Oilsands Quest Provides Update and Announces Presentation at Insight Canadian Oil Sands Summit and TD Securities Oil Sands Forum

    Amex:   BQI

    CALGARY, Jan. 7 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) today announced
the resumption of its overburden characterization program and the reservoir
test activities at Test Sites 1 and 3 at Axe Lake in northwest Saskatchewan.
Also being resumed is Oilsands Quest's 2009 winter exploration drilling
program on its Raven Ridge lands in Alberta. Additionally, the Company is
pleased to announce its participation in two conferences being held in
Calgary, Alberta and London, England during January 2009.
    "We expect drilling at Raven Ridge will increase our resource estimates
and capitalize on last winter's exploration success on these lands," said
Jamey Fitzgibbon, President and Chief Operating Officer.
    Oilsands Quest is resuming activity at Test Sites 1 and 3 following a
short break for their workforce over the holidays. At Test Site 3 the Company
is continuing the preliminary testing of low energy heat transfer and fluid
mobility within the reservoir. Furthermore, at Test Site 1 the Company is
completing construction and commissioning of their steam/injection facilities
as they plan for first steam injection later this year.
    "Given the uncertainty prevailing in the markets, it is imperative that
we maintain the balance between preserving our liquidity and increasing our
value through high impact investments," said Christopher H. Hopkins, Chief
Executive Officer. "We will control our costs and sustain our team and assets
through this globally challenging period."

    Raven Ridge Exploration Program

    As of today, approximately 50 workers and three core hole drilling rigs
are being mobilized with the plan to drill and log 25 core holes in the Raven
Ridge area in Alberta. Drilling is planned to commence on Township 94, Range
1, West 4, towards the end of the week and the field portion of the program is
expected to be completed by late February. The exploration program will gather
additional data to assist in confirming Oilsands Quest's geological models and
bring further confidence to the Company's resource estimates.

    Axe Lake Overburden Characterization Program

    Oilsands Quest is undertaking a comprehensive drilling, coring and
testing program to evaluate the physical properties of the complex layering of
sand, lacustrine clay and till within the Quaternary age sediments overlying
the McMurray formation in the Axe Lake area. The data gathered will be used to
accurately calibrate laboratory, modeling and simulation work and help
configure the instrumentation at Test Site 1.

    Insight Canadian Oil Sands Summit and TD Newcrest Oil Sands Forum

    Christopher H. Hopkins, Chief Executive Officer of Oilsands Quest will be
presenting a Corporate Update on the Company's current activities and plans

    -   Insight Canadian Oil Sands Summit on Tuesday, January 13, 2009 in
        Calgary, Alberta, Canada.

    -   TD Newcrest Oil Sands Forum on Monday, January 19, 2009 in London,

    The presentations will be posted the day of the conference and can be
viewed at www.oilsandsquest.com

    About Oilsands Quest

    Oilsands Quest Inc. (www.oilsandsquest.com) is aggressively exploring
Canada's largest holding of contiguous oil sands permits and licences, located
in Saskatchewan and Alberta, and developing Saskatchewan's first global-scale
oil sands discovery. It is leading the establishment of the province of
Saskatchewan's emerging oil sands industry.

    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 drilling programs, exploration programs,
geophysical programs, reservoir testing and analysis program, and the timing
of such programs are based on the opinions and estimates of management and the
company'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
the forward-looking statements, which include, but are not limited to, 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 the company's ability to implement its business plan.
There is no certainty that it will be commercially viable to produce any
portion of the company's oil sands resources. 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. 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, Email: ir@oilsandsquest.com,
Investor Line: (403) 263-1623

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