----

----

| T | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

|   | Colorado                                                       |   | 98-0461154                           |   |
|--------|----------------------------------------------------------------|--------|--------------------------------------|--------|
|   | (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |   |

| Large accelerated filer: T | Accelerated filer: £ | Non-accelerated filer: £               | Smaller reporting company: £ |
|----------------------------|---------------------------|---------------------------------------------|-----------------------------------|
|                       |                      | (Do not check if smaller reporting company) |                              |

----

----

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|   | Item 1. | Financial Statements |
|--------|---------|----------------------|

|   | Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|--------|---------|---------------------------------------------------------------------------------------------|

|   | Item 4. | Controls and Procedures |
|--------|---------|-------------------------|

----

IL

----

| Part I.  Financial Information |                                                                                                                                       |
|------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|
| Forward Looking Statements               |                                                                                                                                       |
| Item 1                                   | Financial Statements                                                                                                                       |   |
|                                     | Unaudited Consolidated Balance Sheets as of July 31, 2008 and April 30, 2008                                                               | 4 |
|                                     | Unaudited Consolidated Statements of Operations for the Three Months Ended July 31, 2008 and 2007                                          | 5 |
|                                     | Unaudited Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the Three Months Ended July 31, 2008 and 2007 | 6 |
|                                     | Unaudited Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2008 and 2007                                          | 7 |
|                                     | Unaudited Notes to Consolidated Financial Statements                                                                                       | 8 |
|                                     |                                                                                                                                       |   |
| Item 2                                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                | 21 |
| Item 4                                   | Controls and Procedures                                                                                                                    | 27 |
|                                     |                                                                                                                                       |   |
| Part II  Other Information     |                                                                                                                                       |
| Item 1 A                                 | Risk Factors                                                                                                                               | 28 |
| Item 2                                   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                | 28 |
| Item 6                                   | Exhibits                                                                                                                                   | 29 |
|                                     | Signatures                                                                                                                                 | 30 |

----

Table of Contents

| · | the amount and nature of future capital, exploration and development expenditures; |
|--------|------------------------------------------------------------------------------------|

| · | the timing of exploration and development activities; |
|--------|-------------------------------------------------------|

| · | business strategies and development of our business plan and exploration programs; and |
|--------|----------------------------------------------------------------------------------------|

| · | potential estimates as to the volume and nature of petroleum deposits that are expected to be found present when lands are developed in a project. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

OI

|                                                                                                                                                                                            | July 31,2008  |   | April 30,2008 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|--------|---------------|--------|
|                                                                                                                                                                                            | (as restated) |   | (as restated) |   |
| ASSETS                                                                                                                                                                                          |          |
| Current Assets:                                                                                                                                                                                 |          |   |          |
| Cash and cash equivalents                                                                                                                                                                       |          | $      | 46,125,459    |   |   | $ | 26,498,038 |   |
| Accounts receivable                                                                                                                                                                             |          |   | 1,025,305     |   |   |   | 3,363,642 |   |
| Short-term investments                                                                                                                                                                          |          |   | 33,391,829    |   |   |   | 19,811,788 |   |
| Prepaid expenses                                                                                                                                                                                |          |   | 925,526       |   |   |   | 562,593 |   |
| Available for sale securities                                                                                                                                                                   |          |   | 297,931       |   |   |   | 390,733 |   |
| Total Current Assets                                                                                                                                                                            |          |   | 81,766,050    |   |   |   | 50,626,794 |   |
|                                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| Property and Equipment (note 4)                                                                                                                                                                 |          |   | 461,028,398   |   |   |   | 459,492,571 |   |
|                                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| Total Assets                                                                                                                                                                                    |          | $      | 542,794,448   |   |   | $ | 510,119,365 |   |
|                                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                      |          |
| Current Liabilities:                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| Accounts payable                                                                                                                                                                                |          | $      | 11,001,637    |   |   | $ | 16,400,508 |   |
| Total Current Liabilities                                                                                                                                                                       |          |   | 11,001,637    |   |   |   | 16,400,508 |   |
|                                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| Deferred Taxes                                                                                                                                                                                  |          |   | 89,129,443    |   |   |   | 93,952,338 |   |
| Asset Retirement Obligation (note 5)                                                                                                                                                            |          |   | 808,166       |   |   |   | - |   |
|                                                                                                                                                                                            |          |   | 100,939,246   |   |   |   | 110,352,846 |   |
|                                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                                                      |          |
| Capital Stock                                                                                                                                                                                   |          |   |          |   |   |   |   |   |
| Preferred stock, par value of $0.001 each, 10,000,000 shares authorized, 1 Series B Preferred share outstanding (note 7)                                                                        |          |   | 1             |   |   |   | 1 |   |
| Common stock, par value of $0.001 each, 500,000,000 shares authorized 228,703,969 and 213,861,958 shares outstanding at July 31, 2008 and April 30, 2008 respectively (notes 6, 7, 8, 9 and 10) |          |   | 228,704       |   |   |   | 213,862 |   |
| Additional Paid-in Capital                                                                                                                                                                      |          |   | 664,675,498   |   |   |   | 602,754,989 |   |
| Deficit Accumulated During Development Stage                                                                                                                                                    |          |   | (254,058,383  | )      |   |   | (239,934,700 | ) |
| Other Comprehensive Income                                                                                                                                                                      |          |   | 31,009,382    |   |   |   | 36,732,367 |   |
| Total Stockholders’ Equity                                                                                                                                                                |          |   | 441,855,202   |   |   |   | 399,766,519 |   |
| Total Liabilities and Stockholders’ Equity                                                                                                                                                |          | $      | 542,794,448   |   |   | $ | 510,119,365 |   |

