Oilsands Quest Inc. announces further details of $60 million rights offering

CALGARY, July 19, 2011 /CNW/ --
CUSIP# 678046 10 3


NYSE Amex: BQI

CALGARY, July 19, 2011 /CNW/ - Oilsands Quest Inc. (NYSE Amex: BQI)
('Oilsands Quest,' 'OQI' or 'the Company'), announced today changes to
the rights offering announced in a Free Writing Prospectus filed with
the SEC on July 18, 2011 (the 'Rights Offering').

As previously disclosed, holders of Oilsands Quest Sask Inc.
exchangeable shares (the 'Exchangeable Shares') that elect to exchange
their Exchangeable Shares for shares of common stock of the Company by
July 25, 2011, will receive rights exercisable for common shares of the
Company (the 'Rights').  In addition, the Company now proposes that a
holder of Exchangeable Shares that does not exchange Exchangeable
Shares for common shares by July 25, 2011, will receive Rights if it is
a holder of Exchangeable Shares on July 28, 2011 (the 'Record Date').

Accordingly, each holder of shares of common stock of the Company and
each holder of Exchangeable Shares on the Record Date will receive
0.816 subscription rights per share held, not 0.861 subscription rights
per share held as previously disclosed, for a total of 300,000,000
rights.

The Company expects to mail a rights certificate and a prospectus
supplement to each U.S. shareholder, eligible Canadian holder, and each
holder of Exchangeable Shares on or about August 1, 2011. All other
previously announced terms of the rights offering remain unchanged.

This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of these securities in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration of
qualification under the securities laws of any such state or
jurisdiction.

Oilsands Quest has filed a registration statement (including a
prospectus) with the SEC for the offering to which this communication
relates. Before investing, individuals should read the prospectus in
that registration statement, the other documents Oilsands Quest has
filed with the SEC, and the prospectus supplement we will file with the
SEC for more complete information about us and this rights offering.
The documents are available free of charge by visiting EDGAR on the SEC
website at www.sec.gov. Alternatively, Georgeson Inc. will arrange to send you the prospectus
if you request it by calling toll-free 1-888-613-9988.

About Oilsands Quest

Oilsands Quest Inc. (www.oilsandsquest.com) is exploring and developing oil sands permits and licences, located in
Saskatchewan and Alberta, and developing Saskatchewan's first
commercial oil sands discovery.  It is leading the establishment of the
province of Saskatchewan's emerging oil sands industry.

Forward-looking statements:

This news release includes certain statements that may be deemed to be
'forward-looking statements.' All statements, other than statements of
historical facts, included in this free writing prospectus that address
activities, events or developments that our management expects,
believes or anticipates will or may occur in the future are
forward-looking statements. Such forward-looking statements include
discussion of such matters as:

    --  the Company's plans to raise additional capital;
    --  implementation of the Company's business plan;
    --  the amount and nature of development and exploration
        expenditures;
    --  the timing of exploration and development activities;
    --  potential reservoir recovery optimization processes; and
    --  business strategies and development of our business plan and
        drilling programs.

Forward-looking statements are statements other than relating to
historical fact and are frequently characterized by words such as
'plan', 'expect', 'project', 'intend', 'believe', 'anticipate',
'estimate', 'potential', 'prospective' and other similar words or
statements that certain events or conditions 'may' 'will' or 'could'
occur. Forward-looking statements such as references to Oilsands
Quest's drilling program, geophysical programs, reservoir field testing
and analysis program, preliminary engineering and economic assessment
program for a first commercial project, and the timing of such programs
are based on the opinions and estimates of management at the date the
statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those anticipated in the
forward-looking statements, which include but are not limited to the
ability to raise additional capital, risks associated with the
Company's ability to implement its business plan, risks inherent in the
oil sands industry, regulatory and economic risks, land tenure risks,
lack of infrastructure in the region in which the company's resources
are located and risks associated with the Company's ability to
implement its business plan.  The Company 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.

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Investor Relations
Email: ir@oilsandsquest.com
Investor Line: 1-877-718-8941