Oilsands Quest granted additional extension for final land relinquishment

    Amex:   BQI

    CALGARY, June 5 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) reports it has
received an extension to the Saskatchewan Government's deadline for the
planned and final relinquishment of a portion of its oil sands exploration
permits located in northwest Saskatchewan. On Friday, June 1, the company was
granted an extension until July 9, 2007.
    "This is very good news, as it will allow us to further extend our
ongoing evaluation of the Saskatchewan permits through additional seismic and
airborne survey programs currently underway," said Christopher H. Hopkins,
President & CEO of Oilsands Quest. "Results of these programs will help us
further refine and optimize our relinquishment plan beyond the Axe Lake
Discovery area."
    As stated in the past, the relinquishment originally scheduled for
May 31, 2006 will result in Oilsands Quest holding oil sands permits totaling
approximately 508,000 acres in northwest Saskatchewan; it will be one of the
largest contiguous land positions in the oil sands industry.

    Winter operations video on web site

    A 10-minute video presentation, featuring activities at the Axe Lake site
during the winter 2006/07 exploration program, has been posted on the
company's web site (www.oilsandsquest.com).
    Oilsands Quest Inc. 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,
placing it at the forefront of the development of an oil sands industry in the
province of Saskatchewan.

    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, including with respect to the
development of the Axe Lake Discovery. Forward-looking information in this
news release is characterized by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate" and other similar words, or
statements that certain events or conditions "may", "will" or "could" occur.
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 such factors as the volatility
and level of oil and natural gas prices, currency exchange rate fluctuations,
uncertainties in cash flow, expected acquisition benefits, exploration
drilling and operating risks, competition, litigation, environmental matters,
the potential impact of government regulations, and other matters. There are
uncertainties inherent in forward-looking information, including factors
beyond Oilsands Quest's control. 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 10KSB 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.

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: jbuick@buickgroup.com

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