Muskeg River Mine Wins Nod from Regulators

Western Oil Sands Inc. said Tuesday that, following the joint federal and provincial review, the Alberta Energy and Utilities Board (AEUB) and the Government of Canada have approved the Muskeg River Mine Expansion.

This approval marks the completion of all major regulatory approvals required for the Athabasca Oil Sands Project (AOSP) Expansion 1, a 100,000 barrel per day (20,000 barrels per day net to Western) fully integrated expansion of the existing AOSP facilities. Expansion 1 includes new oil sands mining operations on Lease 13 and associated additional bitumen upgrading at the Scotford Upgrader. It also includes the construction of common upstream and infrastructure that will be sized to support future mining expansions.

"We look forward to working with our partners and stakeholders on all levels as Expansion 1 moves forward," said Jim Houck, President and Chief Executive Officer. "We are very pleased to have reached this significant milestone as it is a key step in growing our oil sands production."

Western Oil Sands Inc. is a Canadian corporation whose primary asset is its 20-percent undivided interest in the Athabasca Oil Sands Project, one of the largest crude oil reservoirs in the world. In May 2006, Western signed an Exploration Production Sharing Agreement (EPSA) to explore for conventional oil and gas in the Federal Region of Kurdistan in Northern Iraq. This EPSA provides Western with an early entry opportunity into a highly prospective area. Western is also pursuing initiatives related to in-situ and technology development as well as downstream opportunities.