Alberta Oilsands Inc. announces increase in previously announced bought deal
financing to $10,350,100

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

CALGARY, Oct. 23 /CNW/ - Alberta Oilsands Inc. ("AOS" or the "Company") (AOS - TSXV) is pleased to announce that it has reached an agreement with the syndicate of underwriters led by Canaccord Capital Corporation and including Scotia Capital Inc., Genuity Capital Markets, Raymond James Ltd. and Octagon Capital Corporation (the "Underwriters"), in respect of its bought deal announced on October 21, 2009 to issue, on a bought deal basis, an additional 4,000,000 units. Under the amended terms of the financing, AOS has agreed to issue 12,778,000 common shares on a flow-through basis and 11,500,000 units for aggregate gross proceeds to AOS of $10,350,100, subject to the receipt by AOS of all necessary regulatory approvals.

The terms of the previously announced over-allotment option have not been amended. Closing of the offering is expected to occur on or about November 17, 2009.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-looking statements: This press release contains forward looking statements. More particularly, this press release contains statements concerning the anticipated closing date of the offering and the anticipated use of the net proceeds of the offering. Although AOS believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because AOS can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the offering could be delayed if AOS is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the offering by AOS might change if the board of directors of AOS determines that it would be in the best interests of AOS to deploy the proceeds for some other purpose.

The forward looking statements contained in this press release are made as of the date hereof and AOS undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

    
    Neither the TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.
    

SOURCE ALBERTA OILSANDS INC.

For further information: 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

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ALBERTA OILSANDS INC.

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