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Table of Contents

LS

|                                                                         |   | Three Months Ended July 31, |        |   | From Inception on April 3, 1998 through to |   |
|------------------------------------------------------------------------------|--------|-----------------------------|-------------|--------|------------------------------------------------------|--------|
|                                                                         |   | 2008                        |        |   | 2007                                                 |   |   | July 31, 2008 |   |
|                                                                         |   | (as restated)               |        |   | (as restated)                                        |   |   | (as restated) |   |
| Expenditures                                                                 |   |                        |        |   |                                                 |   |   |   |   |
| Exploration costs                                                            |   | $                           | 10,472,742  |   |                                                 | $      | 5,041,518 |   |   | $ | 144,742,682 |   |
| General and administrative                                                   |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Cash consideration                                                           |   |                        | 3,637,706   |   |                                                 |   | 1,716,439 |   |   |   | 32,673,396 |   |
| Stock-based consideration (note 9)                                           |   |                        | 3,569,157   |   |                                                 |   | 1,870,330 |   |   |   | 125,683,856 |   |
| Depreciation and accretion                                                   |   |                        | 317,726     |   |                                                 |   | 236,229 |   |   |   | 1,758,118 |   |
|                                                                         |   |                        | 17,997,331  |   |                                                 |   | 8,864,516 |   |   |   | 304,858,052 |   |
| Other Items                                                                  |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Interest income                                                              |   |                        | (429,278    | )      |                                                 |   | (567,965 | ) |   |   | (4,701,996 | ) |
| Gain on extinguishment of certain liabilities                                |   |                        | -           |   |                                                 |   | - |   |   |   | (936,469 | ) |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                        | 17,568,053  |   |                                                 |   | 8,296,551 |   |   |   | 299,219,587 |   |
| Income tax recovery                                                          |   |                        | (3,444,370  | )      |                                                 |   | (2,985,644 | ) |   |   | (37,466,950 | ) |
|                                                                         |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Net loss before non-controlling shareholder interest                         |   |                        | 14,123,683  |   |                                                 |   | 5,310,907 |   |   |   | 261,752,637 |   |
| Non controlling shareholder interest (note 4)                                |   |                        | -           |   |                                                 |   | - |   |   |   | (7,694,254 | ) |
| Net Loss                                                                     |   | $                           | 14,123,683  |   |                                                 | $      | 5,310,907 |   |   | $ | 254,058,383 |   |
|                                                                         |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Net Loss Per Share                                                           |   | $                           | (0.06       | )      |                                                 | $      | (0.03 | ) |   |   |      |   |
| Weighted Average Number of Common Shares Outstanding                         |   |                        | 252,061,213 |   |                                                 |   | 214,247,525 |   |   |   |   |   |

----

Table of Contents

IL

|                                                                            |   | Common Stock |        |   | Preferred Stock |   |    | Additional Paid in |   |   | Accumulated Other Comprehensive Income |   |   | Deficit Accumulated During the Development |   |   | Total Stockholders’ |   |
|---------------------------------------------------------------------------------|--------|--------------|-------------|--------|-----------------|--------|---------|--------------------|--------|--------|----------------------------------------|--------|--------|-------------------------------------------------|--------|--------|---------------------------|--------|
|                                                                            |   | Shares       |        |   | Par Value       |   |    | Shares             |   |   | Par Value                              |   |   |  Capital                                   |   |   |  (Loss)              |   |   |  Stage |   |   |  Equity |   |
| Balance, April 30, 2008, As Restated                                  |   |         | 213,861,958 |   |            | $      | 213,862 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 602,754,989 |   |   | $ | 36,732,367 |   |   | $ | (239,934,700 | ) |   | $ | 399,766,519 |   |
| Common stock issued for:                                                        |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            | -      |   |                      |   |   |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Cash                                                                            |   |         | 12,976,761  |   |            |   | 12,977  |               |   |   | -                                      |   |   |                                            |   |   |                      |   | 54,489,420 |   |   |   |   |   |   |   |   |   |   |   | 54,502,397 |   |
| Property (note 4 d))                                                            |   |         | 640,000     |   |            |   | 640     |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 3,717,760 |   |   |   | - |   |   |   | - |   |   |   | 3,718,400 |   |
| Stock option exercises                                                          |   |         | 35,000      |   |            |   | 35      |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 165,115 |   |   |   | - |   |   |   | - |   |   |   | 165,150 |   |
| Exchange of Exchangeable Shares                                                 |   |         | 1,190,250   |   |            |   | 1,190   |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (1,190 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock-based compensation expense                                                |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 3,569,157 |   |   |   | - |   |   |   | - |   |   |   | 3,569,157 |   |
| Share issue costs                                                               |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (1,270,248 | ) |   |   | - |   |   |   | - |   |   |   | (1,270,248 | ) |
| Proceeds from exercise of subsidiary options (post organization)                |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 1,250,495 |   |   |   | - |   |   |   | - |   |   |   | 1,250,495 |   |
| Other comprehensive income                                                      |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Transfer of unrealized loss to net loss                                         |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | 141,970 |   |   |   | - |   |   |   | 141,970 |   |
| Exchange loss on translation                                                    |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | (5,864,955 | ) |   |   | - |   |   |   | (5,864,955 | ) |
| Net Loss                                                                        |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | - |   |   |   | (14,123,683 | ) |   |   | (14,123,683 | ) |
| Balance, July 31, 2008, As Restated                                   |   |         | 228,703,969 |   |            | $      | 228,704 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 664,675,498 |   |   | $ | 31,009,382 |   |   | $ | (254,058,383 | ) |   | $ | 441,855,202 |   |
|                                                                            |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, April 30, 2007, As Restated                                  |   |         | 164,624,278 |   |            | $      | 164,624 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 440,527,975 |   |   | $ | 3,365,649 |   |   | $ | (148,903,384 | ) |   | $ | 295,154,865 |   |
| Common stock issued for:                                                        |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                            |   |         | 16,335,716  |   |            |   | 16,336  |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 49,678,027 |   |   |   | - |   |   |   | - |   |   |   | 49,694,363 |   |
| Premium on flow-through shares allocated to liability                           |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (1,493,275 | ) |   |   | - |   |   |   | - |   |   |   | (1,493,275 | ) |
| Exchange of Exchangeable Shares                                                 |   |         | 2,788,569   |   |            |   | 2,789   |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (2,789 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock-based compensation expense                                                |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 1,870,330 |   |   |   | - |   |   |   | - |   |   |   | 1,870,330 |   |
| Share issue costs                                                               |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (2,749,940 | ) |   |   | - |   |   |   | - |   |   |   | (2,749,940 | ) |
| Proceeds from exercise of subsidiary warrants and options (post reorganization) |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 130,829 |   |   |   | - |   |   |   | - |   |   |   | 130,829 |   |
| Other comprehensive income Unrealized gain on available for sale securities     |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | 39,101 |   |   |   | - |   |   |   | 39,101 |   |
| Exchange gain on translation                                                    |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | 14,707,779 |   |   |   | - |   |   |   | 14,707,779 |   |
| Net Loss                                                                        |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | - |   |   |   | (5,310,907 | ) |   |   | (5,310,907 | ) |
| Balance, July 31, 2007, As Restated                                   |   |         | 183,748,563 |   |            | $      | 183,749 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 487,961,157 |   |   | $ | 18,112,529 |   |   | $ | (154,214,291 | ) |   | $ | 352,043,145 |   |

