Alberta Oilsands Inc. announces winter capital program

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

CALGARY, Dec. 10 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS") announces that its board of directors has approved a $7.0 million winter capital program for the remainder of 2009 and the first quarter of 2010. The program will consist of both conventional drilling in Northwest Alberta and Northeast British Columbia, and certain oil sands coring expenditures in the Ft. McMurray region of Alberta.

AOS currently has two drilling rigs operating in the Peace River Arch area of Alberta and Wildmint, BC. AOS plans to drill 4 to 5 conventional wells in an exploration program targeting large gas reserves, with associated liquids, and light oil primarily in Slave Point carbonates and in shallower formations. AOS has earned a 50% working interest on 11 sections of land in this area through an existing farm-in on the property which is located between the Lady Fern field and the Hamburg Slave Point gas field. The Company plans to follow up on its successful first quarter 2009 Slave Point discovery at 13-29, by drilling a second similar Slave Point anomaly, as defined by 3D seismic, located several miles to the South.

Immediately across the British Columbia border, at Wildmint, AOS is drilling a further Slave Point exploration well where the Company intends to earn 7.5 sections through an existing farm-in on a structural horst block which the Company expects to be analogous to the Buick Creek Slave Point pool which has cumulative production of 32 BCF (billion cubic feet)(1) to date. AOS has access to a further 17 sections of land, on the Peace River Arch, at Hines Creek, through a separate farm-in. Additional exploratory locations and/or contingent locations are likely but will depend on successful drilling results of the initial wells.

On December 3, 2009, AOS received an Oilsands Exploration Permit (OSE) from Alberta Sustainable Resource Development (SRD) for its winter oil sands coring program. Immediately after freeze-up AOS expects to commence this program which is anticipated to begin with a multi-well core hole drilling program on the Company's Hangingstone oil sands leases. Up to 10 core holes are planned at the Company's 50% working interest Hangingstone (Halfway Creek) acreage; the Company's joint venture partner in the area will be the operator of this program which will target bitumen in the McMurray formation. Additionally, a 6 to 8 well coring program has been budgeted for the Company's 100% working interest oil sands leases in the area. The winter coring program is also expected to include the drilling of core holes at the Company's Algar Lake, Clearwater East and Clearwater North lands. In total, AOS has 140.5 gross (121.2 net) sections of Oilsands leases.

Alberta Oilsands Inc. is a technically driven high growth energy company focused on the development and conversion of the company's oil sands resources to reserves and the creation of long term sustainable value by increasing production and cash flow on relevant conventional oil and natural gas assets.

Analogous Information. In this new release, AOS has provided information with respect to certain of its conventional oil and gas opportunities which is "analogous information" as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. This analogous information includes estimates of historical production amounts in the Buick Creek Slave Point pool. This analogous information is derived from publicly available information sources which are predominantly independent in nature. Some of this data may not have been prepared by qualified reserves evaluators or auditors and the preparation of any estimates may not be in strict accordance with Canadian Oil & Gas Evaluation Handbook. Regardless, estimates by engineering and geo-technical practitioners may vary and the differences may be significant. AOS believes that the provision of this analogous information is relevant to AOS' activities, given its acreage position and operations (either ongoing or planned) in the area in question, however, readers are cautioned that there is no certainty that any of the development on AOS' properties will be successful to the extent in which operations on the lands in which the analogous historical production information is derived from were successful, or at all.

Forward-Looking Statements and Information: This press release contains certain forward-looking statements and information ("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", "design", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, this news release contains forward-looking statements and information with respect to: (i) possible SAGD in-situ development (including the timing of such development) on the Company's oilsands properties, including in respect of pilot projects and further development in respect of its Fort-McMurray properties; (ii) the results of such oil sands development; (iii) the results of the Company's winter core drilling program; and (iv) the results of drilling and further development on, and the ability to realize any additional future production from, the Company's farm-in lands and other conventional oil and gas properties described in this news release, including the Company's ability to fund future developments. 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 and conventional oil and gas 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 and gas prices, the possibility of 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, 2008 as well as the Company's management discussion and analysis for the period ended September 30, 2009, all of which are available at www.sedar.com. The Company undertakes no obligation to update such forward-looking statements or information if circumstances or management's estimates or opinions should change, unless required by law.

Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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.

    
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    (1) British Columbia Oil Gas Commission, 2009. See "Analogous
        Information" below.
    

%SEDAR: 00020297E

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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