Oilsands Quest and Northern Village of La Loche reach formal economic agreement



    Amex:   BQI

    CALGARY, July 24 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) and the Northern
Village of La Loche, Saskatchewan, have signed an exploration agreement which
establishes a formal economic relationship between the two parties. This
agreement follows the memorandum of understanding signed in May 2008. The
basis of the agreement is a commitment to a respectful and ongoing
relationship through which the parties will manage the environmental, social
and economic aspects of Oilsands Quest's exploration activities on La Loche
and neighboring communities.
    The agreement addresses the mutual goal to ensure the economic benefit of
the parties, including providing access to training, employment and business
opportunities for local businesses and residents. While the agreement
presently includes a majority of the residents of the region, it also allows
for other adjacent communities to be included.
    "The completion of the exploration agreement with Oilsands Quest is a
significant achievement," said Georgina Jolibois, Mayor of the Northern
Village of La Loche. "This exploration agreement will provide new
opportunities for local residents and we look forward to continuing to build
upon our strong relationship to develop business, education and employment
opportunities."
    Christopher H. Hopkins, Chief Executive Officer of Oilsands Quest Inc.
said, "This agreement is the result of a concerted effort by the Northern
Village of La Loche and Oilsands Quest. It truly reflects Oilsands Quest's
strong and growing commitment to our neighboring communities."
    Through the agreement, Oilsands Quest will contribute infrastructure
funding to La Loche and adjacent communities. The company also agrees to
assist and cooperate with La Loche and neighboring communities in their
dealings with the governments of Saskatchewan and Canada in regards to
economic development, employment, infrastructure, education and training
funding.
    The agreement was signed in La Loche on June 27, 2008. Oilsands Quest
also recently committed to the purchase of approximately 0.8 hectares (two
acres) of land in La Loche where company support and administrative service
facilities will be constructed.
    Since Oilsands Quest began exploration activities on its oil sands permit
lands in Saskatchewan in 2005, the company has followed a policy of employing
workers from La Loche and other communities in northwestern Saskatchewan as
well as purchasing local goods and services.
    An event will be held later this summer to allow government officials to
join representatives of the Northern Village of La Loche and Oilsands Quest
Inc. to formally recognize the agreement.

    About Oilsands Quest

    Oilsands Quest Inc. 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.





For further information:

For further information: Northern Village of La Loche, Mayor Georgina
Jolibois, Phone (306) 822-2032; Oilsands Quest Inc., Paul K. O'Donoghue, Vice
President, Investor Relations and Corporate Planning, Email
podonoghue@oilsandsquest.com; General inquiries and retail investors, contact
Hedlin Lauder Investor Relations Ltd., Toll Free 1-800-299-7823, Office (403)
232-6251, Email irinfo@hedlinlauder.com; Institutional investors, contact
BarnesMcInerney Inc., Toll Free 1-866-794-7288, Office (416) 371-0510, Email
oilsands@barnesmcinerney.com

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Oilsands Quest Inc.

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