2012-06-25 15:02:30 -
FOR IMMEDIATE RELEASE
June 25, 2012
Shareholders Urged to Vote Their Blue Proxy for Integrity, Stability and Progress
NOT FOR DISSEMINATION IN THE U.S.A.
Calgary, June 25, 2012 - Alberta Oilsands Inc. (TSXV:AOS) warned shareholders today that a group of dissidents is unabashedly misrepresenting themselves as the board and management of the company.
The group is also blatantly disseminating false and misleading information that threatens to undermine AOS' stability and its reputation.
Jack Crawford, AOS' chairman, said: "The members of this group are leaving no stone unturned to create the impression that they are in control of AOS. They have the audacity to call themselves 'concerned shareholders'. In fact, their tactics smack more of recklessness than of concern for the company
and its shareholders."
AOS shareholders are urged in the interests of integrity and stability to vote their BLUE proxy in support of the management slate of board nominees ahead of the upcoming annual meeting.
Two independent proxy advisory services, Institutional Shareholder Services (ISS) and Glass Lewis & Co., have both recommended votes in favour of management's seven nominees.
--- The Dissidents' So-Called "New Board"
In recent press releases, the dissidents presumptuously and falsely refer to themselves as AOS' "new board", as if the annual meeting and election of directors, scheduled for June 28, 2012, has already taken place.
In fact, the dissidents have no board at all. One member of their proposed slate, Adrian Goodisman, is a highly respected and long-serving independent director of AOS. Mr. Goodisman has said publicly that his name was added to the dissident slate without his knowledge or approval, and that he continues to vigorously support the existing board (see press release dated June 8, 2012).
The current board is best suited to guide the company forward.
--- The Dissidents' Presumptuous and Costly Plans
The dissidents have gone even further in seeking to hijack the current board and management. As disclosed in a press release on June 22, 2012, they have put themselves in a management role by engaging an investment banking firm to seek out "numerous domestic and international opportunities" for AOS.
The dissidents' hidden agenda has finally been revealed - namely to hijack AOS' strong balance sheet for their own purposes. If in fact they actually have 'accretive deals waiting', as they claim, shareholders should ask: Why haven't they brought these transactions to the attention of AOS' board? Plainly they must control AOS in order to use the company's cash reserves to fund activities that would not be in the interest of all shareholders.
The dissidents are already spending money like drunken sailors.
What can we expect of them if they gain control of the company?
--- The Dissidents' Purported Farm-In "Deal" for the Algar Lake Property
Any doubt about the dissidents' motives and tactics was put to rest in a press release on June 24, 2012, purporting to announce a farm-in deal with a third party for AOS' Algar Lake property.
If the dissidents do have a potential deal on Algar Lake, AOS challenges them to bring it to the real board so that the merits of the transaction can be compared with others that the board is currently evaluating. Specifically, AOS challenges the dissidents to reveal the identity of the "private company" involved. The board and management have already added significant value to AOS' two other major assets, Clearwater and Grand Rapids, and would willingly review any new alternative proposals for Algar Lake.
However, it is hard to understand - and hard to believe - that the dissidents could conclude an "agreement in principle" without having up-to-date technical knowledge of Algar Lake. Strangely, they have made no effort to consult AOS management and technical experts who have first-hand knowledge of the property's merits and its challenges.
The dissidents' release lacks critical details normally included to such announcements. Mr. Joe Francese, the group's spokesman, has further muddied the waters by asserting in a recent BNN interview that cold flow production from Algar Lake is assured. This grossly overstates the true state of affairs, and is a very significant misrepresentation if it has been made to the potential new partner.
It is easy for the dissidents to announce a "deal" and inflate facts when they are not constrained by normal disclosure rules. No legitimate company would be allowed to unveil a transaction in a way that is so overtly promotional and leaves so many critical questions unanswered.
The dissidents' behavior reeks of irresponsible stock promotion,
designed to seize control of AOS and distract shareholders from the real issues
--- Mr. Chad Dust's Shadowy Role
AOS is deeply concerned about the behind-the-scenes activities of Mr. Chad Dust. Mr. Dust was terminated as an AOS employee in July 2010, but emerged earlier this year as the ringleader of the dissident group. The group initially put his name forward as a board nominee. They subsequently revised their slate to exclude him, apparently realizing that Mr. Dust's reputation would damage their cause.
