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


November ___, 2004


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

Attention:  Mr. Thornton Donaldson

Dear Sirs:

RE:   OILSANDS QUEST INC.
      MINIMUM INITIAL INVESTMENT
      --------------------------

Reference is made to the current reorganization of Oilsands Quest Inc. ("OQI" or
the  "Corporation")  including,  without  limitation,  the reconstitution of the
board of directors,  the appointment of new officers,  the issuance of shares to
management of the  Corporation  and the Initial  Financing (as defined below) of
the  Corporation.   In  that  regard,  the  Corporation  and  CanWest  Petroleum
Corporation  ("CanWest")  have  come  to an  understanding  in  respect  of such
reorganization.  If the following represents your understanding of our agreement
in respect of such terms and conditions,  please acknowledge the 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 this letter agreement are as follows:

1.    OWNERSHIP  INTEREST.  OQI  undertakes  to ensure that  CanWest  retains an
      ownership  interest in OQI of greater than 50%  immediately  following the
      completion of the Initial Financing.  For greater certainty, OQI covenants
      that it will not issue that number of voting  securities under the Initial
      Financing  that would result in CanWest's  ownership  interest  being less
      than  50% of OQI.  For  purposes  hereof,  the  calculation  of  CanWest's
      ownership  interest will be  determined  based on the number of issued and
      outstanding  voting  securities  of OQI held by CanWest as a percentage of
      the total number of issued and outstanding  voting  securities of OQI on a
      fully  diluted  basis  excluding any  securities  convertible  into voting
      securites of OQI and stock options granted by OQI.

2.    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 (budget  approximately $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.

<PAGE>

                                                                               2


3.    DIRECTORS   OPTIONS.   OQI   undertakes   to  ensure  that  prior  to  the
      implementation  of a stock  option plan,  the  Corporation  will,  subject
      appropriate  regulatory or other necessary board  approvals,  undertake to
      grant  each  external  director  options  to  purchase  up to a maximum of
      100,000 common shares at a price of $0.50 per share.  The options  granted
      will not vest for a period of 12 months from date of issuance.

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.

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:     __________________________