8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 3, 2007

Oilsands Quest Inc.

(Exact name of registrant as specified in its charter)

Colorado	0-27659	98-0461154
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

205, 707— 7th Avenue S.W. Calgary, Alberta, Canada	T2P 3H6
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (403) 263-1623

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry in to a Material Definitive Agreement.

On May 3, 2007, Oilsands Quest Inc. (the “Company”) and Oilsands Quest Sask Inc., the Company’s wholly owned subsidiary (“OQI Sask”) entered into an agency agreement for a private placement (the “Agency Agreement”) with a syndicate of agents (the “Agents”) of up to 14,000,000 shares of the Company’s common stock, $.001 par value per share (the “Common Shares”) at a price of US$2.75 per share for an aggregate gross proceeds of US$38,500,000.

Concurrently with the Agency Agreement, and under the terms and conditions of the Agency Agreement, the Company closed on the sale of 13,900,000 Common Shares pursuant to subscription agreements (the “Subscription Agreements”) with the subscribers, as more fully described under Item 3.02, below.

According to the terms and conditions of the Agency Agreement, the Company has agreed to reduce the price per share to US$2.50 if the Company does not file a resale registration statement with the U.S. Securities and Exchange Commission registering the Common Shares on or before 5:00 p.m. (Calgary time) on July 2, 2007. Such reduction in price shall be satisfied by issuing to the subscribers 0.1 of a Flow-Through Share for each Flow-Through Share subscribed for by the subscribers. In consideration for the services of the Underwriters, the Company agreed to pay a fee equal to US$0.158 (or 5.75%) for each Common Share subscribed for and accepted by the Company.

As previously reported, in March 2007, the Company and OQI Sask entered into an underwriting agreement for a private placement (the “Underwriting Agreement”) with a syndicate of underwriters (the “Underwriters”) of up to 5,320,000 shares of the Company’s common stock issued on a “flow-through” basis (the “Flow-Through Shares”) at a price of Cdn. $5.64 per share (the “Purchase Price”). According to the Underwriting Agreement, the Company agreed to reduce the price per share to Cdn. $5.13 (the “Adjusted Price”) if the Company does not file a resale registration statement with the U.S. Securities and Exchange Commission registering the Flow-Through Shares on or before 5:00 p.m. (Calgary time) sixty days after closing.

On May 3, 2007, the parties amended the Underwriting Agreement (the “Amending Agreement”), and pursuant to the terms of the Amending Agreement, the Purchase Price was reduced to Cdn. $3.85 per share and the Adjusted Price was reduced to Cdn. $3.50. The Underwriters agreed to pay the Company the difference between Cdn. $3.85 and the original Purchase Price per Flow-Through Share purchased pursuant to the Underwriting Agreement as amended. In consideration for the services of the Underwriters, the Company agreed to pay a fee equal to Cdn. $0.282 for each Flow-Through Share subscribed for and accepted by the Company.

Concurrently with the Amending Agreement, and under the terms and conditions of the Underwriting Agreement, as amended, the Company closed on the sale of 2,164,166 Flow-Through Shares pursuant to subscription agreements (the “Flow-Through Subscription Agreements”) with OQI Sask and the subscribers, as more fully described under Item 3.02, below.

Item 3.02 Unregistered Sales of Equity Securities.

On May 3, 2007, the Company closed on the sale of 13,900,000 Common Shares at a price of US$2.75 per share for gross proceeds of US$38,225,000 pursuant to the Subscription Agreements with the subscribers (the “Offering”). In connection with the Offering, the

Company paid an aggregate of US$2,197,938 in fees to the Agents pursuant to the Agency Agreement.

The Common Shares were sold to investors in Canada pursuant to Regulation S and to accredited investors pursuant to Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). The Common Shares have not been registered under the Securities Act and may not be offered or sold absent a registration statement or an applicable exemption from registration.

