----

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

----

----

----

OILSANDS 

| Part I.  Financial Information |   |
|------------------------------------------|--------|
| Forward-Looking Statements               |   |
| Item 1.                                  |   | Financial Statements |   |
|                                     |   | Unaudited Consolidated Balance Sheets as of July 31, 2009 and April 30, 2009 | 4 |
|                                     |   | Unaudited Consolidated Statements of Operations for the Three Months Ended July 31, 2009 and 2008 and for the Period from Inception on April 3, 1998 to July 31, 2009 | 5 |
|                                     |   | Unaudited Consolidated Statements of Stockholders’ Equity for the Three Months Ended July 31, 2009 and 2008 | 6 |
|                                     |   | Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended July 31, 2009 and 2008 and for the Period from Inception on April 3, 1998 to July 31, 2009 | 7 |
|                                     |   | Unaudited Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2009 and 2008 and for the Period from Inception on April 3, 1998 to July 31, 2009 | 8 |
|                                     |   | Unaudited Notes to Consolidated Financial Statements | 9 |
|                                     |   |   |   |
| Item 2.                                  |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
|                                     |   |   |   |
| Item 3.                                  |   | Quantitative and Qualitative Disclosures About Market Risk | 20 |
|                                     |   |   |   |
| Item 4.                                  |   | Controls and Procedures | 20 |
|                                     |   |   |   |
| Part II  Other Information     |   |
|                                     |   |   |   |
| Item 1.                                  |   | Legal Proceedings | 21 |
|                                     |   |   |   |
| Item 1A.                                 |   | Risk Factors | 21 |
|                                     |   |   |   |
| Item 2.                                  |   | Unregistered Sales of Equity Securities and Use of Proceeds | 21 |
|                                     |   |   |   |
| Item 3.                                  |   | Defaults Upon Senior Securities | 21 |
|                                     |   |   |   |
| Item 4.                                  |   | Submission of Matters to a Vote of Security Holders | 21 |
|                                     |   |   |   |
| Item 5.                                  |   | Other Information | 21 |
|                                     |   |   |   |
| Item 6.                                  |   | Exhibits | 21 |
|                                     |   | Signatures | 22 |

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

|   | — | the timing of exploration activities; |
|--------|---------|---------------------------------------|

|   | — | business strategies and development of our business plan and drilling programs; and |
|--------|---------|-------------------------------------------------------------------------------------|

|   | — | potential reservoir recovery optimization processes. |
|--------|---------|------------------------------------------------------|

