Oilsands Quest Inc. has received approval from the Alberta Court of Queen's Bench for the sale of the Company's non-core Eagles Nest asset to Cavalier Energy Inc., an unrelated third party, for CDN$7.005 million.

As previously announced, Oilsands Quest reopened the sale process for its Eagles Nest asset as FAMA Capital Ltd. defaulted on an earlier Purchase and Sale Agreement. The Company has signed a new Purchase and Sale Agreement with Cavalier and the transaction, subject to normal closing conditions, is expected to close on or before March 23, 2012.

Oilsands Quest continues to operate under the protection of the Companies' Creditors Arrangement Act (Canada) ("CCAA") with the assistance of a Court-appointed monitor. The Company's common shares remain halted from trading until either a delisting occurs or until the NYSE permits the resumption of trading.

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