Alberta Oilsands Enters into Private Placement, Bought Deal Financing

Alberta Oilsands Inc. has entered into a private placement common share and flow-through common share financing agreement, on a bought deal basis, with an underwriting syndicate led by Canaccord Capital Corporation and including National Bank Financial Inc., BMO Nesbitt Burns Inc., Genuity Capital Markets, GMP Securities L.P., Raymond James Ltd., (collectively the "Underwriters").

The Company will issue 5,000,000 common shares and 11,843,000 flow-through common shares at a price of $0.75 per common share and $0.95 per flow-through common share for total gross proceeds of $15,000,850. In addition, and subject to regulatory approval, the Underwriters will also be entitled to an option to purchase additional common shares and flow-through common shares having a total value of up to $5,000,000, exercisable in whole or in part. If the Underwriters' option is exercised in full the total gross proceeds of the
offering will be approximately $20,000,000.

The private placement financing is scheduled to close on July 31, 2008 and is subject to customary conditions including regulatory approval. The proceeds of the financing will be used to fund the Company's 2008/09 capital
expenditure program. Proceeds from the issuance of the flow-through common shares will be used to incur Canadian exploration expenses on continued exploration of the Company's oil and natural gas properties in western Canada, including its Athabasca oil sands lands, prior to December 31, 2009 and will be renounced to subscribers of the flow-through common shares effective December 31, 2008.