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Table of Contents 

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Table of Contents 

OILSANDS 

|                                                                                                                                                                                     | July 31, 2009 |   | April 30,2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|--------|---------------|--------|
|                                                                                                                                                                                     |          |   |          |   |
| ASSETS                                                                                                                                                                                   |          |
| Current Assets:                                                                                                                                                                          |          |   |
| Cash and cash equivalents                                                                                                                                                                |          | $      | 44,000,040    |   |   | $ | 6,986,099 |   |
| Accounts receivable                                                                                                                                                                      |          |   | 302,859       |   |   |   | 3,616,793 |   |
| Short-term investments                                                                                                                                                                   |          |   | 12,140,871    |   |   |   | 25,208,748 |   |
| Prepaid expenses                                                                                                                                                                         |          |   | 707,332       |   |   |   | 337,099 |   |
| Available for sale equity securities                                                                                                                                                     |          |   | 50,053        |   |   |   | 60,307 |   |
| Total Current Assets                                                                                                                                                                     |          |   | 57,201,155    |   |   |   | 36,209,046 |   |
|                                                                                                                                                                                     |          |   |          |   |   |   |   |   |
| Property and Equipment (note 3)                                                                                                                                                          |          |   | 440,973,219   |   |   |   | 398,975,468 |   |
|                                                                                                                                                                                     |          |   |          |   |   |   |   |   |
| Total Assets                                                                                                                                                                             |          | $      | 498,174,374   |   |   | $ | 435,184,514 |   |
|                                                                                                                                                                                     |          |   |          |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                               |          |
| Current Liabilities:                                                                                                                                                                     |          |   |          |   |   |   |   |   |
| Accounts payable (note 11)                                                                                                                                                               |          | $      | 908,721       |   |   | $ | 3,463,642 |   |
| Accrued liabilities                                                                                                                                                                      |          |   | 5,296,268     |   |   |   | 5,603,779 |   |
| Flow-through share premium liability                                                                                                                                                     |          |   | 721,004       |   |   |   | 749,287 |   |
| Total Current Liabilities                                                                                                                                                                |          |   | 6,925,993     |   |   |   | 9,816,708 |   |
|                                                                                                                                                                                     |          |   |          |   |   |   |   |   |
| Deferred Taxes                                                                                                                                                                           |          |   | 70,644,375    |   |   |   | 65,651,035 |   |
| Asset Retirement Obligation (note 4)                                                                                                                                                     |          |   | 2,951,596     |   |   |   | 2,621,439 |   |
|                                                                                                                                                                                     |          |   |          |   |   |   |   |   |
| Stockholders’ Equity                                                                                                                                                               |          |
| Capital Stock                                                                                                                                                                            |          |   |          |   |   |   |   |   |
| Preferred Stock, par value of $0.001 each, 10,000,000 shares authorized, 1 Series B Preferred share outstanding (note 6)                                                                 |          |   | 1             |   |   |   | 1 |   |
| Common Stock, par value of $0.001 each, 750,000,000 shares authorized 276,654,511 and 241,559,549 shares outstanding at July 31, 2009 and April 30, 2009 respectively (notes 7, 8 and 9) |          |   | 276,654       |   |   |   | 241,559 |   |
| Additional Paid-in Capital                                                                                                                                                               |          |   | 738,410,922   |   |   |   | 711,774,364 |   |
| Deficit Accumulated During Development Stage                                                                                                                                             |          |   | (330,808,181  | )      |   |   | (328,899,880 | ) |
| Accumulated Other Comprehensive Income (Loss)                                                                                                                                            |          |   | 9,773,014     |   |   |   | (26,020,712 | ) |
| Total Stockholders’ Equity                                                                                                                                                         |          |   | 417,652,410   |   |   |   | 357,095,332 |   |
| Total Liabilities and Stockholders’ Equity                                                                                                                                         |          | $      | 498,174,374   |   |   | $ | 435,184,514 |   |

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Table of Contents 

OILSANDS 

|                                                        |   | Three Months EndedJuly 31, |        |   | From Inception on April 3, 1998 through to |   |
|-------------------------------------------------------------|--------|----------------------------|-------------|--------|------------------------------------------------------|--------|
|                                                        |   | 2009                       |        |   | 2008                                                 |   |   | July 31, 2009 |   |
|                                                        |   |                       |        |   |                                                 |   |   |   |   |
| Expenses                                                    |   |                       |        |   |                                                 |   |   |   |   |
| Exploration costs                                           |   | $                          | 3,614,359   |   |                                                 | $      | 10,472,742 |   |   | $ | 209,871,368 |   |
| General and administrative                                  |   |                       |        |   |                                                 |   |   |   |   |   |   |   |
| Corporate                                                   |   |                       | 3,798,450   |   |                                                 |   | 2,855,016 |   |   |   | 44,830,625 |   |
| Stock-based compensation (note 8)                           |   |                       | (1,152,931) |   |                                                 |   | 3,569,157 |   |   |   | 138,273,661 |   |
| Foreign exchange (gain) loss                                |   |                       | (3,243,691) |   |                                                 |   | 782,690 |   |   |   | 1,296,231 |   |
| Depreciation and accretion                                  |   |                       | 448,416     |   |                                                 |   | 317,726 |   |   |   | 3,452,735 |   |
|                                                        |   |                       | 3,464,603   |   |                                                 |   | 17,997,331 |   |   |   | 397,724,620 |   |
| Other Items                                                 |   |                       |        |   |                                                 |   |   |   |   |   |   |   |
| Interest and other income                                   |   |                       | (58,764)    |   |                                                 |   | (429,278 | ) |   |   | (6,357,434) |   |
| Loss before deferred  income tax benefit          |   |                       | 3,405,839   |   |                                                 |   | 17,568,053 |   |   |   | 391,367,186 |   |
| Deferred income tax benefit                                 |   |                       | (1,497,538) |   |                                                 |   | (3,444,370 | ) |   |   | (52,864,751) |   |
|                                                        |   |                       |        |   |                                                 |   |   |   |   |   |   |   |
| Net loss                                                    |   |                       | 1,908,301   |   |                                                 |   | 14,123,683 |   |   |   | 338,502,435 |   |
| Net loss attributable to noncontrolling  interest |   |                       | -           |   |                                                 |   | - |   |   |   | (7,694,254) |   |
| Net loss attributable to common stockholders                |   | $                          | 1,908,301   |   |                                                 | $      | 14,123,683 |   |   | $ | 330,808,181 |   |
|                                                        |   |                       |        |   |                                                 |   |   |   |   |   |   |   |
| Net loss attributable to common stockholders per share      |   | $                          | (0.01)      |   |                                                 | $      | (0.06 | ) |   |   |      |   |
| Weighted average number of common stock outstanding         |   |                       | 297,811,710 |   |                                                 |   | 252,061,213 |   |   |   |   |   |

