2012-09-19 15:19:09 -

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


Calgary, Alberta CANADA, September 19, 2012 /FSC/ - Alberta Oilsands Inc. ("AOS" or the "Company")(AOS - TSX Venture),is pleased to announce that it has filed a preliminary prospectus in respect of an offering of Rights (the "Rights Offering").

Pursuant to the terms of the Rights Offering, and subject to applicable law, the holders of AOS Common Shares ("Shareholders") as at the record date for the Rights Offering (the "Rights Offering Record Date") will, in respect to each AOS Common Share held, be issued one (1) Right. Every one (1) Right will entitle the holder to purchase one (1) AOS unit ("Unit") at an exercise price

of $0.10 per Unit until the rights expiry date. Each Unit will consist of one (1) AOS Common Share and one AOS Common Share purchase warrant ("Warrant").

Each Warrant will entitle the holder thereof to purchase one (1) additional AOS Common Share at an exercise price of $0.30 per AOS Common Share at any time from the closing date of the Rights Offering to up to 5:00 pm (Calgary time) on the date which is 24 months after such closing date.

The Company anticipates that the rights expiry date will be 21 days after the date that the final prospectus to be filed in connection with the Rights Offering (the "Prospectus") is first mailed to Shareholders. The Company has applied to list the Rights, the AOS Common Shares and Warrants issuable upon the exercise of the Rights and the AOS Common Shares issuable upon exercise of the Warrants on the TSX Venture Exchange. The approval of such listing will be subject to the Company fulfilling all of the listing requirements of the TSX Venture Exchange, including the distribution of the Warrants to a minimum number of public security holders.

Binh Vu, Interim President and Chief Executive Officer commented: "The new AOS team has now had the ability to conduct an exhaustive internal review which has yielded, amongst other things, major budgetary and G&A savings."

"Having consolidated our efforts, we are now intent, and fully focused on the go-forward strategy of rebuilding the Company's share price through value-add transactions, partnerships, sales, and the like."

"As we begin this process, we want to give existing Shareholders an exclusive ability to lower their average cost base, without the possibility of suffering dilution from outside funders, until we have re-built share value."

"The new AOS team is working diligently on the acquisition of accretive domestic and international assets, as well as the optimization and monetization of the current portfolio of oil sands and conventional assets."

"AOS' oil sands assets are currently receiving only a fraction of a penny in value per barrel, given the Company's current market valuation, net of cash."

"Any AOS Common Shares taken up in the Rights Offering will provide more capital and hence more flexibility to the Company, as it aims to rejuvenate and transform itself to rapidly build immediate and sustainable long term Shareholder value."

The Rights Offering is subject to regulatory approval, including approval of the TSXV. The Company currently anticipates setting the Rights Offering Record Date shortly after the filing of the Prospectus and, subject to applicable law, sending the Prospectus to AOS Shareholders of record on the Rights Offering Record Date shortly thereafter.

In addition, the Company announces that it has amended and re-filed its unaudited interim financial statements for the interim period ended June 30, 2012 (the "Interim Financial Statements"). The Interim Financial Statements have been amended to remove the notice that the Company's auditors have not reviewed the Interim Financial Statements as such statements have now been reviewed by the Company's auditors. The Interim Financial Statements have also been amended to reflect corrections to the presentation of the 2011 statement of changes in equity to comply with IAS 34, Interim Financial Reporting.

About AOS

Alberta Oilsands Inc. is engaged in the exploration and development of bitumen in the Athabasca oil sands region of northeast Alberta. Its head office is located in Calgary, Alberta, Canada and the AOS Common Shares are traded on the TSX Venture Exchange under the trading symbol "AOS".

For further information please contact:

GMFB Communications Inc.
(416) 907-9422
Email: achambers@gmfbcommunications.ca
Website: www.gmfbcommunications.ca

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

This press release contains certain "forward-looking information" within the meaning of applicable securities law including statements regarding the proposed use of the proceeds of the Rights Offering, the listing of the offered securities on the TSX Venture Exchange, the expiry date of the Rights Offering and the date that the Prospectus will first be mailed to Shareholders.

Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. The forward-looking information contained in this press release is based on the assumption that the Rights Offering will be well subscribed and that the Rights Offering will be completed in accordance with the timeline currently contemplated. In addition, the forward-looking information included in this press release is 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 information. These factors include the possibility that AOS may not be able to obtain the necessary approvals to proceed with the Rights Offering, that the TSX Venture Exchange may not approve the listing of the offered securities, that unforeseen circumstances may arise which delay the Rights Offering and that the proceeds actually raised as a result of the Rights Offering are less than what is currently contemplated, In addition, management of the Company will have broad discretion in the application of the proceeds of the Rights Offering. In addition, there can be no assurance that a transaction will result from the efforts currently being undertaken with respect to acquisitions and monetization of the Company's oil sands and conventional assets. If a transaction does materialize, no assurance can be made with respect to the terms or timing associated therewith. For a description of the risks and uncertainties facing AOS and its business and affairs, readers should refer to AOS's Annual Information Form for the year ended December 31, 2011. AOS 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.

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Source: Alberta Oilsands Inc. (TSX-V AOS) www.aboilsands.ca
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