Athabasca Finalizes Acquisition of Excelsior Energy

CALGARY, Nov. 9 /CNW/ - Athabasca Oil Sands Corp. (TSX:  ATH) announces it has completed the previously announced acquisition of Excelsior Energy Limited (TSXV: ELE) pursuant to a plan of arrangement that became effective earlier today.  Excelsior's security holders voted this morning by a 99.9% majority to approve the arrangement and the court sanctioned the arrangement this afternoon.

Athabasca expects to make an application to the TSX Venture Exchange to de-list the Excelsior common shares from the TSX-V shortly.

Sveinung Svarte, Athabasca's president and CEO is pleased the acquisition has been completed.  "With this acquisition, we acquired Excelsior's oil sands acreage at Hangingstone and West Surmont plus its in situ combustion technology.  This deal will likely enable us to accelerate development of the Hangingstone area. 

"We are also very pleased to see the massive support from Excelsior's security holders with only 0.1% voting against this plan of arrangement," Svarte adds.  "Most of them preferred Athabasca shares rather than cash.  We see that as a strong vote of confidence for the company and we are happy to welcome them as new shareholders."

Athabasca intends to file an application with Alberta Environment and the Energy Resources Conservation Board (ERCB) in 2011 seeking approvals for an up to 2,000 cubic metres per day (approximately 12, 000 barrels/day) steam assisted gravity drainage (SAGD) pilot in Hangingstone.   Once approvals are granted, it plans to build surface facilities capable of steaming production areas on the combined acreage. 

SAGD involves drilling pairs of horizontal wells into the oil-bearing formation, injecting steam into the upper wells (to reduce the viscosity of the bitumen) and collecting the heavy oil in the lower well so it can flow to surface. 

Dr. David Winter, former president and CEO of Excelsior, believes the transaction is good for Excelsior's security holders.  "Athabasca offered our investors the choice of either a cash deal or the ability to exchange their shares and warrants for Athabasca shares or warrants.  The vast majority elected to become Athabasca shareholders.  Their resources are well-known, well-defined and well-explored.  They have a strong track record of creating value for their investors."

According to Bill Gallacher, Athabasca's chair of the board, there continues to be an impressive interest in oil sands and predicts further mergers and acquisitions as the Canadian economy recovers.  "It's good to see a Canadian company buy another Canadian organization.  Athabasca's asset base of approximately 8.705 billion barrels, which is comprised of 8.591 billion barrels of contingent resource (best estimate) and 114 million barrels of probable reserves, and strong financial position with $1.9 billion in net working capital, gives it the ability to continue to make strategic purchases."

Athabasca is a dynamic oil sands company formed to develop and produce bitumen in the Athabasca region of northeastern Alberta.  It was incorporated in 2006 with a goal to use the latest technology to produce bitumen in a sound, progressive and safe manner.  The company's shares are traded on the Toronto Stock Exchange under the trading symbol ATH.  It has a current market capitalization of $4.8 billion.

