Oilsands Quest comments on road block by aboriginal group in Saskatchewan

    Amex:   BQI

    CALGARY, June 22 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) states its
position on issues surrounding a road blockade created yesterday (June 21) by
the Clearwater River Dene Nation in northwest Saskatchewan.
    "Our current operations have not been affected by the roadblock," said
Christopher H. Hopkins, President & Chief Executive Officer of Oilsands Quest.
The company's base camp and operations, which are to a great degree
self-sufficient, are located about 150 kilometres from the location of the
roadblock, which is on the Clearwater River Dene Nation (CRDN).
    "Due to media inquiries we have been receiving, we felt it was necessary
to communicate our response to comments made in a news release by the CRDN,"
said Mr. Hopkins. "Oilsands Quest has been working closely with the
communities in the northwest region, in particular the Clearwater River Dene
Nation and the town of La Loche, on training, employment and other commercial
benefits, and we will continue to do so in the future."
    Working with leaders of the local communities, the company has
pro-actively established an excellent record for local employment and purchase
of goods and services in northwest Saskatchewan. In addition, Oilsands Quest
has been negotiating with CRDN to formalize an Exploration Benefits Agreement.
The company is also in discussion with the mayor and council of La Loche for a
similar agreement.
    "The agreements deal with jobs and contracts, and must reflect our goal
that the economic benefits of our activities should be available to all
stakeholders in the region," said Mr. Hopkins. "We respect the unique rights
and interests of the CRDN and, given our good relationship with them, thought
we could come to an agreement. However, they broke off discussions at a
meeting we had with the CRDN Chief and Council in Saskatoon on Wednesday,
June 20."
    According to a news release issued by the CRDN on Thursday, June 21:
(quote) "Clearwater tabled a draft agreement that included provisions which
met industry standards in relation to benefits to accrue to the First Nation.
Oilsands Quest proposed an agreement which fell short of industry standards in
all respects." (end quote)
    "We simply disagree," said Mr. Hopkins. "I have been involved in oil
sands development for years, and have seen many different forms of benefits
arrangements. These agreements differ depending on the project and its impact,
and the particular rights and interests of the communities concerned. There is
no industry standard. Oilsands Quest tabled a draft agreement that was fair to
all stakeholders and the CRDN. In our view, the CRDN draft did not meet that
standard. It demanded that the CRDN have priority over all other First Nations
people, Métis and other residents of neighboring communities."
    "We are disappointed that the CRDN leadership chose to abruptly suspend
our negotiations and that they have chosen to block the highway," said Mr.
Hopkins. "We look forward to resolving this issue as quickly as possible to
the benefit of all parties. We are, of course, consulting with the Province.
We will continue to closely monitor the situation and hope to see some
positive action soon."

    Headquartered in Calgary, Alberta, Oilsands Quest Inc.
(www.oilsandsquest.com) is building long-term shareholder value through
exploration of its oil sands permits in Saskatchewan and Alberta. The company
has initiated pre-commercialization studies for its Axe Lake Discovery in
northwest Saskatchewan, placing it at the forefront of the development of an
oil sands industry in the province of Saskatchewan.

    Forward-Looking Information This news release contains certain
"forward-looking information" within the meaning of applicable securities law,
particularly with respect to the effect of the blockade on the Company's
operations over time. These statements are based on certain assumptions and
analyses made by us in light of our experience and our perception of
historical trends, current conditions, expected future developments and other
factors we believe are appropriate in the circumstances. Such statements are
subject to a number of assumptions, risks and uncertainties, including the
assumption that the blockade will be resolved within a reasonable period of
time. There are uncertainties inherent in forward-looking information,
including future actions of third parties such as the CRDN, the courts and
government, as well as other factors beyond Oilsands Quest's control. 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 10KSB and other
document filings, which are available at ww.sedar.com and at www.sec.gov for a
detailed discussion of these risks and uncertainties.

For further information:

For further information: 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 The
Buick Group, Toll Free 1-877-748-0914, Office (416) 915-0915, Email

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