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                               OILSANDS QUEST INC.
                           1250, 639 - 5TH AVENUE S.W.
                            CALGARY, ALBERTA T2P 0M9


November ___, 2004


CanwWest Petroleum Corporation
Suite 206 - 475 Howe Street
Vancouver, BC  V6C 2B3

Attention:  Mr. Thornton Donaldson


Dear Sirs:


RE:   OILSANDS QUEST INC.
      RIGHT OF FIRST OFFER
      --------------------

The purpose of this letter  agreement  is to set forth the terms and  conditions
upon which Oilsands Quest Inc. ("OQI" or the "Corporation") is prepared to grant
a right of first  offer  (the  "Right  of First  Offer")  to  CanWest  Petroleum
Corporation ("CanWest").

If the following  represents your  understanding  of our agreement in respect of
such  Right of  First  Offer,  please  acknowledge  same by  signing  below  and
returning  this  letter  agreement  to OQI,  which is  intended  to be, and upon
execution will be, a binding agreement.

The material terms relating to the Right of First Offer are as follows:

1.    RIGHT OF  FIRST  OFFER.  CanWest  shall  have a Right  of  First  Offer to
      purchase all or any part of any Subsequent Financing.

2.    SUBSEQUENT FINANCING.  For purposes hereof,  "Subsequent  Financing" shall
      mean any financing completed by OQI; provided,  however, that a Subsequent
      Financing shall not include:

      (a)   common  shares,  options or other rights to purchase  common  shares
            issued or granted to employees,  officers, directors and consultants
            of OQI pursuant to one or more  employee  stock plans or  agreements
            that have been approved by the shareholders of OQI;

      (b)   securities  issued by OQI pursuant to strategic  partnership,  joint
            venture  or  other   similar   arrangements   approved  by  the  OQI
            shareholders  where the primary purpose of the arrangement is not to
            raise capital; or

      (c)   securities  issued by OQI  pursuant  to an  acquisition  of  another
            corporation  or other  entity by OQI by merger,  purchase  of all or
            substantially   all  of  the  capital  stock  or  assets,  or  other
            reorganization subject to OQI shareholder approval;

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3.    PROCEDURE.  OQI shall provide an initial notice (the "Initial  Notice") to
      CanWest  of the  terms and  conditions  of any such  Subsequent  Financing
      following  the  approval of such  financing  by OQI's Board of  Directors.
      CanWest  shall have fifteen (15)  calendar days to respond in writing with
      its indication to participate in such Subsequent Financing ("Intent").  If
      no response is received  within such  period,  CanWest  shall be deemed to
      have  refused  to  participate  in the  Subsequent  Financing.  If CanWest
      provides its Intent notification,  CanWest shall have another fifteen (15)
      calendar  days (i.e.  30  calendar  days from  Initial  Notice) to provide
      confirmation  of  its  participation  in  the  Subsequent  Financing  (the
      "Confirmation").   If  CanWest  provides  the  Confirmation  notification,
      closing shall occur within an  additional  thirty (30) calendar day period
      (i.e. 60 calendar days from Initial Notice) if the  Confirmation is for an
      amount less than $5 million;  or closing  shall occur within an additional
      sixty (60) calendar day period (i.e. 90 calendar days from Initial Notice)
      if the Confirmation amount is for greater the $5 million ("Closing Date"),
      on the same terms and conditions set forth in the Initial Notice from OQI.
      If any material  terms and  conditions  of the  Subsequent  Financing  are
      changed,  it will be deemed to be a new Subsequent  Financing for purposes
      of this letter agreement  unless otherwise  mutually agreed to and CanWest
      will be provided with  notification  in accordance  with the terms of this
      letter  agreement.  The above closing and notice  periods may be waived or
      extended by mutual consent  obtained in writing.  No commissions  shall be
      payable in connection with CanWest's  exercise of its Right of First Offer
      under any such  Subsequent  Financing to the benefit of CanWest but,  with
      the consent of OQI, certain third party  consideration may be paid. To the
      extent any third party consideration is payable as commissions, it will be
      included in the amount of the Subsequent Financing.

      If CanWest provides its Intent notification,  the Corporation will provide
      CanWest with all such  marketing and investor  related  materials that are
      reasonably requested by CanWest to assist CanWest in raising the necessary
      funds.

4.    CANWEST PARTICIPATION.  For purposes hereof, "CanWest Participation" shall
      mean that CanWest's  participation in any Subsequent Financing will not be
      less than 33?% of the gross proceeds of such Subsequent Financing in order
      to be deemed to have participated in such Subsequent Financing.

5.    RELINQUISHMENT AND ASSIGNMENT.  The Right of First Offer granted hereunder
      shall be relinquished if CanWest  Participation shall have been refused or
      be deemed to have been  refused  in any three (3)  consecutive  Subsequent
      Financings  or if CanWest  fails to provide a minimum of 80% of the amount
      of funding indicated on its Confirmation notification at the Closing Date.
      The  Right of First  Offer is  non-assignable  except  to  affiliates  and
      successors of CanWest.

6.    OQI  RIGHT  TO  TERMINATE   SUBSEQUENT   FINANCING.   Notwithstanding  the
      foregoing,  OQI  may in  its  sole  discretion  terminate  any  Subsequent
      Financing in respect of which OQI has provided  Initial Notice at any time
      prior to having received the Intent notification.  Thereafter, termination
      can only occur upon mutual agreement of both parties.

7.    GRACE PERIOD.  CanWest may request a 10-day  extension of the Closing Date
      provided that CanWest  provides  written  notification  in advance of such
      Closing  Date.  OQI  consent  to such  request  will  not be  unreasonably
      withheld if closing is imminent.

8.    EFFECTIVE DATE. CanWest's Right of First Offer will be effective after the
      completion  of  the  Initial  Financing.  For  purposes  hereof,  "Initial
      Financing"  shall mean the  raising of the capital  required to  undertake
      all, or a portion of the Corporation's first winter's  exploration program
      (budgeted for $5 million) and the payment of the principal  amount of $1.2
      million due on the closing of the purchase of all of the shares of Western
      Canadian Mint Inc. and, indirectly, all of the shares of American Oilsands
      Company  Inc.  from  CanWest  in  accordance  with the terms of the letter
      agreement dated November 12, 2004.

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                                                                               3

9.    CanWest,  acting reasonably,  acknowledges that it will vote its ownership
      interest  in favor of OQI  becoming a publicly  listed  company if, in its
      opinion and,at its sole discretion,  , this will enhance shareholder value
      and liquidity.

This letter agreement shall be governed by the laws of the Province of Alberta.

The parties agree to make, execute and deliver any and all further assurances or
other  documents  or  agreements  necessary to give full force and effect to the
meaning and intent of this letter agreement.

All press releases or other similar public  written  communications  of any sort
relating to this letter agreement and the transactions  contemplated  hereby and
the method of release for publication  thereof,  will be subject to the approval
of all parties hereto, acting reasonably.

If you are in agreement  with  foregoing,  kindly  indicate  your  acceptance by
signing this letter  agreement  where  indicated  below and return a copy to the
undersigned.   This  letter   agreement  may  be  signed  by  facsimile  and  in
counterpart,  which  together  shall be deemed to  constitute  one valid  letter
agreement.


Yours truly,


OILSANDS QUEST INC.


Per:     _________________________


Accepted and agreed to this ____ day of ______________________, 2004.


CANWEST PETROLEUM CORPORATION


Per:     __________________________