Operations Update: Alberta Oilsands Inc. expands drilling program and increases oil sands lands to 85 sections (54,400 acres)


    /NOT FOR DISTRIBUTION TO THE U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION
    TO THE U.S./

    CALGARY, Aug. 1 /CNW/ - Alberta Oilsands Inc. ("AOS" or "the Company")
(TSXV:AOS) has added an additional drilling program to commence in late Q4
2007. The Company is now planning two drilling programs of up to 40 wells over
two large oil sands land blocks.
    AOS has acquired an additional 62 sections of oil sands leases since it
announced the initial acquisition of 23 section oil sands land on March 26,
2007. The additional oil sands leases increases AOS's land base to a total of
85 sections (54,400 acres), all at 100% working interest. All of the sections
are located in the regional Hangingstone area. The sections were acquired over
the past four months at Crown land sales.
    The first drilling program will be on the 23 section "AOS Hangingstone
Prospect" parcel with up to 30 wells, at a minimum drill density of one well
per section. Ryder Scott Petroleum Consultants ("Ryder Scott"), an independent
petroleum consulting firm has confirmed undiscovered resource of 1.15 billion
barrels of bitumen in place (May 17, 2007 news release). This block is located
approximately 22 kilometers southwest of Fort McMurray. The parcel is within
three kilometers of the highway which provides good access to the lands. This
land block is surrounded by a number of SAGD (steam-assisted gravity drainage)
projects, which are in various stages of development, all within a 3 to
10 kilometer radius. These SAGD projects include: Petro-Canada's Hangingstone
Meadow Creek projects, Japan Canada Oilsands Company Ltd. (JACOS) Hangingstone
project and Value Creation Inc.'s (VCI) Halfway Creek project. In addition to
the drilling program, an 80 km 2D seismic data acquisition program is being
permitted.
    The second drilling program will begin to delineate the other prospect
covering 47 sections. A 2D seismic acquisition program is being planned by the
company for this area. The Company has secured services to ensure that
delineation activities will start in Q4 2007. AOS has engaged Ryder Scott
Petroleum Consultants ("Ryder Scott") to evaluate the possible bitumen
resources attributable to the recently acquired sections. The results will be
announced as they become available.

    Alberta Oilsands Inc. is a technically driven high growth junior oilsands
company focused on creating long term sustainable value through the rapid
delineation of the oil sands resources located on the company's 100% working
interest lands.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy and accuracy of this release.

    Not for dissemination in the United States of America. This news release
shall not constitute an offer to sell or the solicitation of any offer to buy
securities of the Company in any jurisdiction, including the United States.
The common shares of the Company have not been and will not be registered
under the United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and have not been and will not
be offered or sold in the United States or to any U.S. person except in
certain transactions exempt from the registration requirements of the U.S.
Securities Act and applicable state securities laws.

    Forward-Looking Statements: This press release contains certain
"forward-looking statements" within the meaning of such statements under
applicable securities law including management's assessment of the Company's
properties, production and prospects. Forward-looking statements are
frequently characterized by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate", "may", "will", "potential",
"proposed" and other similar words, or statements that certain events or
conditions "may" or "will" occur. These statements are only predictions.
    Forward-looking statements are based on the opinions and estimates of
management at the date the statements are made, and are subject to a variety
of risks and uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the forward-looking
statements. These factors include the inherent risks involved in the
exploration and development of oil sands properties, the uncertainties
involved in interpreting drilling results and other geological data,
fluctuating oil prices, the possibility of project cost overruns or
unanticipated costs and expenses, uncertainties relating to the availability
and costs of financing needed in the future and other factors including
unforeseen delays. As an oil sands focused enterprise, the Company faces
risks, including those associated with exploration, development, approvals and
the ability to access sufficient capital from external sources. Anticipated
exploration and development plans relating to the Company's properties are
subject to change. For a detailed description of the risks and uncertainties
facing the Company and its business and affairs, readers should refer to the
Company's annual financial statements and management discussion and analysis
for the year ended December 31, 2006, both of which are available at
www.sedar.com. The Company undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions should
change, unless required by law. The reader is cautioned not to place undue
reliance on forward-looking statements.

    %SEDAR: 00020297E



For further information: Alberta Oilsands Inc., Suite 2800, 350 - 7th
Avenue S.W., Calgary, Alberta, T2P 3N9, Shabir Premji, Executive Chairman, T:
(403) 232-3341, F: (403) 263-6702, spremji@aboilsands.ca; or Chad Dust,
Executive Vice President Finance and Business Development, T: (403) 538-3191,
F: (403) 263-6702, cdust@aboilsands.ca; Company website: www.aboilsands.ca