Oilsands Cancels Sale of Shale Assets

Oilsands announced the cancellation of the previously disclosed sale of its oil shale assets located near Pasquia Hills, Saskatchewan to Canshale. The sale of these assets was conditional upon Canshale raising a minimum of CDN $12.5 million by July 30. As Canshale was unable to secure that financing, the transaction has been cancelled and the oil shale assets continue to be owned by Oilsands Quest Inc.

OQI has recently had additional expressions of interest in the oil shale assets and will investigate these options to determine if a sale or joint venture of the oil shale assets is in the best interests of the company. This will allow continued focus of our financial and management resources on developing OQI's portfolio of oil sands projects.