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Table of Contents 

OILSANDS 

|                                                         |   | 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, 2009                            |   |         | 241,559,549 |   |            | $      | 241,559 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 711,774,364 |   |   | $ | (26,020,712 | ) |   |   | (328,899,880 | ) |   | $ | 357,095,332 |   |
| Common stock and warrants issued for:                        |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                         |   |         | 35,075,000  |   |            |   | 35,075  |               |   |   | -                                      |   |   |                                            |   |   |                      |   | 29,778,675 |   |   |   | - |   |   |   | - |   |   |   | 29,813,750 |   |
| Stock option exercises                                       |   |         | 19,962      |   |            |   | 20      |               |   |   | -                                      |   |   |                                            |   |   |                      |   | 16,149 |   |   |   | - |   |   |   | - |   |   |   | 16,169 |   |
| Stock-based compensation                                     |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            |   |   |                      |   | (1,152,931 | ) |   |   | - |   |   |   | - |   |   |   | (1,152,931 | ) |
| Share issue costs                                            |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            |   |   |                      |   | (2,005,335 | ) |   |   | - |   |   |   | - |   |   |   | (2,005,335 | ) |
| Other comprehensive income                                   |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign exchange gain on translation                         |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            |   |   |                      |   | - |   |   |   | 35,793,726 |   |   |   | - |   |   |   | 35,793,726 |   |
| Net loss                                                     |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            |   |   |                      |   | - |   |   |   | - |   |   |   | (1,908,301 | ) |   |   | (1,908,301 | ) |
| Balance, July 31, 2009                             |   |         | 276,654,511 |   |            | $      | 276,654 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 738,410,922 |   |   | $ | 9,773,014 |   |   | $ | (330,808,181 | ) |   | $ | 417,652,410 |   |
|                                                         |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, April 30, 2008                            |   |         | 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                                                     |   |         | 640,000     |   |            |   | 640     |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 3,717,760 |   |   |   | - |   |   |   | - |   |   |   | 3,718,400 |   |
| Stock option exercises                                       |   |         | 35,000      |   |            |   | 35      |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 165,115 |   |   |   | - |   |   |   | - |   |   |   | 165,150 |   |
| Exchange of OQI Sask Exchangeable Shares                     |   |         | 1,190,250   |   |            |   | 1,190   |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (1,190 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock-based compensation                                     |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 3,569,157 |   |   |   | - |   |   |   | - |   |   |   | 3,569,157 |   |
| Share issue costs                                            |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | (1,270,248 | ) |   |   | - |   |   |   | - |   |   |   | (1,270,248 | ) |
| OQI Sask options exercises                                   |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | 1,250,495 |   |   |   | - |   |   |   | - |   |   |   | 1,250,495 |   |
| Other comprehensive income                                   |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                            |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transfer of unrealized loss on available for sale securities |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | 141,970 |   |   |   | - |   |   |   | 141,970 |   |
| Foreign exchange loss on translation                         |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | (5,864,955 | ) |   |   | - |   |   |   | (5,864,955 | ) |
| Net loss                                                     |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                            | -      |   |                      |   | - |   |   |   | - |   |   |   | (14,123,683 | ) |   |   | (14,123,683 | ) |
| Balance, July 31, 2008                             |   |         | 228,703,969 |   |            | $      | 228,704 |               |   |   | 1                                      |   |   | $                                               | 1      |   |                      | $      | 664,675,498 |   |   | $ | 31,009,382 |   |   | $ | (254,058,383 | ) |   | $ | 441,855,202 |   |

