AOS announces farm-in agreement, operations update, and option cancellation


    CALGARY, June 4 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS") is
pleased to announce that it has entered into a farm-in agreement with a
privately held Canadian oil and gas producer. The farm-in lands are located in
the Hines Creek area of the Peace River Arch region in northwest Alberta,
approximately 100 kilometers southeast of AOS's recent Ladyfern/Chinchaga
Slave Point discovery well. The Hines Creek area is a multi-zone hydrocarbon
prone area with mostly all season access. The agreement provides AOS with a
50% working interest earning in 17 sections of land through the drilling of
two test wells to a depth of 1,100 metres and an additional option on a
current and future area of mutual interest lands. Both test wells are
scheduled to spud prior to August 31, 2009. This farm-in is a continuation of
AOS's interim strategy of investing in conventional exploration opportunities,
which have short time to cash flow, during the current economic downturn. The
Company's long-term strategy remains focused on the development of its oil
sands properties.
    As AOS has previously announced, at Ladyfern/Chinchaga area, the Hamburg
13-29-095-21W6M well was successfully brought on production on April 1, 2009.
Initial production from this well was 5 million cubic feet per day. At the
time, it was expected that the flow rates may require moderation to
accommodate existing facilities. AOS has a 50% working interest in the well.
The well is eligible for the Alberta Government's new well royalty incentive
program, which provides for 5% royalty rate for gas production volume of up to
500 million cubic feet. On April 18, 2009, the well was shut-in for a 13 day
pressure build-up test with downhole pressure recorders. Currently, with the
Ladyfern well back on production the Company's total production is in excess
of 400 boe/d.
    The Company also announces that certain option holders have agreed to the
cancellation of an aggregate of 1,560,000 options to acquire common shares in
the capital of AOS. The options that were cancelled had been held by various
directors and officers, pursuant to the Company's stock option plan, had
exercise prices ranging from $1.30 to $2.21 per share and were set to expire
between May 27 and August 30, 2012.

    About Alberta Oilsands Inc.

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

    Neither TSX Venture Exchange nor its Regulation Services Provider accepts
    responsibility for the adequacy or accuracy of this release.

    Forward-Looking Statements and Information: This news 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 with respect
to: (i) the possible development (including the timing of such development) on
the Company's oil sands properties; (ii) the results of such oil sands
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 risks and uncertainties
discussed in the Company's annual financial statements and management
discussion and analysis for the year ended December 31, 2008, both of which
are available at Readers are urged to review such risks and
uncertainties in their entirety. 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.

    %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 Finance and Business Development, T: (403) 538-3191,
F: (403) 263-6702,; Company website:

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