Alberta Oilsands Inc. announces third party valuation of contingent resources and plans two pilot projects towards bitumen production in the Fort McMurray Clearwater property



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

    CALGARY, July 10 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS")
is pleased to announce that Ryder Scott Company Canada, Petroleum Consultants
("Ryder Scott"), an independent petroleum consulting firm, has completed a net
present value (NPV) cash flow evaluation report and memorandum for two
separate potential 10,000 bpd SAGD projects in the AOS Fort McMurray
Clearwater West and Clearwater East project areas. The report with an
effective date of July 1, 2008, estimates the unrisked total before income tax
net present value discounted at 10% (BFIT NPV10) at $750 million: NPV10 at
$386 million for Clearwater West and NPV10 at $363 million for Clearwater
East. This scoping valuation is based on preliminary cost and timing
estimates, provided by a third party engineering firm, along with the
contingent resources assigned to the Clearwater West and East areas as
announced in the Company's news release on July 2, 2008 and at a WTI oil price
of $100 per barrel. There is no certainty that it will be commercially viable
to produce any portion of the resources described in the previous release. The
Company is planning a SAGD pilot in each area to establish bitumen production,
subject to regulatory and stakeholder approvals. AOS has 100% working interest
in these lands.

    Fort McMurray Clearwater West Project

    Excerpts of the valuation results for AOS' Clearwater West potential
10,000 bpd SAGD Project (Secs. 21 & 22 Twp 088 R08W4M) over three price
scenarios are shown below.

    
         Net Present Value of Future Net Revenue (Before Income Tax)
                               Constant Price
    -------------------------------------------------------------------------
    Gross Bitumen   WTI Price  Bitumen Blend       8%      10%      12%
    Volume(MMB)      ($/Bbl)      ($/Bbl)        ($MM)    ($MM)    ($MM)

    91.0               $80        $51.75          464      328      230
    91.0              $100        $58.89          536      386      276
    91.0              $120        $71.16          653      479      351
    -------------------------------------------------------------------------
    Notes: Assumptions include: peak production rate at 10,000 bpd, end of
life decline at 30% until economic limit is reached. Bitumen Blend refers to
realized bitumen price of a marketable mixture of bitumen and diluents
(condensate) that is equivalent to a Lloydminster heavy oil blend. Sustaining
capital cost of $2.50/bbl of bitumen is illustrated above from a range between
$2.00/bbl and $4.00/bbl. The proposed new royalty regime and anticipated
Federal green house gas levy were used.
    

    Scoping engineering design has been completed for SAGD facilities for the
two projects. Clearwater West and East areas are proceeding as separate
project areas with shared facilities. AOS is planning a fall 2008 program in
the Clearwater West area of approximately 8 to 12 core holes, subject to
regulatory approval, to further delineate the areal extent of the thick
bitumen pay and to further confirm the lateral continuity of the high quality
reservoir. The fall 2008 program will also explore for suitable future water
source and water disposal formations.
    The Company is planning 2 to 3 well pair pilot projects, expected to be
in the 1,000 to 2,000 bpd range in the Clearwater West and East areas. A pilot
application is expected to be completed and submitted in 2009. Drilling of the
pilot horizontal wells and construction of pilot facilities will commence upon
approval thereafter, with initial steam injection expected to occur in early
2010. The principal objectives of the SAGD pilot are to validate reservoir
performance and demonstrate operational feasibility to the stakeholders in the
area for a larger development.

    Fort McMurray Clearwater East Project

    Excerpts of the valuation results for Clearwater East potential
10,000 bpd SAGD Project (Secs. 18, 19 & 30 Twp 088 R07W4) follow.

    
         Net Present Value of Future Net Revenue (Before Income Tax)
                               Constant Price
    -------------------------------------------------------------------------
    Gross Bitumen   WTI Price  Bitumen Blend       8%      10%      12%
    Volume(MMB)      ($/Bbl)      ($/Bbl)        ($MM)    ($MM)    ($MM)

    78.2               $80        $51.75          429      307      217
    78.2              $100        $58.89          497      363      262
    78.2              $120        $71.16          609      453      336
    -------------------------------------------------------------------------
    Notes: Assumptions include: peak production rate at 10,000 bpd, end of
life decline at 30% until economic limit is reached. Bitumen Blend refers to
realized bitumen price of a marketable mixture of bitumen and diluents
(condensate) that is equivalent to a Lloydminster heavy oil blend. Sustaining
capital cost of $2.50/bbl of bitumen is illustrated above from a range between
$2.00/bbl and $4.00/bbl. The proposed new royalty regime and anticipated
Federal green house gas levy were used.
    

    AOS' strategy is to drive towards commercial production of bitumen in a
phased implementation manner to maximize current capital efficiency and
provide early cash flow. The Company's strategy is to access strategic joint
venture partners or financing based on the net present value of the projects
and to expand the commercial production of bitumen in substantial increments.
Based on the Ryder Scott contingent resources estimate announced on July 2,
2008 and the current NPV valuation report, the Company believes its 2007/2008
winter drilling program has increased net asset value.

    About Alberta Oilsands Inc.

    Alberta Oilsands Inc. is a technically driven, high growth energy company
focused on creating long term sustainable value through the rapid delineation
of the oil sands resources located on the companies mostly 100% working
interest lands. Alberta Oilsands Inc. has 66.7 million shares outstanding a
fully diluted basis.

    Important Information Regarding the Disclosure of Resources

    There is no certainty that it will be commercially viable for the Company
to produce any portion of the bitumen resources detailed above. The estimated
future net revenues contained in this news release do not necessarily
represent the market value of such resources. The high level of uncertainty
associated with the Company's possible recovery of any of these resources is
the result of various risks and uncertainties including: current uncertainties
around the specific scope and timing of the development of the Company's
Fort-McMurray properties; the ability of the Company to finance any potential
oil sands projects at its Fort-McMurray properties; proposed reliance on
technologies that have not yet been demonstrated to be commercially applicable
in oil sands applications; lack of regulatory approvals; the uncertainty
regarding marketing plans for production from the subject areas; and improved
estimation of project costs. There are a number of inherent risks and
contingencies associated with such development, including commodity price
fluctuations, project costs and those other risks and contingencies discussed
in more detail in the section entitled "Business Risks and Uncertainties" in
the Company's management discussion and analysis for the year ended
December 31, 2007 and in the section entitled "Risk Factors" in the Company's
annual information form dated June 23, 2008.
    "Contingent Resources" are defined as those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from known
accumulations using established technology or technology under development,
but which are not currently considered to be commercial recoverable due to one
or more contingencies. The contingencies which currently prevent the
classification of the contingent resource described above as a reserve are
specific capital costs required to render production economic, applicable
regulatory considerations, pricing, specific supply costs and other relevant
factors described above.
    "Resources" are quantities of petroleum that are estimated to exist
originally in naturally occurring accumulations, including the quantity of
petroleum that is estimated, as of a given date, to be contained in known
accumulations, prior to production, plus those estimated quantities in
accumulations yet to be discovered.
    Resources do not constitute, and should not be confused with, reserves.
No bitumen reserves have been recovered within any of the Company's project
areas, except those contained within core samples, and there is no assurance
that any commercial oil sands projects will be developed.

    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, the
possibility that royalties and other government levies could be increased,
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 management discussion and analysis and
annual information form for the year ended December 31, 2007, all 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.

    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.

    %SEDAR: 00020297E




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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