Document:

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

November 12, 2004

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

Attention:  Mr. Thornton Donaldson

Dear Sirs:

RE:   OILSANDS  QUEST  INC.  OFFER TO  PURCHASE  ALL OF THE  SHARES  OF  WESTERN
      CANADIAN MINT INC. AND, INDIRECTLY, ALL OF THE SHARES OF AMERICAN OILSANDS
      COMPANY INC. FROM CANWEST PETROLEUM CORPORATION
      --------------------------------------------------------------------------

The purpose of this letter agreement is to set forth the terms and conditions
upon which Oilsands Quest Inc. (the "Purchaser") is prepared to purchase all of
the issued and outstanding shares (the "Shares") of Western Canadian Mint Inc.
("WCM"), a company that owns all of the shares of American Oilsands Company Inc.
("AOC"), which shares are all owned by CanWest Petroleum Corporation (the
"Vendor").

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

Unless  otherwise  noted all  figures  used herein are  denominated  in Canadian
dollars.

The material terms relating to the acquisition of the Shares are as follows:

1.    It is  acknowledged  that the Vendor has entered  into a Purchase and Sale
      Agreement  dated November 8, 2004 (the "Initial  Acquisition  Agreement"),
      pursuant to which the Vendor will acquire all of the Shares.

2.    The closing of the  acquisition  of the Shares  contemplated  hereby shall
      occur  immediately  following  the  Vendor's  acquisition  of  the  Shares
      pursuant to the Initial  Acquisition  Agreement and any amendments thereto
      that have been mutually agreed upon by all parties.  In the event that the
      Initial  Acquisition  Agreement is terminated  for any reason  whatsoever,
      this letter agreement shall immediately terminate.

3.    The Shares shall be purchased by the Purchaser for aggregate consideration
      in the amount of $1,500,000 (the "Purchase Price").

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                                                                               2

4.    The Purchase  Price payable to the Vendor will be satisfied by (i) cash in
      the amount of $1,200,000, and (ii) the issuance of a convertible debenture
      in the amount of  $300,000  (the  "Debenture").  The cash  amount  will be
      payable to the Vendor  consistent  with the  payment  terms of the Initial
      Acquisition Agreement or any amendments thereto.

5.    The material terms and conditions of the Debenture will be as follows:

      (a)   the Debenture shall bear interest at a rate of 3% per annum;

      (b)   the Debenture shall mature four years from the date of issuance (the
            "Maturity Date");

      (c)   the Debenture  may be converted  into common shares of the Purchaser
            at a rate of $1.30 per share at any time and from time to time while
            the Debenture is outstanding; and

      (d)   the principal  amount and any accrued  interest shall not be due and
            payable  until the Maturity  Date,  provided  that the Purchaser may
            prepay the entire  principal  amount (no  partial  amounts)  and any
            accrued  interest,  at any time  following  26  months  from date of
            issue, without penalty.  Should the Purchaser elect to prepay all of
            the principal  amount,  the Purchaser will provide the Vendor with a
            10 business day payment  notice  ("Conversion  Notice").  During the
            period of the Conversion  Notice, the Vendor shall have the right to
            convert any portion or all of the outstanding  Debenture into common
            shares of the Purchaser according to the terms of the Debenture. Any
            accrued  interest  may  also be  converted  at a rate  equal  to the
            subscription   price  per  common  share  of  the  Purchaser's  last
            completed private equity or private equity based financing.

6.    At the closing of the acquisition of the Shares contemplated  hereby, each
      party  shall  deliver an  officer's  certificate  to the other party which
      shall provide for those  representations  and warranties that are usual in
      cases where shares of a company are being acquired. For greater certainty,
      such  representations  and warranties  shall be similar in nature to those
      representations  and  warranties  contained  in  the  Initial  Acquisition
      Agreement.

7.    The  Purchaser's  obligation  to  complete  the  purchase  of  the  Shares
      described  herein,  shall be conditional upon a number of conditions which
      shall be for the sole benefit of the Purchaser and shall include,  without
      limitation, the following:

      (a)   each party shall deliver an officer  certificate as  contemplated by
            paragraph 6 hereof;

      (b)   the  Purchaser  has an  opportunity  to inspect all of the books and
            records  of WCM and AOC and be  satisfied,  at its sole  discretion,
            with the results of such investigations;

      (c)   at closing there shall have been no material  adverse  change in the
            business, affairs, or financial status of WCM or AOC or its business
            or assets;

      (d)   the  parties  shall  have  obtained  all  necessary   corporate  and
            regulatory  approvals to the entering into and  consummation  of the
            transactions contemplated hereby;

      (e)   the Purchaser shall have completed its initial financing in order to
            raise the  necessary  capital to make the  payment  contemplated  by
            paragraph 4 hereof; and

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                                                                               3

      (f)   the board of directors of the  Purchaser  shall have  approved  this
            letter agreement and the transactions contemplated hereby.

8.    The Vendor and the Purchaser  shall be responsible  for their own fees and
      expenses associated with this transaction including,  without restriction,
      their legal fees.

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

10.   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.

11.   All press releases or other similar public written  communications  of any
      sort relating to this letter  agreement and the business of Oilsands Quest
      Inc. and  transactions  contemplated  hereby and the method of release for
      publication  thereof,  will be  subject  to the  approval  of all  parties
      hereto.  Such approval will be provided within 48 hours of notification by
      either party, unless required otherwise under law and approval will not to
      be unreasonably withheld by all parties hereto.

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:     __________________________[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.

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                                                                               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:     __________________________

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