----

Table of Contents

LS

|                                                                             |   | Three Months Ended July 31, |        |   | From Inception on April 3, 1998 Through to |   |
|----------------------------------------------------------------------------------|--------|-----------------------------|-------------|--------|------------------------------------------------------|--------|
|                                                                             |   | 2008                        |        |   | 2007                                                 |   |   | July 31, 2008 |   |
|                                                                             |   | (as restated)               |        |   | (as restated)                                        |   |   | (as restated) |   |
| Operating Activities                                                             |   |                        |        |   |                                                 |   |   |   |   |
| Net loss                                                                         |   | $                           | (14,123,683 | )      |                                                 | $      | (5,310,907 | ) |   | $ | (254,058,383 | ) |
| Non-cash adjustments to net loss                                                 |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Stock-based compensation expense                                                 |   |                        | 3,569,157   |   |                                                 |   | 1,870,330 |   |   |   | 78,836,389 |   |
| Deferred income tax recovery                                                     |   |                        | (3,444,370  | )      |                                                 |   | (2,985,644 | ) |   |   | (36,545,777 | ) |
| Depreciation and accretion                                                       |   |                        | 317,726     |   |                                                 |   | 236,229 |   |   |   | 1,758,118 |   |
| Operating expenses paid with shares                                              |   |                        | -           |   |                                                 |   | - |   |   |   | 11,070,439 |   |
| Flow-through share premium liability                                             |   |                        | -           |   |                                                 |   | - |   |   |   | - |   |
| Non-controlling shareholder interest                                             |   |                        | -           |   |                                                 |   | - |   |   |   | (7,694,254 | ) |
| Non-cash financing expense                                                       |   |                        | -           |   |                                                 |   | - |   |   |   | 36,472,143 |   |
| Gain on extinguishment of certain liabilities                                    |   |                        | -           |   |                                                 |   | - |   |   |   | (936,469 | ) |
| Write off of exploration property                                                |   |                        | -           |   |                                                 |   | - |   |   |   | 856,359 |   |
| Other                                                                            |   |                        | 234,773     |   |                                                 |   | - |   |   |   | 360,993 |   |
| Changes in Non-Cash Working Capital                                              |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Accounts receivable and prepaid expenses                                         |   |                        | 1,843,316   |   |                                                 |   | (524,979 | ) |   |   | (894,622 | ) |
| Accounts payable                                                                 |   |                        | (5,180,826  | )      |                                                 |   | (654,131 | ) |   |   | 12,979,594 |   |
|                                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Cash Used in Operating Activities                                                |   |                        | (16,783,907 | )      |                                                 |   | (7,369,102 | ) |   |   | (157,795,470 | ) |
|                                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Investing Activities                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Capital expenditures                                                             |   |                        | (4,582,176  | )      |                                                 |   | (88,654 | ) |   |   | (76,577,409 | ) |
| Short-term investment                                                            |   |                        | (13,580,041 | )      |                                                 |   | - |   |   |   | (33,391,829 | ) |
| Other investments                                                                |   |                        | -           |   |                                                 |   | - |   |   |   | (664,872 | ) |
| Cash used in Investing Activities                                                |   |                        | (18,162,217 | )      |                                                 |   | (88,654 | ) |   |   | (110,634,110 | ) |
|                                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Financing Activities                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Issuance of shares for cash                                                      |   |                        | 53,397,299  |   |                                                 |   | 46,944,423 |   |   |   | 292,662,099 |   |
| Bank loan                                                                        |   |                        | -           |   |                                                 |   | (21,207,500 | ) |   |   | - |   |
| Shares issued on exercise of subsidiary options and warrants post reorganization |   |                        | 1,250,495   |   |                                                 |   | 130,829 |   |   |   | 3,903,906 |   |
| Shares issued by subsidiary to non-controlling interest                          |   |                        | -           |   |                                                 |   | - |   |   |   | 7,663,666 |   |
| Convertible debentures                                                           |   |                        | -           |   |                                                 |   | - |   |   |   | 8,384,496 |   |
| Cash Provided by Financing Activities                                            |   |                        | 54,647,794  |   |                                                 |   | 25,867,752 |   |   |   | 312,614,167 |   |
|                                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Inflow of Cash                                                                   |   |                        | 19,701,670  |   |                                                 |   | 18,409,996 |   |   |   | 44,184,587 |   |
| Effects of exchange rate changes on cash                                         |   |                        | (74,249     | )      |                                                 |   | 229,799 |   |   |   | 1,940,872 |   |
| Cash and cash equivalents, Beginning of Period                                   |   |                        | 26,498,038  |   |                                                 |   | 32,393,871 |   |   |   | - |   |
| Cash and cash equivalents, End of Period                                         |   | $                           | 46,125,459  |   |                                                 | $      | 51,033,666 |   |   | $ | 46,125,459 |   |
|                                                                             |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Non-Cash Financing Activities                                                    |   |                        |        |   |                                                 |   |   |   |   |   |   |   |
| Common stock issued for properties                                               |   | $                           | 3,718,400   |   |                                                 | $      | - |   |   | $ | 10,848,342 |   |
| Warrants granted on purchase of properties                                       |   | $                           | -           |   |                                                 | $      | - |   |   | $ | 1,763,929 |   |
| Common stock issued for services                                                 |   | $                           | -           |   |                                                 | $      | - |   |   | $ | 10,504,594 |   |
| Common stock issued for debt settlement                                          |   | $                           | -           |   |                                                 | $      | - |   |   | $ | 28,401,029 |   |

----

Table of Contents

LSA

| 1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS |
|----|--------------------------------------------------|

| 2. | RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS |
|----|--------------------------------------------------|

