Alberta Oilsands Inc. operational and financial update



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

    ESTABLISHMENT OF NEW CORE AREA NEAR FORT MCMURRAY

    CALGARY, Sept. 5 /CNW/ - Alberta Oilsands Inc. ("AOS" or the "Company")
(TSXV:AOS) is pleased to announce that it has acquired 22.5 sections
(14,400 acres) of contiguous oil sands leases, at 100% working interest, in
the heart of the Athabasca oil sands fairway near Fort McMurray.
    To date there have been 5 penetrations drilled on the acquired oil sands
leases surrounded by approximately 100 wells drilled on adjacent sections that
confirms the presence of the reservoir oil sands with bitumen pay thickness
ranging from 25 to 60 meters. The Alberta Energy and Utilities Board Crude
Bitumen Reserves Atlas estimates that the leases contain undiscovered resource
in excess of 2.0 billion barrels of original bitumen in place ("OBIP").
    Drilling is planned for the 2007/Q1 2008 season to further delineate the
potential for an in-situ project. The prospective zone on the oil sand leases
is the McMurray Formation which comprises high quality fluvial and estuarine
channel sands. The Company has engaged Ryder Scott Petroleum Consultants to
complete a National Instrument 51-101 compliant resource assessment on the
acquired leases.
    The acquisition of the additional oil sands leases increases the
Company's land base to a total of 107.5 sections (68,800 acres). The acquired
leases in conjunction with AOS' Hangingstone assets, will form the basis of
the Company's plan for a series of successive in-situ bitumen extraction
projects, likely applying SAGD (Steam Assisted Gravity Drainage) technology.
    In addition, AOS has acquired and interpreted 60km of trade 2D seismic on
its 23 section Hangingstone Parcel. The data reveals four main anomalies
indicating potential bitumen pay similar to the Hangingstone Meadow Creek
reservoir to the south.
    Mr. Shabir Premji, Executive Chairman of the Company, stated "AOS is very
pleased to have added this large scale oil sands property to its portfolio. We
intend to aggressively pursue moving this resource to the reserves category."
    As at September 5, 2007 AOS had positive working capital of $14,500,000.

    Alberta Oilsands Inc. is a technically driven high growth junior oil
sands 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 leases.

    
                                 (xxxxxxxxx)
    

    Undiscovered Resource is defined as "those quantities of oil and gas
estimated on a given date to be contained in accumulations yet to be
discovered" (5.2.3. in Volume 1-Reserves Definitions and Evaluation Practices
and Procedures Volume 1, Canadian Oil and Gas Evaluation handbook SPEE
(Calgary Chapter).

    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. 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.

    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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