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 /CNW/ - 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.





For further information:

For further information: 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

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