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Table of Contents

| As of July 31, 2008                                                                                                   |   | As previously reported |         |   | Restatement adjustment |   |         | As restated |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------------|--------|------------------------|--------|--------------|-------------|--------|
| ASSETS                                                                                                                |   |                   |         |   |                   |   |         |        |   |
| Current Assets:                                                                                                       |   |                   |         |   |                   |   |         |        |   |
| Cash and cash equivalents                                                                                             |   | $                      | 46,125,459   |   |                   | $      | -            |        |   | $ | 46,125,459 |   |
| Accounts receivable                                                                                                   |   |                   | 1,025,305    |   |                   |   | -            |        |   |   | 1,025,305 |   |
| Short-term investments                                                                                                |   |                   | 33,391,829   |   |                   |   | -            |        |   |   | 33,391,829 |   |
| Prepaid expenses                                                                                                      |   |                   | 925,526      |   |                   |   | -            |        |   |   | 925,526 |   |
| Available for sale securities                                                                                         |   |                   | 297,931      |   |                   |   | -            |        |   |   | 297,931 |   |
| Total Current Assets                                                                                                  |   |                   | 81,766,050   |   |                   |   | -            |        |   |   | 81,766,050 |   |
|                                                                                                                  |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Property and Equipment                                                                                                |   |                   | 595,276,695  |   |                   |   | (134,248,297 | )           |   |   | 461,028,398 |   |
| Total Assets                                                                                                          |   | $                      | 677,042,745  |   |                   | $      | (134,248,297 | )           |   | $ | 542,794,448 |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                            |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Current Liabilities:                                                                                                  |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Accounts payable                                                                                                      |   | $                      | 11,001,637   |   |                   | $      | -            |        |   | $ | 11,001,637 |   |
| Total Current Liabilities                                                                                             |   |                   | 11,001,637   |   |                   |   | -            |        |   |   | 11,001,637 |   |
| Deferred Taxes                                                                                                        |   |                   | 131,644,267  |   |                   |   | (42,514,824  | )           |   |   | 89,129,443 |   |
| Asset Retirement Obligations                                                                                          |   |                   | 808,166      |   |                   |   | -            |        |   |   | 808,166 |   |
|                                                                                                                  |   |                   | 143,454,070  |   |                   |   | (42,514,824  | )           |   |   | 100,939,246 |   |
| STOCKHOLDERS’ EQUITY                                                                                            |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Capital Stock                                                                                                         |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Preferred stock, par value of $0.001 each, 10,000,000 shares authorized 1 Series B Preferred share outstanding        |   |                   | 1            |   |                   |   | -            |        |   |   | 1 |   |
| Common stock, par value of $0.001 each, 500,000,000 shares authorized 228,703,969 shares outstanding at July 31, 2008 |   |                   | 228,704      |   |                   |   | -            |        |   |   | 228,704 |   |
| Additional Paid-in Capital                                                                                            |   |                   | 739,290,518  |   |                   |   | (74,615,020  | )           |   |   | 664,675,498 |   |
| Deficit Accumulated During Development Stage                                                                     |   |                   | (242,679,034 | )      |                   |   | (11,379,349  | )           |   |   | (254,058,383 | ) |
| Other Comprehensive Income (Loss)                                                                                     |   |                   | 36,748,486   |   |                   |   | (5,739,104   | )           |   |   | 31,009,382 |   |
| Total Stockholders’ Equity                                                                                      |   |                   | 533,588,675  |   |                   |   | (91,733,473  | )           |   |   | 441,855,202 |   |
| Total Liabilities and Stockholders’ Equity                                                                      |   | $                      | 677,042,745  |   |                   | $      | (134,248,297 | )           |   | $ | 542,794,448 |   |

| As of April 30, 2008                                                                                                   |   | As previously reported |         |   | Restatement adjustment |   |         | As restated |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------------|--------|------------------------|--------|--------------|-------------|--------|
| ASSETS                                                                                                                 |   |                   |         |   |                   |   |         |        |   |
| Current Assets:                                                                                                        |   |                   |         |   |                   |   |         |        |   |
| Cash and cash equivalents                                                                                              |   | $                      | 26,498,038   |   |                   | $      | -            |        |   | $ | 26,498,038 |   |
| Accounts receivable                                                                                                    |   |                   | 3,363,642    |   |                   |   | -            |        |   |   | 3,363,642 |   |
| Short-term investments                                                                                                 |   |                   | 19,811,788   |   |                   |   | -            |        |   |   | 19,811,788 |   |
| Prepaid expenses                                                                                                       |   |                   | 562,593      |   |                   |   | -            |        |   |   | 562,593 |   |
| Available for sale securities                                                                                          |   |                   | 390,733      |   |                   |   | -            |        |   |   | 390,733 |   |
| Total Current Assets                                                                                                   |   |                   | 50,626,794   |   |                   |   | -            |        |   |   | 50,626,794 |   |
|                                                                                                                   |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Property and Equipment                                                                                                 |   |                   | 595,611,114  |   |                   |   | (136,118,543 | )           |   |   | 459,492,571 |   |
| Total Assets                                                                                                           |   | $                      | 646,237,908  |   |                   | $      | (136,118,543 | )           |   | $ | 510,119,365 |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                             |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Current Liabilities:                                                                                                   |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Accounts payable                                                                                                       |   | $                      | 16,400,508   |   |                   | $      | -            |        |   | $ | 16,400,508 |   |
| Total Current Liabilities                                                                                              |   |                   | 16,400,508   |   |                   |   | -            |        |   |   | 16,400,508 |   |
| Deferred Taxes                                                                                                         |   |                   | 137,577,448  |   |                   |   | (43,625,110  | )           |   |   | 93,952,338 |   |
|                                                                                                                   |   |                   | 153,977,956  |   |                   |   | (43,625,110  | )           |   |   | 110,352,846 |   |
| STOCKHOLDERS’ EQUITY                                                                                             |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Capital Stock                                                                                                          |   |                   |         |   |                   |   |         |        |   |   |   |   |
| Preferred stock, par value of $0.001 each, 10,000,000 shares authorized 1 Series B Preferred share outstanding         |   |                   | 1            |   |                   |   | -            |        |   |   | 1 |   |
| Common stock, par value of $0.001 each, 500,000,000 shares authorized 213,861,958 shares outstanding at April 30, 2008 |   |                   | 213,862      |   |                   |   | -            |        |   |   | 213,862 |   |
| Additional Paid-in Capital                                                                                             |   |                   | 678,774,284  |   |                   |   | (76,019,295  | )           |   |   | 602,754,989 |   |
| Deficit Accumulated During Development Stage                                                                      |   |                   | (230,306,540 | )      |                   |   | (9,628,160   | )           |   |   | (239,934,700 | ) |
| Other Comprehensive Income (Loss)                                                                                      |   |                   | 43,578,345   |   |                   |   | (6,845,978   | )           |   |   | 36,732,367 |   |
| Total Stockholders’ Equity                                                                                       |   |                   | 492,259,952  |   |                   |   | (92,493,433  | )           |   |   | 399,766,519 |   |
| Total Liabilities and Stockholders’ Equity                                                                       |   | $                      | 646,237,908  |   |                   | $      | (136,118,543 | )           |   | $ | 510,119,365 |   |

----

Table of Contents

| Three Months Ended July 31, 2008                                             |   | As previously reported |        |   | Restatement adjustment |   |      | As restated |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|-----------|-------------|--------|
| Expenditures                                                                 |   |                   |        |   |                   |   |      |        |   |
| Exploration costs                                                            |   | $                      | 10,472,742  |   |                   | $      | -         |        |   | $ | 10,472,742 |   |
| General and administrative                                                   |   |                   |        |   |                   |   |      |        |   |   |   |   |
| Cash consideration                                                           |   |                   | 3,682,834   |   |                   |   | (45,128   | )           |   |   | 3,637,706 |   |
| Stock-based consideration                                                    |   |                   | 2,119,754   |   |                   |   | 1,449,403 |        |   |   | 3,569,157 |   |
| Depreciation                                                                 |   |                   | 317,726     |   |                   |   | -         |        |   |   | 317,726 |   |
|                                                                         |   |                   | 16,593,056  |   |                   |   | 1,404,275 |        |   |   | 17,997,331 |   |
| Other Items                                                                  |   |                   |        |   |                   |   |      |        |   |   |   |   |
| Interest income                                                              |   |                   | (429,278    | )      |                   |   | -         |        |   |   | (429,278 | ) |
| Gain on extinguishment of certain liabilities                                |   |                   | -           |   |                   |   | -         |        |   |   | - |   |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                   | 16,163,778  |   |                   |   | 1,404,275 |        |   |   | 17,568,053 |   |
| Income tax recovery                                                          |   |                   | (3,791,283  | )      |                   |   | 346,913   |        |   |   | (3,444,370 | ) |
| Net loss before non-controlling shareholder interest                         |   |                   | 12,372,495  |   |                   |   | 1,751,188 |        |   |   | 14,123,683 |   |
| Non-controlling shareholder interest                                         |   |                   | -           |   |                   |   | -         |        |   |   | - |   |
| Net loss                                                                     |   | $                      | 12,372,495  |   |                   | $      | 1,751,188 |        |   | $ | 14,123,683 |   |
| Net Loss Per Share                                                           |   | $                      | (0.05       | )      |                   |   | -         |        |   | $ | (0.06 | ) |
| Weighted Average Number of Common Shares Outstanding                         |   |                   | 252,061,213 |   |                   |   |      |        |   |   | 252,061,213 |   |

