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) December 23, 2009

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 December 23, 2009, Oilsands Quest Inc. (the “Company”) issued a press release announcing the closing of its previously-announced non-brokered private placement.  The offering was upsized from the previously announced 8.57 million shares at $1.05 per share to 9.71 million shares at the same price per share for gross proceeds of US$10.2 million to the Company.  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 December 23, 2009

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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.

Date: December 23, 2009                                                                

Oilsands Quest Inc.

(Registrant)

/s/ Garth Wong

Name:  Garth Wong

Title:    Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.         Description

99.1                      Press Release dated December 23, 2009

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EX-99.1 CHARTER

EXHIBIT 99.1

CUSIP# 678046 10 3

NYSE Amex: BQI

NEWS RELEASE

DATE:  December 23, 2009

Oilsands Quest Inc. announces upsizing and closing of previously-announced private placement

Calgary, Alberta – December 23, 2009 – Oilsands Quest Inc. (Amex: BQI) (the “Company”) announced today the closing of its previously-announced non-brokered private placement (the “Offering”).  The accredited institutional investors upsized their subscriptions from the previously announced 8.57 million shares at $1.05 per share to 9.71 million shares at the same price per share for gross proceeds of US$10.2 million to the Company.

The proceeds of the Offering will be used for funding the reservoir testing program at Axe Lake and general corporate purposes.  Specific allocations of the proceeds have not been made at this time.

The shares have been issued pursuant to certain exemptions from the registration requirements under U.S. Securities laws and the prospectus requirements under Canadian Securities laws.

The 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 exploring and developing one of Canada's largest holdings of contiguous oil sands permits and licences, located in Saskatchewan and Alberta, and developing Saskatchewan's first global-scale oil sands discovery. It is leading the establishment of the province of Saskatchewan's emerging oil sands industry.

Forward-looking Information

This news release contains certain “forward-looking information” within the meaning of applicable securities law including statements regarding 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 available 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:

Garth Wong

Chief Financial Officer

Email: ir@oilsandsquest.com

Investor Line: 1-877-718-8941

EX-1