ATHABASCA OIL SANDS CORP. ANNOUNCES AGREEMENT TO ACQUIRE EXCELSIOR ENERGY
LIMITED

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Sept. 13 /CNW/ - Athabasca Oil Sands Corp. (TSX: ATH) (AOSC) and Excelsior Energy Limited (Excelsior) (TSXV: ELE) are pleased to announce they have entered into an arrangement agreement whereby AOSC will acquire all of the issued and outstanding common shares ("Excelsior Shares") of Excelsior (the "Transaction") by way of Plan of Arrangement under the Business Corporations Act (Alberta).

Under the Transaction, Excelsior's shareholders will receive, for each Excelsior Share held, at the election of the holder, either (i) $0.36 cash; or (ii) 0.0347 of a common share of AOSC ("AOSC Shares"). Holders of Excelsior common share purchase warrants ("Excelsior Warrants") who do not exercise their Excelsior Warrants prior to closing of the Transaction will exchange their Excelsior Warrants for warrants to purchase AOSC Shares based on the same ratio applied to the Excelsior Shares, and expiring on the second anniversary of the closing of the Transaction. Excelsior currently has 281,175,755 Excelsior Shares outstanding and 104,165,666 Excelsior Warrants outstanding at exercise prices ranging from $0.30 to $0.32 per Excelsior Share.

The equity value of the transaction is approximately $144 million on a fully diluted basis, with an attributed value to Excelsior's oil sands assets and proprietary technology of approximately $89 million. The Boards of Directors of both AOSC and Excelsior have unanimously approved the Transaction. All of the directors and officers of Excelsior, and certain significant Excelsior security holders beneficially owning or controlling an aggregate of approximately 19% of the Excelsior Shares on a non-diluted basis, and 44% of the Excelsior Warrants, have agreed to vote their securities in favour of the Transaction.

Sveinung Svarte, president and CEO of AOSC says, "The addition of Excelsior's high quality assets to those of AOSC at Hangingstone is in line with the strategy we have presented to our investors and creates a world-class, stand-alone project. The Transaction will result in a project of critical size and an accelerated development of the area. It also gives us ownership of their proprietary COGD (Combustion Overhead Gravity Drainage) technology."

Dr. David Winter, president and CEO of Excelsior commented, "Our asset base, centred around the Hangingstone property is a great fit with AOSC's current high quality oil sands assets, which have tremendous upside potential. We believe this Transaction provides for a more efficient development of the consolidated Hangingstone project and allows Excelsior's shareholders to benefit from the upside potential in a strong, well financed oil sands focused company."

Highlights of the Transaction

Through the Transaction, AOSC is acquiring concentrated, high quality oil sands leases at Hangingstone and West Surmont, and consolidating AOSC's current acreage position in the Hangingstone area. The acquisition of Excelsior is consistent with AOSC's strategy of amassing a suite of large, critical sized assets which provide optimal long-term development potential for AOSC. The key attributes of Excelsior include:

    
    -   Contingent resources of approximately 183 MMbbls (best estimate) (1);

    -   Net cash of approximately $25 million (prior to exercise of any
        Excelsior stock options or Excelsior Warrants);

    -   Approximately 26,607 net undeveloped acres of land on two contiguous
        blocks in the Hangingstone and West Surmont areas of the Athabasca
        oil sands region;

    -   Operatorship, with high working interests of 75% at Hangingstone and
        64.3% at West Surmont; and

    -   Patent for the Combustion Overhead Gravity Drainage (COGD)
        proprietary technology; project approval for a 1,000 bbl/d
        experimental pilot is expected in the latter half of 2010 with
        subsequent implementation and commissioning in early 2011.

    (1) Estimate of contingent resources as per the McDaniel & Associates
        report as at December 31, 2009 for Hangingstone and the McDaniel &
        Associates report as at December 31, 2008 for West Surmont.
    

Following the closing of the Transaction, AOSC will have 113,007 net undeveloped acres of land in the Hangingstone area. The combined Hangingstone acreage allows for both potential independent development by AOSC, as well as potential joint venture development opportunities.

Details of the Arrangement

The Transaction will be completed pursuant to a plan of arrangement which requires the approval of at least two-thirds of the votes cast by Excelsior securityholders at a special meeting to be called to consider the Transaction along with customary regulatory, court and other approvals. An Information Circular outlining the Transaction is expected to be mailed to Excelsior security holders in early October 2010, with the meeting anticipated to take place in early November 2010, with closing to follow shortly thereafter.

The arrangement agreement provides that Excelsior will pay AOSC a non-completion fee of $4 million in certain circumstances. The arrangement agreement also provides for, among other things, customary non-solicitation covenants and that AOSC has the right to match any such superior proposal.

Board Approvals

The Boards of Directors of both AOSC and Excelsior have unanimously approved the Transaction. The Board of Directors of Excelsior has concluded that the Transaction is in the best interests of Excelsior and its security holders and has resolved to recommend that Excelsior security holders vote their Excelsior Shares and Excelsior Warrants in favour of the Arrangement.