| Three Months Ended July 31, 2007                                             |   | As previously reported |        |   | Restatement adjustment |   |       | As restated |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|------------|-------------|--------|
| Expenditures                                                                 |   |                   |        |   |                   |   |       |        |   |
| Exploration costs                                                            |   | $                      | 5,041,518   |   |                   | $      | -          |        |   | $ | 5,041,518 |   |
| General and administrative                                                   |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Cash consideration                                                           |   |                   | 1,716,439   |   |                   |   | -          |        |   |   | 1,716,439 |   |
| Stock-based consideration                                                    |   |                   | 1,184,207   |   |                   |   | 686,123    |        |   |   | 1,870,330 |   |
| Depreciation                                                                 |   |                   | 236,229     |   |                   |   |       |        |   |   | 236,229 |   |
|                                                                         |   |                   | 8,178,393   |   |                   |   | 686,123    |        |   |   | 8,864,516 |   |
| Other Items                                                                  |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Interest income                                                              |   |                   | (567,965    | )      |                   |   | -          |        |   |   | (567,965 | ) |
| Gain on extinguishment of certain liabilities                                |   |                   | -           |   |                   |   | -          |        |   |   | - |   |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                   | 7,610,428   |   |                   |   | 686,123    |        |   |   | 8,296,551 |   |
| Income tax recovery                                                          |   |                   | (1,419,944  | )      |                   |   | (1,565,700 | )           |   |   | (2,985,644 | ) |
| Net loss before non-controlling shareholder interest                         |   |                   | 6,190,484   |   |                   |   | (879,577   | )           |   |   | 5,310,907 |   |
| Non-controlling shareholder interest                                         |   |                   | -           |   |                   |   | -          |        |   |   | - |   |
| Net loss                                                                     |   | $                      | 6,190,484   |   |                   | $      | (879,577   | )           |   | $ | 5,310,907 |   |
| Net Loss Per Share                                                           |   | $                      | (0.03       | )      |                   |   |       |        |   | $ | (0.02 | ) |
| Weighted Average Number of Common Shares Outstanding                         |   |                   | 215,108,422 |   |                   |   |       |        |   |   | 215,108,422 |   |

----

Table of Contents

| Three Months Ended July 31, 2008                                                 |   | As previously reported |        |   | Restatement adjustment |   |       | As restated |   |
|----------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|------------|-------------|--------|
| Operating Activities                                                             |   |                   |        |   |                   |   |       |        |   |
| Net loss                                                                         |   | $                      | (12,372,495 | )      |                   | $      | (1,751,188 | )           |   | $ | (14,123,683 | ) |
| Non-cash adjustments to net loss                                                 |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Stock-based compensation expense                                                 |   |                   | 2,119,754   |   |                   |   | 1,449,403  |        |   |   | 3,569,157 |   |
| Deferred income tax (recovery)                                                   |   |                   | (3,791,283  | )      |                   |   | 346,913    |        |   |   | (3,444,370 | ) |
| Depreciation                                                                     |   |                   | 317,726     |   |                   |   | -          |        |   |   | 317,726 |   |
| Other                                                                            |   |                   | 234,773     |   |                   |   | -          |        |   |   | 234,773 |   |
| Changes in Non-Cash Working Capital                                              |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Accounts receivable and prepaid expenses                                         |   |                   | 1,843,316   |   |                   |   | -          |        |   |   | 1,843,316 |   |
| Accounts payable                                                                 |   |                   | (5,180,826  | )      |                   |   | -          |        |   |   | (5,180,826 | ) |
| Cash Used in Operating Activities                                                |   |                   | (16,829,035 | )      |                   |   | 45,128     |        |   |   | (16,783,907 | ) |
| Investing Activities                                                             |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Capital expenditures                                                             |   |                   | (4,582,176  | )      |                   |   | -          |        |   |   | (4,582,176 | ) |
| Short-term investment                                                            |   |                   | (13,580,041 | )      |                   |   | -          |        |   |   | (13,580,041 | ) |
| Cash Used in Investing Activities                                                |   |                   | (18,162,217 | )      |                   |   | -          |        |   |   | (18,162,217 | ) |
| Financing Activities                                                             |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Issuance of shares for cash                                                      |   |                   | 53,442,427  |   |                   |   | (45,128    | )           |   |   | 53,397,299 |   |
| Shares issued on exercise of subsidiary options and warrants post reorganization |   |                   | 1,250,495   |   |                   |   | -          |        |   |   | 1,250,495 |   |
| Cash Provided by Financing Activities                                            |   |                   | 54,692,922  |   |                   |   | (45,128    | )           |   |   | 54,647,794 |   |
| Inflow of Cash                                                                   |   |                   | 19,701,670  |   |                   |   | -          |        |   |   | 19,701,670 |   |
| Effects of exchange rate changes on cash                                         |   |                   | (74,249     | )      |                   |   | -          |        |   |   | (74,249 | ) |
| Cash and cash equivalents, Beginning of Period                                   |   |                   | 26,498,038  |   |                   |   | -          |        |   |   | 26,498,038 |   |
| Cash and cash equivalents, End of Period                                         |   | $                      | 46,125,459  |   |                   | $      | -          |        |   | $ | 46,125,459 |   |
| Non-Cash Financing Activities                                                    |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Common stock issued for properties                                               |   | $                      | 3,718,400   |   |                   | $      | -          |        |   | $ | 3,718,400 |   |

