Oilsands Quest Inc.

BQI 3.09, -0.09, -2.8%) announced today that it has entered into a non-brokered private placement flow-through share agreement with UTA Asset Management Corporation ("UTA").

Oilsands Quest will issue 5,142,857 shares of common stock on a flow-through basis (the "Flow-Through Shares") at a price of US$3.50 (CDN$3.675) per share to funds managed by or affiliated with UTA, for aggregate gross proceeds of US$18.0 (CDN$18.9) million. Up to an additional 1,500,000 Flow-Through Shares may be issued to affiliates and employees of Oilsands Quest at the same price per share for additional aggregate gross proceeds of up to US$5.25 (CDN$5.5) million. The Flow-Through Shares will be issued pursuant to certain exemptions from prospectus requirements. Investors in the United States should be aware that Flow-Through Shares will not be offered in the United States. The proceeds of the Offering will be used to incur Canadian Exploration Expenses through exploration work relating to its exploration programs.

Closing of the Offering is expected to occur on or about September 26, 2008 and is subject to American Stock Exchange approval and the completion of definitive documentation.

The Flow-Through Shares issued pursuant to this Offering have not been registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States or to U.S. persons (as such term is defined in Regulation S under the Securities Act) absent a registration statement or an applicable exemption from registration. This notice is not an offer to sell or a solicitation of an offer to buy such securities and is issued pursuant to Rule 135c under the Securities Act of 1933.