----

Table of Contents 

OILSANDS 

|                                                            |   | Three Months EndedJuly 31, |        |   | From Inception on April 3, 1998 through to |   |
|-----------------------------------------------------------------|--------|----------------------------|-------------|--------|--------------------------------------------|--------|
|                                                            |   | 2009                       |        |   | 2008                                       |   |   | July 31, 2009 |   |
|                                                            |   |                       |        |   |                                       |   |   |   |   |
| Net loss                                                        |   | $                          | (1,908,301) |   |                                       | $      | (14,123,683) |   |   | $ | (338,502,435) |   |
| Unrealized loss on available for sale securities                |   |                       | -           |   |                                       |   | - |   |   |   | (167,631) |   |
| Transfer of unrealized loss on available for sale securities    |   |                       | -           |   |                                       |   | 141,970 |   |   |   | 167,631 |   |
| Foreign exchange gain  (loss) on translation          |   |                       | 35,793,726  |   |                                       |   | (5,864,955) |   |   |   | 9,773,014 |   |
| Comprehensive income (loss)                                     |   | $                          | 33,885,425  |   |                                       | $      | (19,846,668) |   |   | $ | (328,729,421) |   |
| Comprehensive loss attributable to noncontrolling interest      |   |                       | -           |   |                                       |   | - |   |   |   | 7,694,254 |   |
| Comprehensive income (loss) attributable to common stockholders |   | $                          | 33,885,425  |   |                                       | $      | (19,846,668) |   |   | $ | (321,035,167) |   |

