ALBERTA OILSANDS INC. ANNOUNCES NON-BROKERED "FLOW THROUGH" PRIVATE PLACEMENT
FINANCING

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

CALGARY, Dec. 22 /CNW/ - Alberta Oilsands Inc. (the "Company" or "AOS") (TSXV:AOS) is pleased to announce that it intends to raise approximately $300,800 in a non-brokered private placement financing (the "Offering") by issuing 470,000 common shares issued on a "flow through basis" pursuant to the Income Tax Act (Canada) (the "Flow-Through Shares") priced at $0.64 per Flow-Through Share to a Calgary, Alberta based institutional investor.

The gross proceeds of the Offering will be used to incur eligible Canadian exploration expenses, as defined under the Income Tax Act (Canada), and will be renounced to the subscribers effective on or before Dec. 31, 2010.

The gross proceeds will primarily be used to further delineate and define the Company's oil sands properties. The Company expects to expand its winter delineation program with the objective of enhancing its reserves and resource base.

In the event that the Offering is completed, closing will occur no later than December 31, 2010, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

Under the Offering, the Company will pay a 6% finder's fee in connection with subscription for Flow-Through Shares on terms and conditions determined by the Company and in accordance with the policies of the TSX Venture Exchange.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-looking statements: This press release contains forward looking statements. More particularly, this press release contains statements concerning the completion of the Offering, the anticipated closing date of the Offering and the anticipated use of the net proceeds of the Offering. Although AOS believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because AOS can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. As the Offering is non-brokered, it will only be completed if sufficient purchasers for the Flow-Through Shares can be identified and, as such, there can be no assurances that the Offering will be completed on the currently proposed terms, or at all, in the event that such purchasers cannot be located.  In addition, the closing of the Offering may not be completed if AOS is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned or if some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time, on the terms currently proposed, or at all. The intended use of the net proceeds of the Offering by AOS might change if the board of directors of AOS determines that it would be in the best interests of AOS to deploy the proceeds for some other purpose. The forward looking statements contained in this press release are made as of the date hereof and AOS undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so 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.

For further information:

Alberta Oilsands Inc., Suite 2800, 350 - 7th Avenue S.W., Calgary, Alberta, T2P 3N9, Shabir Premji, Executive Chairman,T: [phone], F: [phone], [email protected]; or Andrew Costantinidis, VP Finance and Business Development, T: [phone], F: [phone], [email protected]; Company website: www.aboilsands.ca