Alberta Oilsands Inc. Announces First Quarter Results and Operations Update

    THE U.S./

    CALGARY, June 2 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS")
(TSXV: AOS) is pleased to announce the financial highlights of the three
months ended March 31, 2008.


    -   Pursuant to a private placement, the Company received net proceeds of
        $8.0 million in the first quarter of 2008, increasing the total
        equity raised to $33.1 million over the previous 15 months

    -   Signed a pooling agreement in Hangingstone East that increased gross
        leases from 23 sections to 38.5 sections (19.5 sections net)

    -   Drilled 34 core holes and acquired 89 kilometers of 2D seismic -
        Identified two possible bitumen production projects based on its
        winter drilling program at Clearwater

    -   Exited the first quarter of 2008 with working capital of $9.5 million

    Oil Sands Operations:

    Fort McMurray - Clearwater East and West Projects

    -   Received approval from Alberta Sustainable Resource Development
        (ASRD) to core up to 26 core holes in the Clearwater East project and
        19 core holes in the Clearwater West project. 15 core holes were
        drilled over 5 of the 28 sections in the first quarter of 2008, and
        encountered up to 50 metres of gross bitumen pay with excellent
        bitumen saturation, porosity and permeability.

    Hangingstone East

    -   Entered into a pooling agreement whereby our 23 sections and their
        15.5 sections in the adjacent Halfway Creek properties were pooled
        into a joint ownership agreement. This resulted in our Company owning
        a 50% working interest in a 38.5 section contiguous land block

    -   Our 2007/2008 winter exploration program included the acquisition
        of 89 kilometres of 2D seismic and the completion of a 19 core hole
        drilling program designed to identify the channel sands. This program
        confirmed the presence of bitumen in the area and the possibility of
        two significant north-south bitumen channels.

    First Quarter Operating Highlights

    The following table outlines certain highlights of our financial and
operating results for the three months ended March 31, 2008:

                                                 Three months ended March 31
                                                         2008           2007
    Petroleum and natural gas sales                   444,336      1,519,356
    Funds from (used in) operations                  (267,248)       605,332
    Loss for the period                              (780,434)     1,315,540
    Capital expenditures                            5,893,011      3,769,082

                                                 Three months ended March 31
                                                         2008           2007
    Oil and NGL (bbls/day)                                 50            258
    Natural gas (mcf/day)                                  47             52
    boe(1)/day                                             58            267

                                                 Three months ended March 31
                                                         2008           2007
    Commodity Prices
    Oil and NGL ($/bbl)                                 91.87          65.77
    Natural gas ($/mcf)                                  7.79           6.73
    $/boe(1)                                            85.74          63.30

    (1) See "BOE Presentation" below.


    Fiscal 2008 has started with three successful drilling programs. Our 15
core holes at Clearwater East and West projects encountered 15 to 50 metres of
gross bitumen pay in the McMurray formation. We believe from the preliminary
data that we may have two possible 10,000 barrel a day projects in the
Clearwater area. The 19 core holes in Hangingstone East/Halfway Creek
confirmed the presence of bitumen and suggest further delineation is required
to locate the channels.
    Our objectives for 2008 are to pursue the goal of bringing the Clearwater
potential project to production in 2011 / 2012 and to advance our Hangingstone
project with our partner in the area.
    The Company will file its first quarter management's discussion and
analysis and interim unaudited consolidated financial statements and notes
thereto as at and for the three months ended March 31, 2008 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, 2007, are available on the Company's SEDAR profile at

    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 be 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 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,; or Chad Dust,
Executive Vice-President, T: (403) 538-3191,; Company

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