A O Smith Corp V.AOS

Alberta Oilsands arranges $7-million drill program

[Dollarfigure]

Alberta Oilsands arranges $7-million drill program

2009-12-10 20:25 ET - News Release

Mr. Shabir Premji reports

ALBERTA OILSANDS INC. ANNOUNCES WINTER CAPITAL PROGRAM

Alberta Oilsands Inc.'s board of directors have approved a $7.0-million winter capital program for the remainder of 2009, and the first quarter of 2010. The program will consist of both conventional drilling in Northwest Alberta and Northeast British Columbia, and certain oil-sands-coring expenditures in the Ft. McMurray region of Alberta.

AOS currently has two drilling rigs operating in the Peace River Arch area of Alberta and Wildmint, B.C. AOS plans to drill four to five conventional wells in an exploration program targeting large gas reserves, with associated liquids, and light-oil primarily in Slave Point carbonates and in shallower formations. AOS has earned a 50-per-cent working interest on 11 sections of land in this area through an existing farm-in on the property which is located between the Lady Fern field and the Hamburg Slave Point gas field. The company plans to follow up on its successful first quarter 2009 Slave Point discovery at 13 to 29, by drilling a second similar Slave Point anomaly, as defined by 3-D seismic, located several miles to the South.

Immediately across the B.C. border, at Wildmint, AOS is drilling a further Slave Point exploration well where the company intends to earn 7.5 sections through an existing farm-in on a structural horst block which the company expects to be analogous to the Buick Creek Slave Point pool which has cumulative production of 32 billion cubic feet to date. AOS has access to an additional 17 sections of land, on the Peace River Arch, at Hines creek, through a separate farm-in. Additional exploratory locations and/or contingent locations are likely but will depend on successful drilling results of the initial wells.

On Dec. 3, 2009, AOS received an oilsands exploration permit (OSE) from Alberta Sustainable Resource Development (SRD) for its winter oil-sands-coring program. Immediately after freeze-up AOS expects to commence this program which is anticipated to begin with a multiwell core hole drilling program on the company's Hangingstone oil sands leases. Up to 10 core holes are planned at the company's 50-per-cent working interest Hangingstone (Halfway Creek) acreage; the company's joint venture partner in the area will be the operator of this program which will target bitumen in the McMurray formation. Additionally, a six- to eight-well coring program has been budgeted for the company's 100-per-cent working interest oil sands leases in the area. The winter coring program is also expected to include the drilling of core holes at the company's Algar Lake, Clearwater East and Clearwater North lands. In total, AOS has 140.5 gross (121.2 net) sections of oilsands leases.

We seek Safe Harbor.