taman Athmer, Communications Advisor, Saskatchewan Research
Council, Email: taman-athmer@src.sk.ca, (306) 933-7089