Oilsands Quest clarifies 2008/2009 spending plan and funding alternatives

CALGARY, Sept. 12 /PRNewswire-FirstCall/ - Oilsands Quest Inc. (AMEX:BQI)
announces, in light of recent volatility in the trading of the company's
shares, that it is not aware of any corporate developments that would impact
the trading of its stock that were not disclosed in its recent quarterly
filing or the quarterly update news release it issued previously.
Oilsands Quest further clarifies that the expenditure plans disclosed in its
recent Form 10-Q Quarterly Filing, and previously released in its 10-K Annual
Report, include a combination of expenditures associated with its reservoir
test program at its Axe Lake Discovery, planned exploration expenditures on
its remaining prospects and activities necessary to establish a commercial
development plan for the Axe Lake Discovery. As discussed in the Form 10-Q,
the Company has approximately $70 million of cash on hand which is sufficient
to complete the currently planned testing program at Axe Lake and fund its
core operations over the next 12 months. Additional capital requirements for
its exploration and commercialization plans are expected to be met by one or
more funding alternatives, including a public offering or private placement of
equity or debt securities, as well as considering joint venture partners on
our specific projects. Oilsands Quest will continue to monitor the capital
markets and other potential sources of funding, and has the ability to modify
the methods and timing of its planned exploration and development programs,
and its other capital expenditure plans, if necessary, to optimize the
execution of its business plan in a prudent manner that is in the best
interests of the company and its shareholders.

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 is the originator of
Saskatchewan's emerging oil sands industry. More information is available at
www.oilsandsquest.com.

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 drilling programs, exploration programs, geophysical
programs, reservoir testing and analysis program, and the timing of such
programs are based on the opinions and estimates of management and the
company'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
the forward-looking statements, which include, but are not limited to, 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 the company's ability to implement its business plan.
There is no certainty that it will be commercially viable to produce any
portion of the company's oil sands resources. 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. 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: investorrelations@oilsandsquest.com,
(403) 263-1623