Ausam Energy Corporation Announces Early Warrant Exercise Incentive Program

    TSX Venture Exchange - Symbol "AZE"
    OTC Bulletin Board - Symbol "ASMEF"

    CALGARY, Oct. 19 /CNW/ - Ausam Energy Corporation ("Ausam" or the
"Company") is pleased to announce that the TSX Venture Exchange ("TSXV") has
conditionally approved an early warrant exercise incentive program (the
"Program") designed to encourage the exercise of up to 8,701,132 common share
purchase warrants (the "Warrants") of Ausam. The Program will be open for a
30-day period, which will commence on October 20, 2008, and end on November
18, 2008 (the "Early Warrant Exercise Period"). During the Early Warrant
Exercise Period, existing holders of Warrants may exercise their Warrants at a
discounted price of US$1.50 per Warrant.
    Each Warrant exercised in accordance with the terms of the Program will
entitle the exercising holder to receive one common share in the capital of
Ausam ("Common Shares") and one-half of one Common Share purchase warrant (the
"Incentive Warrants"). Each whole Incentive Warrant will have a term of five
years and will entitle the holder to purchase one Common Share (i) at a price
of US$1.50 for the first two years of its term; (ii) at a price of US$1.65 in
the third year of its term; (iii) at a price of US$1.82 in the fourth year if
its term; and (iv) at a price of US$2.00 in the fifth year of its term.
    The Incentive Warrants and any Common Shares issuable on the exercise
thereof will be subject to a four month hold period commencing on the date of
issuance of the Incentive Warrants pursuant to Canadian Securities laws. All
Common Shares issuable pursuant to exercises of the Warrants, all Incentive
Warrants and all Common Shares issuable on the exercise thereof will be
subject to a hold period pursuant to United Stated securities laws, regardless
of the jurisdiction of residence of the holder. Holders of Warrants are
encouraged to refer to the Exercise Form referred to below for the particulars
of the applicable hold periods.
    If all Warrants eligible to participate in the Program are exercised on
or before the expiry of the Early Warrant Exercise Period, the Company expects
it will:

    -   receive gross proceeds of up to approximately US$13,051,698;
    -   issue up to approximately 8,701,132 Common Shares; and
    -   issue up to approximately 4,350,566 Incentive Warrants.

    If a Warrantholder does not exercise his or her Warrants prior to the end
of the Early Warrant Exercise Period, such unexercised Warrants will remain
outstanding and will continue to be exercisable for Common Shares on the same
terms applicable to such Warrants as they existed prior to the Program.
Certain Warrants will not be eligible for the Program (the "Ineligible
Warrants"), which include (i) Warrants previously issued to agents as
compensation or held by employees of such agents; (ii) Warrants held by
insiders of the Company (in excess of an aggregate of 483,279 Warrants held by
such insider which may participate on a pro rata basis); and (iii) Warrants
issued by the Company after October 20, 2008.

    The Warrants represent all of the outstanding warrants of the Company as
at October 20, 2008, other than the Ineligible Warrants, and were originally
issued pursuant to the following private placements:

    -   3,092,682 Warrants dated February 8, 2007, having an exercise price
        of CDN$3.25 and expiring February 8, 2012;
    -   1,021,666 Warrants dated February 8, 2007, having an exercise price
        of CDN$3.25 and expiring February 8, 2012;
    -   4,461,099 Warrants dated July 3, 2007, having an exercise price of
        CDN$3.00 and expiring July 3, 2012; and
    -   125,685 Warrants dated September 8, 2007, having an exercise price of
        CDN$3.25 and expiring September 8, 2012.

    Warrantholders who elect to participate in the Program will be required to
deliver to the following to the Company:

        (i)   a duly executed letter of transmittal and exercise form
              ("Exercise Form"), including the original certificate
              representing the Warrants being exercised;
        (ii)  a duly executed subscription form; and
        (iii) the applicable aggregate exercise price payable to the Company
              by way of certified cheque, bank draft or wire transfer.

    The terms and conditions of the Program and the method of exercising
Warrants pursuant to the Program will be set forth in the Exercise Form, which
will be mailed to the registered address of each Warrantholder and posted on
SEDAR. The summary of the Program herein is subject in its entirety to the
terms and conditions of the Exercise Form. Only Warrantholders who are
"accredited investors" under applicable securities laws or who provide
satisfactory evidence that they meet the requirements of a similar exemption
from the prospectus and registration requirements of applicable securities
laws may participate in the Program.

    About Ausam

    Ausam is a public company engaged in the business of oil and gas
exploration and development. Ausam, through its U.S. subsidiary Noram
Resources, Inc, has acquired a diverse portfolio of oil and gas leases and
prospects in Texas, Louisiana, Mississippi, Alabama and Arkansas. Ausam,
through its Australian subsidiary Ausam Resources Pty Ltd., holds interests in
permits in Queensland and Victoria. Ausam's growth strategy includes the
organic development of its current holdings and selective corporate
transactions. The Company trades under the symbol "AZE" on the TSX Venture
Exchange and the symbol "ASMEF" on the OTC Bulletin Board.

    William M. Hitchcock

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

    Cautions Regarding Forward-Looking Statements

    Forward-looking statements (often, but not always, identified by the use
of words such as "expect", "may", "could", "anticipate" or "will" and similar
expressions) may describe expectations, opinions or guidance that are not
statements of fact. Forward-looking statements are based upon the opinions,
expectations and estimates of management of Ausam as at the date the
statements are made and are subject to a variety of known and unknown risks
and uncertainties and other factors that could cause actual events or outcomes
to differ materially from those anticipated or implied by such forward-looking
statements. Those factors include, but are not limited to the amount of funds
anticipated to be raised by the Program and other risks, uncertainties and
other factors that are beyond the control of Ausam. In light of the risks and
uncertainties associated with forward-looking statements, readers are
cautioned not to place undue reliance upon forward-looking information.
Although Ausam believes that the expectations reflected in the forward-looking
statements set out in this press release are reasonable, it can give no
assurance that such expectations will prove to have been correct. The
forward-looking statements of Ausam contained in this press release, or
incorporated herein by reference, are expressly qualified, in their entirety,
by this cautionary statement.

    This news release shall not constitute an offer to sell or the
solicitation of an offer to buy securities of Ausam in any jurisdiction. The
securities of Ausam which have not been registered under the Securities Act of
1933, as amended (the "1933 Act") may not be offered or sold in the United
States absent registration or an applicable exemption therefrom under the 1933
Act and applicable state securities laws.

    %SEDAR: 00008979E

For further information:

For further information: Mark G. Avery, President and CEO,, Tel: (832) 678-2200, Fax: (832) 678-2205; Ralph D.
Davis, Chief Financial Officer,, Web site:

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