----

Table of Contents 

OILSANDS 

|                                                          |   | Three Months EndedJuly 31, |    |   | From Inception onApril 3, 1998through to |   |
|---------------------------------------------------------------|--------|----------------------------|--------------|--------|----------------------------------------------------|--------|
|                                                          |   | 2009                       |         |   | 2008                                               |   |   | July 31, 2009 |   |
|                                                          |   |                       |         |   |                                               |   |   |   |   |
| Operating Activities                                          |   |                       |         |   |                                               |   |   |   |   |
| Net loss                                                      |   | $                          | (1,908,301)  |   |                                               | $      | (14,123,683) |   |   | $ | (338,502,435) |   |
| Non-cash adjustments to net loss                              |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Stock-based compensation                                      |   |                       | (1,152,931)  |   |                                               |   | 3,569,157 |   |   |   | 138,273,661 |   |
| Deferred income tax benefit                                   |   |                       | (1,497,538)  |   |                                               |   | (3,444,370) |   |   |   | (52,864,751) |   |
| Depreciation and accretion                                    |   |                       | 448,416      |   |                                               |   | 317,726 |   |   |   | 3,452,735 |   |
| Asset retirement cost expense                                 |   |                       | -            |   |                                               |   | - |   |   |   | 1,067,715 |   |
| Other non-cash items                                          |   |                       | 10,255       |   |                                               |   | 234,773 |   |   |   | 1,249,538 |   |
| Changes in Non-Cash Working Capital                           |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Accounts receivable and prepaid expenses                      |   |                       | 3,157,979    |   |                                               |   | 1,843,316 |   |   |   | (186,361) |   |
| Accounts payable and accrued liabilities                      |   |                       | (3,453,587)  |   |                                               |   | (5,180,826) |   |   |   | 9,953,632 |   |
| Cash Used in Operating Activities                             |   |                       | (4,395,707)  |   |                                               |   | (16,783,907) |   |   |   | (237,556,266) |   |
|                                                          |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Investing Activities                                          |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Property and equipment expenditures                           |   |                       | (440,425)    |   |                                               |   | (4,582,176) |   |   |   | (79,854,030) |   |
| Short-term investment                                         |   |                       | 13,067,877   |   |                                               |   | (13,580,041) |   |   |   | (12,140,871) |   |
| Other investments                                             |   |                       | -            |   |                                               |   | - |   |   |   | (548,048) |   |
| Cash Used in Investing Activities                             |   |                       | 12,627,452   |   |                                               |   | (18,162,217) |   |   |   | (92,542,949) |   |
|                                                          |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Financing Activities                                          |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Issuance of shares for cash                                   |   |                       | 27,824,584   |   |                                               |   | 53,397,299 |   |   |   | 355,385,992 |   |
| Shares issued on exercise of OQI Sask options and warrants    |   |                       | -            |   |                                               |   | 1,250,495 |   |   |   | 4,176,336 |   |
| Shares issued by OQI Sask to non-controlling interests        |   |                       | -            |   |                                               |   | - |   |   |   | 7,663,666 |   |
| Convertible debentures                                        |   |                       | -            |   |                                               |   | - |   |   |   | 8,384,496 |   |
| Cash Provided by Financing Activities                         |   |                       | 27,824,584   |   |                                               |   | 54,647,794 |   |   |   | 375,610,490 |   |
|                                                          |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Inflow of Cash and Cash Equivalents                           |   |                       | 36,056,329   |   |                                               |   | 19,701,670 |   |   |   | 45,511,275 |   |
| Effects of exchange rate changes on cash and cash equivalents |   |                       | 957,612      |   |                                               |   | (74,249) |   |   |   | (1,511,235) |   |
| Cash and Cash Equivalents, Beginning of Period                |   |                       | 6,986,099    |   |                                               |   | 26,498,038 |   |   |   | - |   |
| Cash and Cash Equivalents, End of Period                      |   | $                          | 44,000,040   |   |                                               | $      | 46,125,459 |   |   | $ | 44,000,040 |   |
|                                                          |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Non-Cash Financing Activities                                 |   |                       |         |   |                                               |   |   |   |   |   |   |   |
| Common stock issued for properties                            |   | $                          | -            |   |                                               | $      | 3,718,400 |   |   | $ | 10,848,342 |   |
| Warrants issued for properties                           |   | $                          | -            |   |                                               | $      | - |   |   | $ | 1,763,929 |   |
| Common stock issued for services                              |   | $                          | -            |   |                                               | $      | - |   |   | $ | 10,504,594 |   |
| Common stock issued for debt settlement                       |   | $                          | -            |   |                                               | $      | - |   |   | $ | 28,401,029 |   |

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Table of Contents 

OILSANDS 

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

| 2. | BASIS OF PRESENTATION |
|----|-----------------------|

----

Table of Contents 

|   | 1. | The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. |
|--------|----|---------------------------------------------------------------------------------------------------------------------|

----

Table of Contents 

| 3. | PROPERTY AND EQUIPMENT |
|----|------------------------|

|                                    |   | July 31, 2009 |        |   | April 30, 2009 |   |
|-----------------------------------------|--------|---------------|-------------|--------|----------------|--------|
| Saskatchewan Oil Sands Rights           |   |          |        |   |           |   |
| Permits                                 |   | $             | 378,135,145 |   |           | $      | 341,921,978 |   |
| Licenses                                |   |          | 2,157,724   |   |           |   | 1,949,903 |   |
| Alberta Oil Sands Rights                |   |          |        |   |           |   |   |   |
| Permits                                 |   |          | 33,246,871  |   |           |   | 30,044,702 |   |
| Leases                                  |   |          | 7,327,918   |   |           |   | 6,622,130 |   |
| Saskatchewan Oil Shale Rights (Permits) |   |          | 10,408,978  |   |           |   | 9,439,575 |   |
| Equipment                               |   |          | 13,015,929  |   |           |   | 11,635,999 |   |
|                                    |   |          |        |   |           |   |   |   |
| Less: Accumulated Depreciation          |   |          | (3,319,346) |   |           |   | (2,638,819) |   |
| Net Book Value                          |   | $             | 440,973,219 |   |           | $      | 398,975,468 |   |

