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 13, 2010

Oilsands Quest Inc.

(Exact name of registrant as specified in its charter)

Colorado	001-32994	98-0461154
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

800, 326— 11th Avenue SW Calgary, Alberta, Canada	T2R 0C5
(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):

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

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

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

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

Item 8.01.                      Other Events.

On May 13, 2010, Oilsands Quest Inc. issued a press release announcing the closing of its previously-announced non-brokered private placement.  A copy of the press release is attached as Exhibit 99.1 and incorporated by reference herein.

Item 9.01.                      Financial Statements and Exhibits.

(d)                 Exhibits.

99.1                      Press Release dated May 13, 2010

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 14, 2010	By:	/s/ Garth Wong
		Name: Garth Wong
		Title:   Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated May 13, 2010

EX-99.1

  CUSIP# 678046 10 3 NYSE Amex: BQI  

NEWS RELEASE

Date: May 13, 2010

Oilsands Quest announces closing of non-brokered private placement of

Flow-Through and Common Shares

Calgary, Alberta -- Oilsands Quest Inc. (NYSE Amex: BQI) announced today the completion of its previously announced non-brokered private placement of flow-through and common shares. Oilsands Quest issued approximately 19.7 million shares of common stock to several existing institutional shareholders for total gross proceeds of approximately US$18.2 million.

Oilsands Quest has issued 10.5 million common shares on a flow-through basis to investors at a price of CDN$1.00 (US$ 0.995) per share, for total gross proceeds to Oilsands Quest of CDN$10.5 million.

The flow-through shares were issued to investors in Canada 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 Quest has also issued approximately 9.2 million common shares at a price of US$0.85 per share for total gross proceeds to Oilsands Quest of approximately US$7.8 million.

The common shares were 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.

The proceeds from the offering will be used 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.

The flow-through and common shares issued pursuant to this offering have not been registered under the United States Securities Act of 1933, as amended (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 Act) absent a registration statement or an applicable exemption from registration.

This notice is not an offer to sell or a solicitation of an offer to buy such securities and is issued pursuant to Rule 135c under the Securities Act of 1933.

About Oilsands Quest

Oilsands Quest Inc. (www.oilsandsquest.com) is developing Saskatchewan’s first global-scale oil sands discovery at Axe Lake, while exploring one of Canada's largest holdings of contiguous oil sands permits and licenses, located in Saskatchewan and Alberta. It is leading the establishment of the province of Saskatchewan's emerging oil sands industry.

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  CUSIP# 678046 10 3 NYSE Amex: BQI  

Forward-looking Information

This news release contains certain “forward-looking information” within the meaning of applicable securities law including statements regarding the completion of the Offering and the Company's expected use of proceeds of the Offering. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Annual Report on Form 10K for the year ended April 30, 2009, and subsequent quarterly reports on Form 10Q availab le on www.sedar.com and www.edgar.com.  The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change, unless required by law.  The reader is cautioned not to place undue reliance on forward-looking statements.

For more information contact:

Riyaz Mulji

Manager, Investor Relations

Email: ir@oilsandsquest.com

Investor Line: 1-877-718-8941

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