----

Table of Contents

| Three Months Ended July 31, 2007                        |   | As previously reported |        |   | Restatement adjustment |   |       | As restated |   |
|---------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|------------|-------------|--------|
| Operating Activities                                    |   |                   |        |   |                   |   |       |        |   |
| Net loss                                                |   | $                      | (6,190,484  | )      |                   | $      | 879,577    |        |   | $ | (5,310,907 | ) |
| Non-cash adjustments to net loss                        |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Stock-based compensation expense                        |   |                   | 1,184,207   |   |                   |   | 686,123    |        |   |   | 1,870,330 |   |
| Deferred income tax recovery                            |   |                   | (1,257,525  | )      |                   |   | (1,565,700 | )           |   |   | (2,823,225 | ) |
| Depreciation                                            |   |                   | 236,229     |   |                   |   | -          |        |   |   | 236,229 |   |
| Flow-through share premium liability                    |   |                   | (162,419    | )      |                   |   | -          |        |   |   | (162,419 | ) |
| Changes in Non-Cash Working Capital                     |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Accounts receivable and prepaid expenses                |   |                   | (524,979    | )      |                   |   | -          |        |   |   | (524,979 | ) |
| Accounts payable                                        |   |                   | (654,131    | )      |                   |   | -          |        |   |   | (654,131 | ) |
| Cash Used in Operating Activities                       |   |                   | (7,369,102  | )      |                   |   | -          |        |   |   | (7,369,102 | ) |
| Investing Activities                                    |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Capital expenditures                                    |   |                   | (88,654     | )      |                   |   | -          |        |   |   | (88,654 | ) |
| Cash Used in Investing Activities                       |   |                   | (88,654     | )      |                   |   | -          |        |   |   | (88,654 | ) |
| Financing Activities                                    |   |                   |        |   |                   |   | -          |        |   |   |   |   |
| Issuance of shares for cash                             |   |                   | 46,944,423  |   |                   |   | -          |        |   |   | 46,944,423 |   |
| Bank loan                                               |   |                   | (21,207,500 | )      |                   |   | -          |        |   |   | (21,207,500 | ) |
| Shares issued by subsidiary to non-controlling interest |   |                   | 130,829     |   |                   |   | -          |        |   |   | 130,829 |   |
| Convertible debentures                                  |   |                   | -           |   |                   |   | -          |        |   |   | - |   |
| Cash Provided by Financing Activities                   |   |                   | 25,867,752  |   |                   |   | -          |        |   |   | 25,867,752 |   |
| Inflow of Cash                                          |   |                   | 18,409,996  |   |                   |   | -          |        |   |   | 18,409,996 |   |
| Effects of exchange rate changes on cash                |   |                   | 229,799     |   |                   |   | -          |        |   |   | 229,799 |   |
| Cash and cash equivalents, Beginning of Period          |   |                   | 32,393,871  |   |                   |   | -          |        |   |   | 32,393,871 |   |
| Cash and cash equivalents, End of Period                |   | $                      | 51,033,666  |   |                   |   | -          |        |   | $ | 51,033,666 |   |

| 3. | BASIS OF PRESENTATION |
|----|-----------------------|

----

Table of Contents

| 4. | PROPERTY AND EQUIPMENT |
|----|------------------------|

|                           |   | July 31, 2008 |        |   | April 30, 2008 |   |
|--------------------------------|--------|---------------|-------------|--------|----------------|--------|
|                           |   | (as restated) |        |   | (as restated)  |   |
| Saskatchewan Oil Sands Rights  |   |          |        |   |           |   |
| Permits                        |   | $             | 398,075,146 |   |           | $      | 403,474,977 |   |
| Licenses                       |   |          | 2,269,849   |   |           |   | 2,306,274 |   |
| Alberta Oil Sands Rights       |   |          |        |   |           |   |   |   |
| Permits                        |   |          | 34,835,772  |   |           |   | 35,394,800 |   |
| Leases                         |   |          | 7,708,494   |   |           |   | 2,426,940 |   |
| Oil Shale Rights (Permits)     |   |          | 10,931,997  |   |           |   | 11,101,908 |   |
| Equipment                      |   |          | 8,992,144   |   |           |   | 6,297,687 |   |
|                           |   |          |        |   |           |   |   |   |
| Less: Accumulated Depreciation |   |          | (1,785,004  | )      |           |   | (1,510,015 | ) |
| Net Book Value                 |   | $             | 461,028,398 |   |           | $      | 459,492,571 |   |

|   | a) | Saskatchewan Oil Sands Permits |
|--------|----|--------------------------------|

|   | b) | Saskatchewan Oil Sands Licenses |
|--------|----|---------------------------------|

----

Table of Contents

|   | b) | Saskatchewan Oil Sands Licenses – (continued) |
|--------|----|-----------------------------------------------------|

|   | c) | Alberta Oil Sands Permits |
|--------|----|---------------------------|

|   | d) | Alberta Oil Sands Lease |
|--------|----|-------------------------|

----

Table of Contents

|   | e) | Oil Shale Rights |
|--------|----|------------------|

|   | f) | During the three months ended July 31, 2008 the Company had $2,814,179 in additions to equipment. |
|--------|----|---------------------------------------------------------------------------------------------------|

----

Table of Contents

| 5. | ASSET RETIREMENT OBLIGATIONS |
|----|------------------------------|

| Continuity of Asset Retirement Obligation     |   |   |    |
|-----------------------------------------------|--------|--------|---------|
| Present value of obligation at April 30, 2008 |   | $      | -       |   |
| Liabilities incurred                          |   |   | 794,267 |   |
| Accretion expense                             |   |   | 13,899  |   |
| Present value of obligation at July 31, 2008  |   | $      | 808,166 |   |

| 6. | SUBSIDIARY OPTIONS OUTSTANDING |
|----|--------------------------------|

|                                                             |   | Number |      |   | Weighted Average Exercise Price (CDN) |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|---------------------------------------|--------|
|                                                             |   |   |      |   |                                  |   |
| Issued and outstanding, April 30, 2008                           |   |   | 1,640,000 |   |                                  | $      | 16.96 |   |
| Exercised and exchanged into shares of OQI common stock (note 7) |   |   | (75,000   | )      |                                  | $      | 16.83 |   |
| Issued and outstanding, July 31, 2008                            |   |   | 1,565,000 |   |                                  | $      | 16.97 |   |

| Exercise Price (CDN) |   | Number Outstanding at July 31, 2008 |      | Number Exercisable at July 31, 2008 |      | Weighted Average Remaining Contractual Life |
|----------------------|--------|-----------------------------------------------|-----------|-----------------------------------------------|-----------|---------------------------------------------|
| $                    | 0.50   |                                          | 75,000    |                                          | 75,000    |                                        | 1.28 years |
| $                    | 3.00   |                                          | 100,000   |                                          | 100,000   |                                        | 2.00 years |
| $                    | 6.00   |                                          | 515,000   |                                          | 515,000   |                                        | 2.53 years |
| $                    | 25.00  |                                          | 825,000   |                                          | 725,000   |                                        | 2.55 years |
| $                    | 50.00  |                                          | 50,000    |                                          | 25,000    |                                        | 3.00 years |
|                 |   |                                          | 1,565 000 |                                          | 1,440,000 |                                        | 2.46 years |

