From Earlier: Oilsands Quest Updates Solicitation Process, Announces Intention to Expand Monitor's Powers and Cancels Proposed Listing on the CNSX

Oilsands Quest Inc.

continues to work with its advisor, TD Securities Inc., to review various bids submitted under the previously announced solicitation process to find investors to acquire, restructure or recapitalize the Company's business. The Company believes that some of the bids received could, if subject to further negotiation, be capable of being brought before the court for approval. Negotiations with certain bidders are ongoing and Oilsands Quest and its court appointed monitor, Ernst & Young Inc., have agreed that the best interests of the Company and its stakeholders would be served by transferring responsibility for managing the Company's operations to the Monitor to reduce operating costs. To accomplish this, the Company intends to apply to the court on Thursday, June 28, to expand the powers of the Monitor to pursue the completion of a transaction. If that application is granted, each member of the Board of Directors intends to resign and leave oversight of the Company's activities in the Monitor's hands. The Monitor is expected to take steps to limit the Company's activities to those core functions necessary to complete a transaction and to distribute the proceeds to the Company's stakeholders pursuant to the Companies' Creditors Arrangement Act ("CCAA") process that was launched late in 2011. In combination with these activities, Oilsands Quest is seeking an extension of the protection of the CCAA until September 28, 2012, to provide the Monitor with adequate time to conclude negotiations and to consider which, if any, of the bids ought to be accepted and brought before to the court. There can be no assurance that this process will result in a financing or a sale of the Company or in any other transaction.