Financial Advisors

GMP Securities Limited and Peters & Co. Limited acted as exclusive financial advisors to AOSC in respect of the Transaction.

CIBC World Markets Inc. and Raymond James Ltd. acted as exclusive financial advisors to Excelsior in respect of the Transaction. CIBC World Markets Inc. has provided an opinion to the Board of Directors of Excelsior to the effect that, as of the date thereof and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by Excelsior Shareholders pursuant to the Transaction is fair, from a financial point of view, to Excelsior Shareholders.

About AOSC

AOSC is a dynamic, young 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. AOSC Shares are listed on the Toronto Stock Exchange under the trading symbol ATH. AOSC has a current market capitalization of approximately $4 billion, net working capital of more than $1.9 billion, as of June 30, 2010.

About Excelsior

Excelsior is an early stage, oil sands company, with 58 operated sections on two contiguous blocks in the Hangingstone and West Surmont areas of the Athabasca Oil Sands Region near Fort McMurray, Alberta. The properties contain high-quality, bitumen reservoirs. The company has also developed a proprietary in situ combustion technology (Combustion Overhead Gravity Drainage or COGD) which has potential to improve economic and environmental impact in the development and recovery of heavy oil and bitumen. Excelsior shares are listed on the TSX Venture Exchange under the trading symbol ELE.

Reader Advisory

This News Release contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. 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 information. Information in this News Release relating to "reserves" and "resources" are deemed to be forward-looking information, 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 forward-looking information is not historical fact, but rather is based on AOSC's and Excelsior's current plans, objectives, goals, strategies, estimates, assumptions and projections about industry, business and future financial results. This information involves 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 information. No assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon. This information speaks only as of the date of this News Release. In particular, this News Release contains forward-looking information pertaining to expectations of management regarding the proposed Transaction, including the timing of completion of the Transaction and the terms thereof, operating and financial metrics of the Transaction, potential benefits resulting from the Transaction; operational and business plans subsequent to the Transaction; and the pro-forma effect of the Transaction on AOSC's resources and undeveloped land position. With respect to such forward-looking information, assumptions have been made regarding, among other things: the completion of the Transaction on the terms and on the schedule outlined above; ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters; the applicability of technologies for the recovery and production of reserves and resources; capital expenditures; sources of funding; future debt levels; geological and engineering estimates in respect of reserves and resources; and the geography of the companies' operating areas. Actual results could differ materially from those anticipated in this forward-looking information as a result of, among other things, the following: the Transaction may not close when planned or at all or on the terms and conditions set forth herein; the failure of AOSC and Excelsior to obtain the necessary security holder, Court, regulatory and other third party approvals or satisfy the other conditions to proceed with the Transaction; incorrect assessment of the value of the Transaction; failure to realize the anticipated benefits of the Transaction; fluctuations in commodity prices and foreign exchange and interest rates; general economic, market and business conditions; dependence on joint venture partners and the terms of joint venture arrangements; variations in; factors affecting potential profitability; uncertainties inherent in estimating quantities of reserves and resources; uncertainties inherent in bitumen recovery processes; delays in development schedules and potential cost overruns; increases in operating costs making projects uneconomic; the effect of diluent and natural gas supply constraints and increases in the costs thereof; gas over bitumen issues; environmental risks and hazards and the cost of compliance with environmental regulations; failure to obtain or retain key personnel; substantial capital requirements; failure to obtain regulatory approvals or maintain compliance with regulatory requirements; compliance with, government laws and regulations and the effect of changes in such laws and regulations; changes to royalty regimes; political risks; failure to accurately estimate abandonment and reclamation costs; risks inherent in oil sands 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 in-situ technologies; the potential for management or third party estimates and assumptions to be inaccurate; long term reliance on third parties and third party infrastructure; failure by counterparties; availability of drilling equipment and access to company assets; aboriginal claims; seasonality; hedging risks; insurance risks; potential litigation; competition; failure to meet specific requirements to maintain licenses or leases; risks arising from future acquisition activities including failure to realize the anticipated benefits of acquisitions.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of AOSC or Excelsior, as well as information respecting the significant assumptions relating to AOSC's and Excelsior's reserves and resources, are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

The forward-looking information in this News Release is expressly qualified by this cautionary statement. Neither AOSC nor Excelsior undertakes any obligation to publicly update or revise any forward-looking information except as required by applicable securities laws.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information: Athabasca Oil Sands Corp., Sveinung Svarte, President and Chief Executive Officer, Tel: [phone], Email: [email protected]; or Heather Douglas, Vice President, Communications & External Affairs, Tel: [phone], Email: [email protected]; Excelsior Energy Limited, Dr. David Winter, President and Chief Executive Officer, Tel: [phone], Email: [email protected]; Mary Kennedy, Vice President, Finance & CFO, [phone] (Ext 103), Email: [email protected]