Alberta Oilsands Inc. Announces Third Quarter Results and Operations Update



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

    CALGARY, Nov. 28 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS")
(TSXV: AOS) is pleased to announce the financial highlights of the three and
nine month periods ended September 30, 2007.

    
    Highlights

    -   The Company added another 55 sections (35,200 acres) of 100% working
        interest leases during the third quarter, thereby increasing the
        Company's aggregate oil sands lease holdings at the end of the second
        quarter at 125 sections (80,000 acres). A 73% increase in land
        holdings from Q2 - 2007.

    -   The Ryder Scott report issued in October 2007 confirmed 201 million
        barrels of contingent (recoverable) resource from 4 sections at Fort
        McMurray.

    -   In October 2007, the company secured a $5.0 million credit facility
        from a Canadian Financial Institution which remains un-drawn.

    -   The Company maintains a strong balance sheet with $13.1 million in
        cash and access to $5.0 million credit line enabling a fully funded
        capital program for 2008.

    -   The Company continued to strengthen its leadership team with
        management and corporate appointments.
    

    Oil Sands Operations:

    The Company acquired land throughout the third quarter and now owns
125 sections (80,000 acres) oil sand leases at 100% WI. The Company has
initiated delineation and project plans on the 28 section Fort McMurray main
oil sands fairway parcel. The asset is 24 km long in an east-west orientation
and is located south east of Fort McMurray, Alberta. Work planning and
consultation on the asset have confirmed access to the most prospective
portions of the lands. The Company expects 20 of the 28 sections will be
accessible for drilling. The Company does not anticipate drilling on the
remaining 8 sections in the 2007/2008 program. Core holes locations for the
initial 2008 winter program will be on 10 sections primarily on the eastern
portions of the lands. Core holes in the Fort McMurray area are currently
budgeted to be $210,000 per vertical well and those in East Hangingstone at
$306,000 per vertical well.

    
    The Company has commenced and confirms its 12 month 2007/2008 capital
budget. The use of funds is as follows:

    2007 Q4      - $1.2 million for 55.65km of 2D seismic

    2008 Q1      - $8.8 million for 35 core holes at Ft. McMurray and
                   Hangingstone.

    2008 Q2      - $0.5 Environmental Impact Assessment for both areas

    2008 Q3      - $6.5 million on 31 core holes in Ft. McMurray
    

    The Company's $17.0 million capital budget is fully funded from a
combination of cash on hand, cash flow and debt.

    Conventional Operations:

    During the third quarter of 2007, the Company's production averaged
74 boe per day (see "BOE Presentation" below). The Company's conventional
assets are legacy assets that are primarily contributing cash flow towards its
general and administrative expenses. In October, the Company drilled a
(0.8 net) central Alberta legacy commitment well targeting the Ostracod zone.
The well was cased as a potential gas well. Completion is scheduled for
December 2007. Area tests on analogous zones have yielded flows of 2.2 million
cubic feet per day.

    Third Quarter Operating Highlights

    The following table outlines certain highlights of our financial and
operating results for the three months and nine months ended September 30,
2007:

    
                                     Three months            Nine months
                                    ended Sept. 30          ended Sept. 30
                              -----------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Petroleum and natural
     gas sales                   507,374   1,557,261   2,505,385   4,170,425
    Funds from (used in)
     operations                 (231,667)    639,789    (330,152)  1,587,767
    Loss for the period       (1,688,739)   (273,508) (1,751,857)   (466,631)
    Capital expenditures       7,658,343   1,005,688  15,540,349   3,768,565


                                     Three months            Nine months
                                    ended Sept. 30          ended Sept. 30
                              -----------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Oil and NGL (bbls/day)            66         230         132         215
    Natural gas (mcf/day)             49          96          45         101
    boe(1)/day                        74         246         140         232


                                     Three months            Nine months
                                    ended Sept. 30          ended Sept. 30
                              -----------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Commodity Prices
    Oil and NGL ($/bbl)            76.82       71.54       66.73       68.13
    Natural gas ($/mcf)             5.96        4.94        6.75        6.02
    $/boe(1)                       74.92       68.82       65.78       65.81

    (1) See "BOE Presentation" below.
    


    Outlook

    The Company's 2007/2008 winter drilling program will focus on the Fort
McMurray and East Hangingstone areas.
    In the third quarter, the Company acquired trade seismic on the 23
sections of oil sands leases in Hangingstone East. The interpretation of this
data has revealed several prospective anomalies on the lands. The Company will
acquire 56 kilometres of 2D seismic in the late fourth quarter of 2007. This
data will assist in finalizing drilling locations for the 2007/2008
delineation program. The delineation program in Hangingstone East will
encompass 15 core holes.
    The 28 sections Fort McMurray area leases are located south east of Fort
McMurray. This asset has very attractive well penetrations on the land
indicating 22 to 53 meters of bitumen pay. Therefore, the Company will
intensify its drilling in this core asset. A certain portion of this asset
also has year round accessibility. The Company plans to drill 20 core holes
this coming winter and another 31 core holes in the third quarter of 2008.
    The Company has 2 drilling rigs under contract for 165 drill days
commencing late December 2007. In addition, the core analysis has also been
contracted and results from the winter drilling program will be released as
they become available.
    Shabir Premji, Executive Chairman of Alberta Oilsands Inc., commenting on
third quarter activities noted that the Company has been able to rapidly
acquire very prospective oil sands leases due to the technical experience of
its management team. The Company remains highly focused on executing a program
of concentrated delineation drilling on the most prospective areas followed by
an application for commercial development.
    The Company will file its third quarter management's discussion and
analysis and interim unaudited consolidated financial statements and notes
thereto as at and for the three months ended September 30, 2007 in accordance
with National Instrument 51-102 - Continuous Disclosure Obligations adopted by
the Canadian securities regulatory authorities. Additional information about
the Company, including the audited consolidated financial statements and notes
thereto and management's discussion and analysis as at and for the year ended
December 31, 2006, are available on the Company's SEDAR profile at
www.sedar.com.

    BOE Presentation - Production information is commonly reported in units
of barrel of oil equivalent ("boe"). For purposes of computing such units,
natural gas is converted to equivalent barrels of oil using a conversion
factor of six thousand cubic feet to one barrel of oil. This conversion ratio
of 6:1 is based on an energy equivalent wellhead value for the individual
products. Such disclosure of boes may be misleading, particularly if used in
isolation. Readers should be aware that historical results are not necessarily
indicative of future performance.

    Undiscovered Resource - In accordance with the Canadian Standards set out
in the Canadian Oil and Gas Evaluation Handbook (COGEH) and National
Instrument 51-101 (NI 51-101) and per the Canadian Securities Administrators
(CSA) Staff Notice 51-321, "Undiscovered Resources" are those quantities of
oil and gas estimated on a given date to be contained in accumulations yet to
be discovered. There is no certainty that any portion of the undiscovered
resources will be discovered and that, if discovered, it may not be
economically viable or technically feasible to produce. "Discovered Resources"
are those quantities of oil and gas estimated on a given date to be remaining
in, plus those quantities already produced from, known accumulations.
Discovered resources are divided into economic and uneconomic categories, with
the estimated future recoverable portion classified as reserves and contingent
resources, respectively. There is no certainty that any portion of the
discovered resources will be economically viable or technically feasible to
produce. "Contingent Resources" are those quantities of oil and gas estimated
on a given date to potentially recoverable from known accumulations, but are
not currently economic.

    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", "continue", "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.

    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, T: (403) 538-3191, cdust@aboilsands.ca; Company
website: www.aboilsands.ca.

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ALBERTA OILSANDS INC.

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