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

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

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

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

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|   | e) | Saskatchewan Oil Shale Permits |
|--------|----|--------------------------------|

| 4. | ASSET RETIREMENT OBLIGATIONS |
|----|------------------------------|

| Continuity of Asset Retirement Obligation     |   |   |      |
|-----------------------------------------------|--------|--------|-----------|
| Present value of obligation at April 30, 2009 |   | $      | 2,621,439 |   |
| Liabilities incurred                          |   |   | -         |   |
| Liabilities settled                           |   |   | -         |   |
| Accretion expense                             |   |   | 48,320    |   |
| Foreign currency translation adjustment       |   |   | 281,837   |   |
| Present value of obligation at July 31, 2009  |   | $      | 2,951,596 |   |

| 5. | OQI SASK STOCK OPTIONS |
|----|------------------------|

|                                                             |   | Number |      |   | Weighted Average Exercise Price (CDN) |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|---------------------------------------|--------|
|                                                             |   |   |      |   |                                  |   |
| Issued and outstanding, April 30, 2009                           |   |   | 1,421,667 |   |                                  | $      | 16.82 |   |
| Exercised and exchanged into shares of OQI common stock (note 6) |   |   | -         |   |                                  | $      | - |   |
| Issued and outstanding, July 31, 2009                            |   |   | 1,421,667 |   |                                  | $      | 16.82 |   |

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| Exercise Price (CDN) |   |   | NumberOutstanding atJuly 31, 2009 |   |      | Number Exercisable at July 31, 2009 |   | Weighted Average Remaining Contractual Life |  Weighted Average Grant-Date Fair Value (CDN) |   Aggregate Intrinsic Value at July 31, 2009 (CDN) |
|----------------------|--------|--------|-----------------------------------|--------|-----------|-------------------------------------|--------|---------------------------------------------|----------------------------------------------------|--------------------------------------------------------------|
| $                    | 0.50   |   |                              |   | 75,000    |                                |   |                                        | 75,000                                             |                                                         | 0.28 years | $0.09 | $528,611 |
| $                    | 3.00   |   |                              |   | 100,000   |                                |   |                                        | 100,000                                            |                                                         | 1.00 years | $0.54 | $454,814 |
| $                    | 6.00   |   |                              |   | 465,000   |                                |   |                                        | 465,000                                            |                                                         | 1.50 years | $28.30 | $719,814 |
| $                    | 25.00  |   |                              |   | 731,667   |                                |   |                                        | 731,667                                            |                                                         | 1.75 years | $26.06 | - |
| $                    | 50.00  |   |                              |   | 50,000    |                                |   |                                        | 37,500                                             |                                                         | 2.00 years | $32.00 | - |
|                 |   |   |                              |   | 1,421,667 |                                |   |                                        | 1,409,167                                          |                                                         | 1.55 years |   | $1,703,239  |

| 6. | PREFERRED SHARES |
|----|------------------|

|                                                 |   | OQI Sask Exchangeable Shares |       |   | OQI Sask Exchangeable Shares issuable on exercise of OQI Sask options |   |       | Total ExchangeableShares |   |
|------------------------------------------------------|--------|------------------------------|------------|--------|-----------------------------------------------------------------------|--------|------------|--------------------------|--------|
| Balance, April 30, 2009                              |   |                         | 25,743,916 |   |                                                                  |   | 11,700,319 |                     |   |   | 37,444,235 |   |
| OQI Sask options exercised (note 5)                  |   |                         | -          |   |                                                                  |   | -          |                     |   |   | - |   |
| Exchangeable Shares exchanged into OQI common shares |   |                         | -          |   |                                                                  |   | -          |                     |   |   | - |   |
|                                                 |   |                         |       |   |                                                                  |   |       |                     |   |   |   |   |
| Balance, July 31, 2009                               |   |                         | 25,743,916 |   |                                                                  |   | 11,700,319 |                     |   |   | 37,444,235 |   |