On May 3, 2007, the Company closed on the sale of 2,164,166 Flow-Through Shares at a price of Cdn. $3.85 per share for gross proceeds of Cdn. $8,332,039 pursuant to the Flow-Through Subscription Agreements with OQI Sask and the subscribers (the “Flow-Through Offering”). In connection with the Flow-Through Offering, the Company received an additional payment of Cdn. $3,873,857 from the Underwriters pursuant to the terms of the Underwriting Agreement, as amended. The Company paid an aggregate of $610,295 in fees to the Underwriters.

The Flow-Through Shares were sold to investors in Canada pursuant to Regulation S under the Securities Act. The Flow-Through Shares have not been registered under the Securities Act and may not be offered or sold in the United States or to U.S. persons as such term is defined in Regulation S under the Securities absent a registration statement or an applicable exemption from registration.

Item 8.01 Other Events.

On May 4, 2007, the Company issued a press release. The press release is filed as Exhibit 99.1 to this report and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated May 4, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Oilsands Quest Inc. (Registrant)
Date: May 4, 2007	/s/ Karim Hirji
	Name:	Karim Hirji
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated May 4, 2007.

EX-99.1

Exhibit 99.1

NEWS RELEASE

DATE: May 4, 2007

FOR IMMEDIATE RELEASE

Oilsands Quest announces completion of previously announced private placements

Calgary, Alberta — Oilsands Quest Inc. (Amex: BQI), announces the completion of two previously announced private placements of flow-through common stock and common stock.

Oilsands Quest issued 13.9 million common shares on May 3, 2007 for gross proceeds of $38.2 million US in a private placement previously announced on April 18, 2007. The proceeds will be used to repay debt incurred in conjunction with recently announced property acquisitions, and for pre-commercial recovery testing and analysis relating to its Axe Lake Discovery, working capital and general corporate purposes.

The Company also completed its private placement of flow-through shares with a syndicate of underwriters on a bought deal basis initially announced on February 20, 2007. Oilsands Quest issued 2,164,166 flow-through common shares for gross proceeds of $12.2 million Cdn ($10.4 million US) on May 3, 2007 under the terms of its underwriting agreement with the underwriters. Together with previous closings on March 6, 2007 and March 9, 2007, the Company issued a total of 5,320,000 flow-through common shares in the underwritten flow-through share financing, for total gross proceeds of $30 million Cdn ($25.6 million US). The proceeds will be used to incur Canadian Exploration Expenses on resource delineation and other exploration work relating to Oilsands Quest Sask Inc.’s permit lands following the 2006-2007 winter exploration program. Oilsands Quest Sask Inc. is a subsidiary of Oilsands Quest.

Oilsands Quest Inc. is involved in oil sands exploration focused primarily on its oil sands exploration permits in Saskatchewan and Alberta. The company has initiated pre-commercialization studies for its Axe Lake Discovery, placing it at the forefront of the development of an oil sands industry in the province of Saskatchewan.

Forward-Looking Information

Except for statements of historical fact relating to the company, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” “will” or “could” occur. Forward-looking statements such as the references to Oilsands Quest Inc.’s financing plans, drilling program, geophysical programs, testing and analysis programs and 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 risks inherent in the oil sands industry, regulatory and economic risks, and risks associated with the company’s ability to implement its business plan. There are uncertainties inherent in forward-looking information, including factors beyond Oilsands Quest Inc.’s control, and no assurance can be given that the financing or the programs will be completed on time, on budget or at all. Oilsands Quest Inc. 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. The risks and uncertainties set forth above are not exhausting. Readers should refer to Oilsands Quest’s current annual report on Form 10KSB and other document filings, which are available at www.sedar.com and at www.sec.gov for a detailed discussion of these risks and uncertainties and details regarding the location and extent of the Oilsands Quest permit lands.

For more information:

General inquiries and retail investors, contact Hedlin Lauder Investor Relations Ltd.

Toll Free	1-800-299-7823
Office	403-232-6251
Email	irinfo@hedlinlauder.com

Institutional investors, contact The Buick Group

Toll Free1-	877-748-0914
Office	416-915-0915
Email	jbuick@buickgroup.com