Even so, AOS has strong evidence that Mr. Dust remains the group's puppetmaster. He has blatantly misrepresented himself in recent weeks to members of the investment community as being in control of AOS, even as other dissident members insist that he has no role in their group. AOS is aware that Mr. Dust has made solicitation phone calls to numerous AOS shareholders.
AOS also challenges the dissidents to reveal Mr. Dust's role in the purported Algar Lake transaction, mentioned above. Such involvement would raise serious ethical issues. Shareholders would be well-advised to compare Mr. Dust's past statements on transactions and public companies in which he has been involved with actual performance.
Mr. Dust's hidden agenda is also illustrated by his involvement with Sunridge Energy Corp., a small oil and gas technology company that has sought to foist its unproven technology on AOS. Mr. Dust is a director of Sunridge. (Full details of AOS' interaction with Sunridge can be found in AOS' proxy circular.)
Mr. Dust remains involved behind the scenes, despite the dissidents' disingenuous denials.
--- Risks to AOS Operations and Employees
AOS management is concerned about the impact of the dissidents' false promises and hidden agenda on the company's operations.
The group's apparent determination to throw AOS off its present, carefully-considered course is sure to distract attention from the company's most valuable and promising asset, namely, the high-quality Clearwater bitumen deposit on the outskirts of Fort McMurray. The current board has husbanded resources to navigate the lengthy regulatory process required to bring Clearwater to production. Costly and risky forays elsewhere threaten to undo progress made so far.
Equally worrying, the uncertainties that would accompany a dissident victory would have a serious impact on AOS employees' prospects. Mr. Joe Francese, the dissident group's spokesman, has warned that the new board will reduce management salaries. This is an extremely irresponsible statement. The strong demand for talented people with oil sands experience should be a major cause of concern for shareholders who are counting on these very employees to create value from AOS' assets.
"We are confident that our shareholders will not allow this confused group, unfamiliar with the oil sands, to hijack a company with false accusations and equally misleading promises", Mr. Crawford said. "Even so, we are concerned that the dissidents' irresponsible actions will escalate as they become even more desperate as the voting deadline and the meeting approach. Their win-at-all-costs strategy appears to have no bounds, and is focused on their own hidden agenda, regardless of the damage it may cause at AOS. What will they resort to next?"
Mr. Crawford added: "The existing board has the stronger team, a better strategy and the actual skills needed to manage and grow an oil sands company."
A change of the board would seriously damage and impair the company's fundamental strengths,
bringing upheaval and uncertainty.
AOS shareholders are due to elect directors at the annual and special meeting on June 28, 2012.
Shareholders should vote their BLUE proxy in favour of management's seven nominees, in line with the ISS and Glass Lewis recommendations.
Proxies must be received before 10:00 a.m. (Calgary time) on Tuesday, June 26, 2012.
Shareholders who have questions on how to vote should call Kingsdale Shareholder Services toll-free at 1-866-229-8263 or call collect at 416-867-2272 for assistance in voting the BLUE proxy.
About Alberta Oilsands Inc.
Alberta Oilsands 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 Oilsands' common shares are traded on the TSX Venture Exchange under the symbol AOS. For more information, go to www.aboilsands.ca
For further information please contact:
Jack Crawford, Chairman
Michael Lee, President and Interim CEO
Bernard Simon, Vice-President - Kingsdale Communications Inc.
(416) 867 2304
Cautionary Note Regarding Forward-Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking information In particular, this press release contains forward-looking information with respect to the dissidents' hidden agenda, expectations regarding the future actions of the dissidents and the negative impact such actions would have on AOS; expectations regarding the escalation of the dissidents' conduct as the voting deadline and the meeting approach; and the negative impact a change of the board would have on AOS. A description of the assumptions used by AOS to develop forward-looking information and the risk factors that may cause actual results to differ materially from the forward-looking information contained in this press release can be found in AOS' Annual Information Form and Management's Discussion and Analysis for the year ended December 31, 2011 located on the SEDAR website at www.sedar.com. The forward-looking information contained in this press release is made as of the date hereof and AOS undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.
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.
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