Reader Advisory
This News Release contains forward-looking information that involves various risks, uncertainties and other factors. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict", "pursue" and "potential" and similar expressions are intended to identify forward-looking statements. The forward-looking information is not historical fact, but rather is based on AOSC's current plans, objectives, goals, strategies, estimates, assumptions and projections about AOSC's industry, business and future financial results. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release should not be unduly relied upon. These statements speak only as of the date of this News Release. In particular, this News Release may contain forward-looking statements pertaining to the following: AOSC's capital expenditure programs; the estimated quantity of AOSC's Probable and Possible Reserves and Contingent Resources; AOSC's drilling plans; AOSC's plans for, and results of, exploration and development activities; AOSC's plans with respect to the Birch and Grosmont assets; timing of completion of the Excelsior transaction, AOSC's plans with respect to the assets to be acquired from Excelsior including the timing for submission of the application for and receipt of pilot project approval and the expected benefits to be received by AOSC from such assets; the pro-forma effect of the Excelsior transaction on AOSC's resources and undeveloped land position; and the timing for receipt of regulatory approvals. With respect to forward-looking statements and forward-looking information contained in this News Release, assumptions have been made regarding, among other things: AOSC's ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which AOSC conducts and will conduct its business; the applicability of technologies for the recovery and production of AOSC's reserves and resources; future capital expenditures to be made by AOSC; future sources of funding for AOSC's capital programs; AOSC's future debt levels; geological and engineering estimates in respect of AOSC's reserves and resources; the geography of the areas in which AOSC is conducting exploration and development activities; and AOSC's ability to obtain financing on acceptable terms. Actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth above and under the headings "Notice to Investors -Forward-Looking Statements" and "Risk Factors" in the Company's prospectus dated March 30, 2010, which is available on the SEDAR website at www.sedar.com ("Prospectus"), including: fluctuations in market prices for crude oil and bitumen blend; general economic, market and business conditions; dependence on the PetroChina subsidiary as the joint venture participant in the MacKay River and Dover oil sands projects; variations in foreign exchange and interest rates; factors affecting potential profitability; the global financial crisis; uncertainties inherent in estimating quantities of reserves and resources; AOSC's status and stage of development; uncertainties inherent in Steam Assisted Gravity Drainage ("SAGD"), Cyclic Steam Stimulation ("CSS") and other bitumen recovery processes; the potential for adverse consequences in the event that AOSC defaults under certain of the PetroChina Transaction Agreements (as defined in the Prospectus); environmental risks and hazards and the cost of compliance with environmental regulations, including greenhouse gas regulations and potential Canadian and U.S. climate change legislation; failure to obtain or retain key personnel; the substantial capital requirements of AOSC's projects; the need to obtain regulatory approvals and maintain compliance with regulatory requirements; extent of, and cost of compliance with, government laws and regulations and the effect of changes in such laws and regulations from time to time; changes to royalty regimes; political risks; failure to accurately estimate abandonment and reclamation costs; risks inherent in AOSC's operations, including those related to exploration, development and production of oil sands reserves and resources, including the production of oil sands reserves and resources using SAGD, CSS or other in-situ technologies; the potential for management estimates and assumptions to be inaccurate; long term reliance on third parties; reliance on third party infrastructure for project facilities; failure by counterparties to make payments or perform their operational or other obligations to AOSC in compliance with the terms of contractual arrangements between AOSC and such counterparties and the possible consequences thereof; the potential lack of available drilling equipment and limitations on access to AOSC's assets; aboriginal claims; seasonality; hedging risks; risks associated with establishing and maintaining systems of internal controls; insurance risks; claims made in respect of AOSC's operations, properties or assets; the potential for adverse consequences as a result of the change of control provisions in the PetroChina Transaction Agreements; competition for, among other things, capital, the acquisition of reserves and resources, export pipeline capacity and skilled personnel; the failure of AOSC or the holder of certain licenses or leases to meet specific requirements of such licenses or leases; risks arising from future acquisition activities; risks relating to the reliance on financial information, including that financial information does not reflect the added costs that AOSC expects to incur as a public entity; volatility in the market price of the common shares; the effect that the issuance of additional securities by AOSC could have on the market price of the common shares; incorrect assessment of the value of the Excelsior transaction; failure to realize the anticipated benefits of the Excelsior transaction; and risks relating to AOSC's dividend policy. In addition, information and statements in this News Release relating to "reserves" and "resources" are deemed to be forward-looking information and statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. The assumptions relating to AOSC's reserves and resources are contained in the reports of GLJ Petroleum Consultants Ltd. dated effective April 30, 2010 and DeGolyer and MacNaughton Canada Limited dated effective April 30, 2010. The risks and uncertainties referred to above are described in more detail in AOSC's prospectus dated March 30, 2010 and in AOSC's Statement of Oil and Gas Reserves Data and Other Oil and Gas Information for the Year Ended December 31, 2009, each of which is available on the SEDAR website at www.sedar.com.  See also AOSC's press release issued on June 9, 2010 and its material change report dated June 18, 2010.  Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. The forward-looking statements included in this News Release are expressly qualified by this cautionary statement. AOSC does not undertake any obligation to publicly update or revise any forward-looking statements except as required by applicable securities laws.

For further information:

Heather Douglas
Vice President, Communications & External Affairs
[phone]
[email protected]