----

Table of Contents

| 7. | PREFERRED SHARES |
|----|------------------|

|                                                 |   | OQI Sask Exchangeable Shares |       |   | OQI Sask Exchangeable Shares issuable on exercise of OQI Sask options |   |       | Total Exchangeable Shares |   |
|------------------------------------------------------|--------|------------------------------|------------|--------|-----------------------------------------------------------------------|--------|------------|---------------------------|--------|
| Balance, April 30, 2008                              |   |                         | 27,952,840 |   |                                                                  |   | 13,497,200 |                      |   |   | 41,450,040 |   |
| OQI Sask options exercised (note 6)                  |   |                         | 617,250    |   |                                                                  |   | (617,250   | )                         |   |   | - |   |
| Exchangeable Shares exchanged into OQI common shares |   |                         | (1,190,250 | )      |                                                                  |   | -          |                      |   |   | (1,190,250 | ) |
|                                                 |   |                         |       |   |                                                                  |   |       |                      |   |   |   |   |
| Balance, July 31, 2008                               |   |                         | 27,379,840 |   |                                                                  |   | 12,879,950 |                      |   |   | 40,259,790 |   |

| 8. | COMMON STOCK |
|----|--------------|

| 9. | STOCK OPTIONS |
|----|---------------|

| Stock option Expiry Date |   | Exercise Price |   | Number of Options |
|--------------------------|--------|----------------|--------|-------------------|
|                     |   |           |   |              |   |
| February 17, 2009        |   | $              | 4.57   |              | 250,000 |
| May 1, 2011              |   | $              | 6.75   |              | 1,000,000 |
| August 14, 2011          |   | $              | 6.75   |              | 1,000,000 |
| May 1, 2012              |   | $              | 6.75   |              | 1,000,000 |
| May 1, 2013              |   | $              | 6.75   |              | 1,000,000 |
| May 18, 2009             |   | $              | 6.00   |              | 30,000 |
| August 23, 2008          |   | $              | 5.05   |              | 50,000 |
| August 23, 2011          |   | $              | 5.05   |              | 2,860,000 |
| October 2, 2011          |   | $              | 3.89   |              | 390,000 |
| December 1, 2011         |   | $              | 5.25   |              | 50,000 |
| June 29, 2012            |   | $              | 2.47   |              | 100,000 |
| August 1, 2012           |   | $              | 4.27   |              | 4,067,000 |
| August 31, 2012          |   | $              | 5.04   |              | 30,000 |
| October 11, 2012         |   | $              | 4.60   |              | 150,000 |
| January 11, 2013         |   | $              | 4.59   |              | 115,000 |
| February 1, 2013         |   | $              | 3.37   |              | 200,000 |
| March 14, 2013           |   | $              | 4.00   |              | 320,000 |
| April 1, 2013            |   | $              | 3.97   |              | 10,000 |
| April 16, 2013           |   | $              | 4.25   |              | 40,000 |
| May 20, 2013             |   | $              | 4.79   |              | 200,000 |
| May 23, 2013             |   | $              | 4.63   |              | 15,000 |
| June 1, 2013             |   | $              | 4.57   |              | 60,000 |
| July 15, 2013            |   | $              | 5.45   |              | 2,000,000 |
|                     |   |           |   |              | 14,937,000 |

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| 715,000   |   | options at $5.05 which vest as to 357,500 in each of 2008 and 2009 on August 23;                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 100,000   |   | options at $3.89 which vest as to 50,000 in each of 2008 and 2009 on October 2;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 12,500    |   | options at $5.25 which vest as to 6,250 in each of 2008 and 2009 on December 1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 50,000    |   | options at $2.47 which vest as to 25,000 in each of 2009 and 2010 on June 29;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3,042,750 |   | options at $4.27 which vest as to 1,014,250 in each of 2008, 2009 and 2010 on August 1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 15,000    |   | options at $5.04 which vest as to 15,000 on August 31, 2008;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 112,500   |   | options at $4.60 which vest as to 37,500 in each of 2008, 2009, and 2010 on October 11;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 86,250    |   | options at $4.59 which vest as to 28,750 in each of 2009, 2010, and 2011 on January 11;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 150,000   |   | options at $3.37 which vest as to 50,000 in each of 2009, 2010, and 2011 on February 1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 240,000   |   | options at $4.00 which vest as to 80,000 in each of 2009, 2010, and 2011 on March 14;                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 7,500     |   | options at $3.97 which vest as to 2,500 in each of 2009, 2010, and 2011 on April 1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 30,000    |   | options at $4.25 which vest as to 5,000 in each of 2009, 2010, and 2011 on April 16;                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 150,000   |   | options at $4.79 which vest as to 50,000 in each of 2009, 2010 and 2011 on May 20;                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 11,250    |   | options at $4.63 which vest as to 3,750 in each of 2009, 2010 and 2011 on May 23;                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 7,500     |   | options at $4.57 which vest as to 2,500 in each of 2009, 2010 and 2011 on June 1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 25,000    |   | options at $4.57 which vest as to 25,000 on June 1, 2009;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 2,000,000 |   | options at $5.45 which vest as to 500,000 on September 16, 2008 and 500,000 in each of 2008, 2009, 2010 and 2011 on July 15;                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 1,655,000 |   | options at $5.05 (1,455,000) and $3.89 (200,000) which vest on or after dates between August 23 and December 1, 2009 as to 413,750 upon achieving a 750 million bitumen in place (“BIP”) barrel count defined as the high resource (P10) estimate of bitumen in place (as determined in accordance with National Instrument 51-101“Standard of Disclosure for Oil and Gas Activities” issued by the securities regulatory authorities in Canada) and 413,750 options thereafter for each 250 million increase in the BIP barrel count. |
| 8,410,250 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|                    |   | Number of Options |       |   | Weighted Average Exercise Price |   |
|-------------------------|--------|-------------------|------------|--------|---------------------------------|--------|
| Balance, April 30, 2008 |   |              | 13,027,000 |   |                            | $      | 5.22 |   |
| Granted                 |   |              | 2,275,000  |   |                            | $      | 5.36 |   |
| Exercised               |   |              | (35,000    | )      |                            | $      | 4.72 |   |
| Expired                 |   |              | (330,000   | )      |                            | $      | 5.84 |   |
| Balance, July 31, 2008  |   |              | 14,937,000 |   |                            | $      | 5.23 |   |

