May 3, 2010 (FinancialWire) –  Oilsands Quest, Inc. (AMEX: BQI) said that it has entered into non-brokered private placement financing agreements with institutional shareholders for flow-through common shares and common shares. The company aims to raise as much as $ CDN $18.2 million.

The company said it has agreed to issue 10.5 million common shares on a flow-through basis at a price of CDN$1.00 (or US$ 0.995) per share, for total gross proceeds to Oilsands Quest of around CDN$10.5 million.

The flow-through shares will be issued to investors in Canada.

Oilsands Quest said it has also agreed to issue 9.2 million common shares at US$0.85 per share for total gross proceeds to Oilsands Quest of around US$7.8 million.

The common shares will be issued on a private placement basis pursuant to certain exemptions from the registration requirements under U.S. Securities laws and from the prospectus and registration requirements under Canadian Securities laws.

Oilsands said it will use the proceeds from the offering to meet Oilsands Quest's work commitments on its existing oil sands leases and to conduct initial engineering, drilling and construction to prepare for a planned SAGD test at Test Site 1 later in 2010.

Canada-based Oilsands Quest is developing a global-scale oil sands discovery at Axe Lake in Saskatchewan, while exploring one of Canada's largest holdings of contiguous oil sands permits and licenses, located in Saskatchewan and Alberta.

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