Despite challenging market conditions, Alberta Oilsands' strong balance
sheet has allowed it to adhere to its growth plan in the third quarter of
2008, keeping the Company on track to apply for a development permit in 2009
for its first oilsands pilot project. Alberta Oilsands is confident that its
financing and field activities to date have positioned the Company to prove up
sufficient bitumen resources to support one or more 10,000 barrel per day
thermal oilsands in-situ projects on the Athabasca fairway of Northern
Alberta.

Developments at Alberta Oilsands during the third quarter of 2008
included the following:

<<
- An independent engineering update by Ryder Scott Company that
resulted in a 59% increase in contingent (recoverable) resources,
from 216 million barrels in October 2007 to 320 million barrels in
June 2008.
- Raised $15.5 million by way of a bought-deal equity financing in
August 2008.
- Obtained a net present value report by Ryder Scott Company that
estimates the unrisked total value of Alberta Oilsands' Clearwater
West and Clearwater East project areas at $464 million. The report
uses a West Texas Intermediate oil price of US$55 per barrel and is
before income tax and discounted at 10% per annum.
- Completed the quarter with working capital of $20.0 million
- Through Platform Resources Inc., a wholly subsidiary of Alberta
Oilsands, has acquired two exploration concessions in Kenya, in the
East African rift basin, as part of the Company's conventional legacy
effort.

Although share prices and commodity prices have both declined
significantly recently, the Company believes it has sufficient cash flow from
conventional production and working capital to pursue its plans despite
current financial markets volatility.
Alberta Oilsands' current budget is aligned to focus its financial
resources towards the development of the Clearwater project. Consequently, the
2009 capital budget has been reduced from $21 million to $13 million and may
be revisited in the context of the financial markets.

Third Quarter Operating Highlights:

The following tables outline certain highlights of the Company's financial
and operating results for the three and nine months ended September 30, 2008:

Three months ended Nine months ended
Sept 30 Sept 30
Results 2008 2007 2008 2007
------------------------------------...
Petroleum and natural
gas sales 666,302 507,374 1,665,971 2,505,385
Funds (used in)
operations (282,302) (231,667) (1,180,891) (330,152)
Loss for the period (799,495) (1,688,739) (2,749,176) (1,751,857)
Capital expenditures 952,090 7,658,343 10,633,470 15,540,349


Three months ended Nine months ended
Sept 30 Sept 30
Production 2008 2007 2008 2007
------------------------------------...
Oil and NGL (bbls/day) 59 66 52 132
Natural gas (mcf/day) 40 49 43 45
boe(1)/day (6:1) 65 74 59 140


Three months ended Nine months ended
Sept 30 Sept 30
Commodity Prices 2008 2007 2008 2007
------------------------------------...
Oil and NGL ($/bbl) 116.86 76.82 109.95 66.73
Natural gas ($/mcf) 9.64 5.96 9.14 6.75
boe(1) ($/boe) 110.77 74.92 103.29 65.78

(1) See "BOE Presentation" below.
>>

Outlook:

Alberta Oilsands believes it has the potential to produce more than
60,000 barrels of oil per day from its existing oilsands properties. The
Company has four potential in-situ projects and two additional prospect areas,
maintains control over its capital program, holds a large land position and
has a strong balance sheet. Alberta Oilsands raised $15.5 million in August
2008 to augment its working capital position and to fund the fall and winter
2008/2009 drilling programs.
The Company believes it has sufficient working capital to execute its
2008/2009 oilsands core drilling programs, to complete the requirements for a
pilot project application in 2009, and to continue operations until the middle
of 2010 when the application is expected to be approved and financial and
commodity markets are expected to be much healthier.
Alberta Oilsands expects the impact of Alberta's new royalty program on
its internal rate of return to be minimal. The Company believes that any
impact of the revisions will be offset by new technologies that will lower
operating and capital costs. The Company intends to be very prudent in
bringing value to its assets. Management is acutely aware of the general
financial conditions and has reduced the Company's capital program to defer
exploratory projects while focusing on those projects that will get the
Company to initial oilsands production as soon as possible. Alberta Oilsands
believes that its philosophy of prudent capital management in these uncertain
times will keep it well positioned to create long term value for shareholders.