| 7. | COMMON STOCK |
|----|--------------|

| 8. | STOCK OPTIONS |
|----|---------------|

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|                          |   | Options |       |   | Weighted-AverageExercise Price |   |   | Weighted-AverageGrant-DateFair Value |   |   | Aggregate IntrinsicValue |   |
|-------------------------------|--------|---------|------------|--------|--------------------------------|--------|--------|--------------------------------------|--------|--------|--------------------------|--------|
| Outstanding at April 30, 2009 |   |    | 24,579,144 |   |                           |   | 4.14   |                                 |   |   | 3.13                |   |   |   |   |   |
| Granted                       |   |    | -          |   |                           |   |   |                                 |   |   |                     |   |   |   |   |   |
| Exercised                     |   |    | (19,962    | )      |                           |   | 0.81   |                                 |   |   |                     |   |   | $ | 8,584 |   |
| Forfeited                     |   |    | (2,861,182 | )      |                           |   | 4.16   |                                 |   |   | 2.68                     |   |   |   |   |   |
| Expired                       |   |    | (30,000)   |   |                           |   | 6.00   |                                 |   |   | 3.51                     |   |   |   |   |   |
| Outstanding at July 31, 2009  |   |    | 21,668,000 |   |                           | $      | 4.13   |                                 |   | $      | 3.20                     |   |   |   |   |   |
| Exercisable at July 31, 2009  |   |    | 10,783,644 |   |                           | $      | 4.72   |                                 |   | $      | 3.91                     |   |   | $ | 80,400 |   |

| 9. | WARRANTS |
|----|----------|

|                    |   | Number Of Warrants |       |   | Weighted Average Exercise Price |   |
|-------------------------|--------|--------------------|------------|--------|---------------------------------|--------|
|                    |   |               |       |   |                            |   |
| Balance, April 30, 2009 |   |               | 6,325,000  |   |                            | $      | 6.75 |   |
| Exercised               |   |               | -          |   |                            |   | - |   |
| Warrants issued         |   |               | 17,537,500 |   |                            |   | 1.10 |   |
| Balance, July 31, 2009  |   |               | 23,862,500 |   |                            | $      | 2.60 |   |

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| 10. | FAIR VALUE MEASUREMENTS |
|-----|-------------------------|

|                     |   | As of July 31, 2009 |       |
|--------------------------|--------|---------------------|------------|
|                     |   |                |       |   |   |   |   | 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:        |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held for Sale |   |                | 50,053     |   |   |   | 50,053 |   |   |   | 50,053 |   |   |   | - |   |   |   | - |   |
| Short Term Investments   |   |                | 12,140,871 |   |   |   | 12,140,871 |   |   |   | 12,140,871 |   |   |   | - |   |   |   | - |   |

|                     |   | As of April 30, 2009 |       |
|--------------------------|--------|----------------------|------------|
|                     |   |                 |       |   |   |   |   | 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:        |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held for Sale |   |                 | 60,307     |   |   |   | 60,307 |   |   |   | 60,307 |   |   |   | - |   |   |   | - |   |
| Short Term Investments   |   |                 | 25,208,748 |   |   |   | 25,208,748 |   |   |   | 25,208,748 |   |   |   | - |   |   |   | - |   |

| 11. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

| 12. | SUBSEQUENT EVENTS |
|-----|-------------------|

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Item 

| · | We completed a public offering of 35,075,000 units at a price of $0.85 per unit for gross proceeds to $29.8 million.  The units consisted of one common share and a warrant to purchase one-half common share. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We were granted a one year extension, to May 31, 2010, of our permits in northwest Saskatchewan.  We may seek and be granted two additional one year extensions of each permit if the Company continues to meet its obligations under the terms of the permits.  We may elect to convert all or a portion of the permits to leases. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We signed a Memorandum of Understanding establishing an economic relationship with the Birch Narrows Dene Nation in Saskatchewan through which the economic benefits of our exploration and development activities will be managed. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We announced independent third party resource estimates for our Eagles Nest property in Northern Alberta. |
|--------|-----------------------------------------------------------------------------------------------------------|

| · | We announced the resignation of Jamey Fitzgibbon as President and Chief Operating Officer and the transition of these responsibilities to Christopher Hopkins, the Company's Chief Executive Officer. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We resumed construction activities at Test Site 1 in preparation for the startup of Phase One of the testing. |
|--------|---------------------------------------------------------------------------------------------------------------|

