Oilsands Quest Completes Financing and is Ready to Begin Drilling

Oilsands Quest has successfully completed a $4.4 million equity financing with CIBC World Markets Inc. acting as its agent, fully funding its planned 2005 exploration program. The Company has submitted a detailed exploration proposal to the Province of Saskatchewan to initiate exploratory drilling on permits the Company owns. Oilsands Quest has also initiated a process of local community consultation to establish awareness and understanding of the Company's plans for its exploration program, which subject to Government approval will start this summer.

Oilsands Quest holds a 100% interest in 13 exploration permits covering 846,680 acres (342,639 hectares) of land in northwest Saskatchewan.

Basis for the exploration program

The purpose of the exploration program is to prove the Company's belief its permits contain eastern extensions of the rich bitumen trends found in Alberta. Cores and logs from exploratory drilling on the Company's permits in the 1970s provide proof of bitumen-bearing sand deposition; there are also numerous visible bitumen-bearing outcrops nearby. This information, correlated with current data from exploration programs in Alberta near the Saskatchewan border, has led Oilsands Quest to propose its exploration program with the goal of proving the existence of commercially viable oil sands deposits in Saskatchewan.

At the present time, the closest bitumen production in the Athabasca oil sands region is Suncor Inc.'s Firebag Project, which is located within 50 km of Oilsands Quest's permit boundary. Also nearby are the Synenco Northern Lights, Husky Sunrise and Imperial Oil Kearl Lake oil sands projects.

Initial exploration program

Oilsands Quest plans to drill, core and geophysically log 25 resource delineation wells during the summer of 2005. The Company is also seeking Government approval for construction of a main access road, trails to drill locations and the site for a 16-person camp.