Alberta Oilsands Inc. provides operations update and announces significant farm-in agreement



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

    CALGARY, Jan. 28 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS")
today announces an operations update in respect of its Clearwater West
property near Ft. McMurray and its Leduc property near Edmonton as well as the
entering into of a significant farm-in agreement with respect to properties
located in Central and Northwest Alberta.

    Operations Update

    At its Ft. McMurray Clearwater West property, AOS has completed its
winter 2009 program by drilling 8 wells on its core property. The drilling
results from Section 21 and 22 Twp 88 R8W4 confirm high quality bitumen with
an estimated total McMurray formation gross bitumen sand thickness based on
logs averaging 40 meters (m) on the wells with a maximum of 55m in the
13-22-088-08W4 and a minimum of 26m. In conjunction with the work program AOS
has also completed cap rock integrity testing confirming maximum pressure
limits which will determine SAGD injection pressure, as well as water source
and disposal zone testing. The positive coring and cap rock work results
provide AOS with the required data to proceed with its 2,000 boe/d SAGD pilot
project submission utilizing enhanced SAGD technologies. AOS has elected to
focus only on coring at the Clearwater West Property, the most advanced of the
entire company portfolio, and defer activities on all other oil sands
properties, including the Hangingstone East Property with AOS's joint venture
partner due to the current economic environment.
    At Leduc, AOS continues to reduce operating costs at its central Alberta
(100% Working Interest) operated property as a result of facilities upgrades
last year. Up to six development drilling locations on this Nisku light oil
property have been indentified to grow production as the company continues to
embark on seeking out conventional, light oil focused, short term to cash flow
opportunities. Total corporate production is currently 75 boe/d.

    Farm-in Agreement

    Alberta Oilsands Inc. is pleased to announce that on January 26, 2009 it
secured a significant conventional oil and gas farm-in on lands in Central and
Northwest Alberta. AOS has the right to earn a minimum 50% working interest in
over 31 sections of land in Northwest Alberta (Chinchaga/Lady Fern) and
Central Alberta (Mcleod). AOS will fund a disproportionate percentage of the
total drilling, casing, and completion costs and its 50% partner will fund a
disproportionate percentage of the total equipping, tie-in, and facilities
costs. The farm-in agreement provides AOS with the option to drill up to 7
locations in 3 areas throughout northwest and central Alberta targeting drill
ready, liquids rich natural gas pools. Offsetting pools in the Chinchaga/Lady
Fern/Mcleod area have produced between 5 to 20 BCF(1) (billion cubic feet) per
prospect. Each area with success has 2-3 repeatable follow-up development
locations on the 50% working interest earned lands. The Northwest Alberta
property is located in the gas prone Chinchaga/Lady Fern area and is a high
quality, high impact prospect identified by 3D seismic. AOS has committed to
the drilling of one well in the Chinchaga/Lady Fern area which is expected to
spud by February 20, 2009. The well and pipeline have been surveyed and
licensed.
    Shabir Premji AOS Executive Chairman commented, "We are pleased to
partner with an experienced operator with an industry leading technical team
in the respective areas. The high quality prospects secured in this agreement
would most likely not have been available in a more normal business climate."

    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.

    
    ----------------------------------
    (1) IHS Accumap October 2008
    

    Disclosure of Resources: There is no certainty that it will be
commercially viable for the Company to produce any portion of the resources
detailed in this news release. 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 the ability to finance such costs given the current market
conditions and those other risks and contingencies discussed in more detail in
the sections entitled "Business Risks and Uncertainties" and "Forward-looking
Statements and Information" in the Company's management discussion and
analysis for the periods ended December 31, 2007 and September 30, 2008.
"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.

    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", "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 oilsands development;
and (iii) the development of 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 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 as well as the
Company's management discussion and analysis for the period ended September
30, 2008, 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.

    
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy and accuracy of this release.
    
    %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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