Oilsands Quest provides update of recent activities on its Saskatchewan oil sands permits

    Amex:   BQI

    CALGARY, June 7 /CNW/ - Oilsands Quest Inc. (Amex:   BQI) reports a high
level of activity on its oil sands exploration permits in northwest
Saskatchewan, where current field activities are focused on geophysical
programs and environmental studies.
    "We have just completed a significant seismic survey, and we have
initiated an extensive airborne magnetic survey program," said Christopher H.
Hopkins, President and CEO of Oilsands Quest. "Subject to regulatory approval,
we plan to continue with more seismic and drilling throughout the summer.
Equally important, in preparation for potential commercialization, we have
launched a major program of baseline environmental studies."

    Field activities update

    On May 8, permits were granted by the Saskatchewan Government for the
continuation and expansion of 2-D seismic surveys. Since then, approximately
60 kilometres (37 miles) of seismic have been completed, primarily along the
main road from Provincial Highway 955 to the site of Oilsands Quest's base
camp. The company plans to continue to undertake seismic work, including 3-D
seismic surveys. Over 160 kilometres (100 miles) of seismic were run during
the winter 2006/07 exploration program. Subject to approval, the company also
plans to conduct additional seismic surveys on its Alberta permits which are
immediately west of its Saskatchewan permits.
    Last week, two fixed-wing aircraft began a high-resolution, intensive
21,000-kilometre (13,000-mile) airborne magnetic survey program within the
company's Saskatchewan permit lands, building further on the 850 kilometres
(530 miles) of airborne surveys made this past winter.
    During the past two months since completion of winter drilling
operations, Oilsands Quest's base camp has hosted a daily work force of up to
55 people involved in a variety of field program activities.

    Baseline environmental studies initiated

    Environmental activities, which include environmental monitoring on an
ongoing basis, have escalated dramatically this summer to include a
comprehensive, $4 million program of baseline environmental studies. This
program, which is integral to the timeline for potential project development,
began in early April and will continue through the summer and fall.
    Involving approximately 16 environmental disciplines and 40 to 50 people
in the field, the baseline studies are focusing on such topics as water and
air quality, hydrogeology, fisheries, soils and terrain, vegetation, wildlife,
biodiversity, and traditional land use and ecological knowledge.

    Pre-commercialization studies advancing

    In tandem with field operations, Oilsands Quest is also advancing the
pre-commercialization evaluation studies of its Axe Lake Discovery. Dr. Erdal
Yildirim, Executive Vice President, Project Development, said, "We are working
with industry-leading specialists and participating in the evaluation of a
number of alternative production methods expected to optimize recovery for our
reservoir, as well as finalizing the timelines for the Axe Lake in-situ
bitumen recovery field pilot."

    Technical office opened in Calgary

    In early May, the company opened a technical facility in the light
industrial area of northeast Calgary for its growing geological and
engineering staff. At the present time, Oilsands Quest has 23 employees.

    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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