Oilsands Quest announces underwritten private placement of Flow-Through Common Shares



    Amex:   BQI

    CALGARY, Sept. 23 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) announced today
that it has entered into a private placement financing agreement (the
"Offering") with a syndicate of underwriters on a bought deal basis, to issue
3,266,000 common shares on a flow-through basis ("Flow-Through Shares"). The
Flow-Through shares will be issued to investors at a price of CDN$3.675
(US$3.50) per share, for total gross proceeds to Oilsands Quest of
approximately CDN$12 million.
    This financing is in addition to the non-brokered private placement of up
to 6,642,857 Flow-Through Shares announced previously by Oilsands Quest,
priced at US$3.50 (CDN$3.675) per share, for aggregate proceeds of up to
US$23.3 million (CDN$24.4 million).
    The earlier announced private placement and the Offering are expected to
result in aggregate gross proceeds of US$34.9 million (CDN$36.4 million). The
proceeds from the non-brokered private placement and the Offering will be used
to incur Canadian Exploration Expenses through exploration work relating to
its planned exploration programs.
    The Flow-Through Shares will be issued to investors in Canada pursuant to
certain exemptions from prospectus requirements. Investors in the United
States should be aware that Flow-Through Shares will not be offered in the
United States.
    Closing of the Offering is expected to occur on or about October 3, 2008
and is subject to American Stock Exchange approval and the completion of
definitive documentation.
    The Flow-Through Shares issued pursuant to the offerings have not been
registered under the United States Securities Act of 1933, as amended (the
"Securities Act") and may not be offered or sold in the United States or to
U.S. persons (as such term is defined in Regulation S under the Securities
Act) absent a registration statement or an applicable exemption from
registration. This notice is not an offer to sell or a solicitation of an
offer to buy such securities and is issued pursuant to Rule 135c under the
Securities Act of 1933.





For further information:

For further information: Paul K. O'Donoghue, MBA, Vice President,
Investor Relations and Corporate Planning, Oilsands Quest Inc., Email:
investorrelations@oilsandsquest.com, (403) 263-1623

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Oilsands Quest Inc.

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