Nov. 29 (Bloomberg) -- Oilsands Quest Inc. filed for protection from creditors under Canadian law after an unidentified buyer backed out of an agreement to acquire some of its assets.

The court granted protection under Canada’s Companies’ Creditors Arrangement Act until Dec. 21 to allow the company to reorganize its financial affairs while continuing operations, Calgary-based Oilsands Quest said in a statement today.

The company said in July that it wouldn’t be able to continue operating beyond January if it failed to find a financial partner to develop a $1 billion oil-sands project in Canada. The unnamed partner that had agreed to buy the company’s Wallace Creek assets backed out of the deal yesterday, Oilsands Quest said today.

Oilsands Quest’s properties in western Canada may produce 100,000 barrels of bitumen a day, the company said July 6. The company had hired TD Securities Inc. to help find a partner to fund the projects.

--Editors: Tina Davis, Jasmina Kelemen

To contact the reporter on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net