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| Expected life (years)   | 5     |
|-------------------------|-------|
| Risk free interest rate | 3.66% |
| Expected volatility     | 71%   |
| Dividend yield          | 0%    |

| 10. | WARRANTS |
|-----|----------|

| Expiry Date      |   | Exercise Price |   | Number of Warrants |
|------------------|--------|----------------|--------|--------------------|
|             |   |           |   |               |
| December 5, 2009 |   | $ 6.75         |   | 6,325,000          |

|                    |   | Number Of Warrants |      |   | Weighted Average Exercise Price |   |
|-------------------------|--------|--------------------|-----------|--------|---------------------------------|--------|
|                    |   |               |      |   |                            |   |
| Balance, April 30, 2008 |   |               | 6,325,000 |   |                            | $      | 6.75 |   |
| Exercised               |   |               | -         |   |                            |   | - |   |
| Warrants issued         |   |               | -         |   |                            |   | - |   |
| Balance, July 31, 2008  |   |               | 6,325,000 |   |                            | $      | 6.75 |   |

| 11. | FAIR VALUE MEASUREMENTS |
|-----|-------------------------|

|                            |   | As of July 31, 2008 |     |
|---------------------------------|--------|---------------------|----------|
|                            |   |                |     |   |   |   |   | Fair Value Measures Using: |   |
|                            |   | Carrying Amount     |     |   | Total Fair Value |   |   | Quoted Prices In Active Markets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Financial Assets (Liabilities): |   |                |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held for Sale        |   |                | 297,931  |   |   |   | 297,931 |   |   |   | 297,931 |   |   |   | - |   |   |   | - |   |
| Asset Retirement Obligation     |   |                | (808,166 | ) |   |   | (808,166 | ) |   |   | - |   |   |   | - |   |   |   | (808,166 | ) |

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|                            |   | As of April 30, 2008 |    |
|---------------------------------|--------|----------------------|---------|
|                            |   |                 |    |   |   |   |   | Fair Value Measures Using: |   |
|                            |   | Carrying Amount      |    |   | Total Fair Value |   |   | Quoted Prices In Active Markets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Financial Assets (Liabilities): |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held for Sale        |   |                 | 390,733 |   |   |   | 390,733 |   |   |   | 390,733 |   |   |   | - |   |   |   | - |   |
| Asset Retirement Obligation     |   |                 | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |

| 12. | COMPREHENSIVE LOSS |
|-----|--------------------|

|                                                                     |   | Three months ended July 31, |       |
|--------------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                     |   | 2008                        |       |   | 2007 |   |
|                                                                     |   | (as restated)               |       |   | (as restated) |   |
| Net Loss                                                                 |   | $                           | 14,123,683 |   |   | $ | 5,310,907 |   |
| Other comprehensive income                                               |   |                        |       |   |   |   |   |   |
| Unrealized (gain) loss on available for sale securities                  |   |                        | -          |   |   |   | (39,101 | ) |
| Transfer of unrealized loss on available for sale securities to net loss |   |                        | (141,970   | ) |   |   | - |   |
| Foreign exchange (gain) loss on translation                              |   |                        | 5,864,955  |   |   |   | (14,707,779 | ) |
| Total Comprehensive Loss (gain)                                          |   | $                           | 19,846,668 |   |   | $ | (9,435,973 | ) |

| 13. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

| 14. | SUBSEQUENT EVENTS |
|-----|-------------------|

|   | a) | On August 1, 2008, the Board of Directors granted 5,226,000 stock options to directors, officers and employees. The exercise price of the options granted was $4.51 and was based on the closing price of the Company’s stock on the day immediately prior to the grant. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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tem

| ·     | We named our project and prospect areas of interest to more clearly reference and communicate our operations and activities.                                                                                                                                                                                                                                                                                                                                |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·                         | We announced independent third party resource estimates for our Axe Lake Discovery and Raven Ridge Discovery which have been disclosed in our Form 10-K/A.                                                                                                                                                                                                                                                                                                  |
| ·                         | We completed a private placement of 12.98 million shares of common stock at a price of $4.20 per share for total gross proceeds of $54.5 million.                                                                                                                                                                                                                                                                                                           |
| ·                         | We signed an exploration agreement establishing a formal economic relationship with the Northern Village of La Loche in Saskatchewan through which the environmental, social and economic aspects of our exploration activities on the Northern Village of La Loche and certain other local communities will be managed.                                                                                                                                    |
| ·                         | We resumed our field activities following the shut down for spring break-up focusing on the installation and construction of the reservoir test program facilities, drilling of injection and observation wells for the reservoir test program and continued planning for our exploration programs for 2008-2009 as further described below.                                                                                                                |
| ·                         | We reported positive results of advanced laboratory and computer simulation studies by selected industry-leading experts specializing in reservoir structural analysis, petro-physical characteristics and reservoir production simulation testing to support our planned reservoir field test program using steam-based production methods and continuedwith our ongoing laboratory and reservoir simulation activities related to the Axe Lake Discovery. |
| ·                         | We announced the appointment of our President & Chief Operating Officer and other executives as part of our growing management team along with increasing the size of our operations, reservoir and facilities engineering groups and relocating our corporate office in Calgary.                                                                                                                                                                       |

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| 3.1 | Articles of Incorporation, as amended. (1), (2), (3), (4), (5) |
|-----|---------------------------------------------------------------------|

| 3.2 | By laws, as amended. (6)(7) |
|-----|-----------------------------|

| 10.1 | Employment Agreement with Jamey Fitzgibbon.(8) |
|------|------------------------------------------------|

| 31.1 | Certification of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (1) | Incorporated by reference from Form 10-SB, filed October 14, 1999; and Form 8-K, filed November 29, 2004. |
|-----|-----------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference from Form 10-Q/SB dated December 14, 2005. |
|-----|----------------------------------------------------------------------|

| (3) | Incorporated by reference from Form 8-K dated March 13, 2006. |
|-----|---------------------------------------------------------------|

| (4) | Incorporated by reference from Form 8-K dated August 14, 2006. |
|-----|----------------------------------------------------------------|

| (5) | Incorporated by reference herein from Form 10-Q/SB filed December 15, 2006. |
|-----|-----------------------------------------------------------------------------|

| (6) | Incorporated by reference herein from Form 8-K filed July 26, 2007. |
|-----|---------------------------------------------------------------------|

| (7) | Incorporated by reference herein from Form 8-K filed November 23, 2007. |
|-----|-------------------------------------------------------------------------|

| (8) | Incorporated by reference herein from Form 10-Q filed September 9, 2008. |
|-----|--------------------------------------------------------------------------|

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NA

|                           | OILSANDS QUEST INC. |                                                                    |
|--------------------------------|---------------------|-------------------------------------------------------------------------|
|                           |                |                                                                    |   |
|                           |                |                                                                    |   |
| Date:  July 29, 2009 | By:                 | /s/ Christopher H. Hopkins                                              |   |
|                           |                | Christopher H. Hopkins, President, Chief Executive Officer and Director |
|                           |                |                                                                    |   |
|                           |                |                                                                    |   |
| Date:  July 29, 2009 | By:                 | /s/ Garth Wong                                                          |   |
|                           |                | Garth Wong, Chief Financial Officer and Chief Accounting Officer        |

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