| · | We began applying heat to the reservoir at Test Site 3 in late 2008 utilizing a downhole electric heater and we continue to measure pressures and temperatures at ten different locations in the reservoir subsequent to the removal of the heater element in June 2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We have commenced pressure and temperature measurements at Test Site 1 in order to capture the baseline reservoir pressure and temperature before commencing the vertical well test program. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We provided an update of our progress at Test Sites 1 and 3 and laboratory and field test studies at the TD Newcrest Unconventional Oil Forum held in Calgary on July 8, 2009 and at the Canadian International Petroleum Conference held in Calgary on June 16 to 18, 2009. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We disclosed our intention to re-organize our non-core assets at Pasquia Hills. |
|--------|---------------------------------------------------------------------------------|

| · | We restated our financial statements and filed an amended Form 10-K/A for the year ended April 30, 2008 and amended Form 10-Qs for the quarterly periods ended July 31, 2008, October 31, 2008 and January 31, 2009. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | We expect to submit an application to perforate the two closely spaced vertical wells at Test Site 3 and circulate water at different temperatures in order to (1) confirm the establishment of early fluid movement, (2) confirm the ability for early stage convective heat transfer at the bottom of the reservoir, (3) produce and collect samplesof bitumen through both hot water and solvent injection, and (4) gather preliminary data on the horizontal displacement process. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We expect to submit an application to proceed with the Phase One test program at Test Site 1 to inject water and steam in order to (1) demonstrate the feasibility of establishing and maintaining staged communication at the base of the Axe Lake reservoir (2) evaluate reservoir behavior in relation to water and steam injection including geo-mechanical effects, and (3) calibrate the Axe Lake relative permeability curvesfor use in our reservoir simulators.   Four vertical wells for micro-seismic monitoring will be drilled and completed and a baseline will be established prior to commencement of vertical well operations.  The interpretation of micro-seismic signals is expected to enable more effective history matching of the horizontal fluid flow and convective heat transfer.  This phase is scheduled to begin in October, subject to regulatory and other approvals. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In preparation for Phase Two of the testing program at Test Site 1, we expect to drill and complete observation wells and design, construct and commission the necessary surface facilities at the site.  Water and steam injection into horizontal wells drilled is planned to begin following the completion of the surface facilities associated with the horizontal test holes.  This work will commenceafter the testing and analysis from Phase One is complete. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We may begin field activities related to Test Site 2, where we are evaluating the testing of other energy efficient and environmentally neutral recovery processes. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We are planning a program to evaluate the characteristics of the overburden at Axe Lake in late 2009.  The program, in combination with our extensive 3-D seismic data, is expected to enhance our understanding of the formation overlaying our bitumen deposit. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We expect to continue our reservoir characterization studies and continue to evaluate well data, perform petrophysical analyses, design and execute pertinent geophysical logging and perform advanced laboratory studies. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We expect to submit an application for a pilot project at Axe Lake in the fall of 2009.  The pilot project application will be partly based on a low pressure steam based bitumen recovery process currently being tested as part of the reservoir test program and the application will trigger an Environmental Impact Assessment. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We are continuing the planning of additional exploration programs to further define the location, extent and quality of the potential bitumen resource in Axe Lake, Raven Ridge, Wallace Creek, Eagles Nest, and adjacent areas as appropriate. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Infrastructure remains a critical element for continued operations and we will continue to investigate various pipe line solutions for gas and liquids transport, different routing alternatives for permanent road access and possible solutions for the provision of power. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Efforts are also continuing on converting a portion of our Saskatchewan permits to lease pursuant to the Oil Shale Regulations, 1964, as amended. The permits will not be converted to leases until a development plan which will require an Environmental Impact Assessment has been developed. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We intend to maintain our asset base and core technical team in order to advance to commercial development of our resource. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

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PART 

Item 

Item 

Item 

Item 

Item 

ITEM 

| 1.1  | Agency Agreement dated April 30, 20091 |
|-----------|----------------------------------------|

| 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. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURES

|                               | OILSANDS QUEST INC. |
|------------------------------------|---------------------|
|                               |                |   |
|                               |                |   |
| Date:  September 9, 2009 | By:                 | /s/ Christopher H. Hopkins  |
|                               |                | Christopher H. Hopkins, President, Chief Executive Officer and Director |
|                               |                |   |
|                               |                |   |
| Date:  September 9, 2009 | By:                 | /s/ Garth Wong  |
|                               |                | Garth Wong, Chief Financial Officer and Chief Accounting Officer |

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