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Press release from CNW Group

Athabasca Acquires 1.0 Million Acres of Prospective Oil and Liquids-rich Gas Play in Alberta's Deep Basin & Drilling Program Nearly Completed

Tuesday, March 08, 2011

Athabasca Acquires 1.0 Million Acres of Prospective Oil and Liquids-rich Gas Play in Alberta's Deep Basin & Drilling Program Nearly Completed06:00 EST Tuesday, March 08, 2011CALGARY, March 8 /CNW/ - Athabasca Oil Sands Corp. (TSX:  ATH) is pleased to announce it has acquired more than 1.0 million acres (100%) of petroleum and natural gas (P&NG) rights in the Deep Basin areas of northwestern Alberta. The lands were acquired through crown sales and from third-parties.Bill Gallacher, Athabasca's chair of the board, says this is a strategic opportunity for the company. "The Deep Basin area may lead to important early oil and natural gas liquids production while we are continuing the work to bring our oil sands projects on-stream."The company has approximately $1.8 billion in working capital (as of December 31, 2010). "This is an excellent way for Athabasca to use its cash until needed for our oil sands development," Gallacher reports. "This area offers the potential for a very short pay-back time and plans are to reinvest in Athabasca's oil sands assets."According to Sveinung Svarte, Athabasca's president and CEO, the acquisition of this new resource play is a tribute to the technical strength and excellent work of the company's geosciences department. "I am very proud of our team. During the past four drilling seasons they proved up approximately 12 billion barrels of contingent resource (best estimate) in the Athabasca oil sands in-situ area. This was before we divested about three billion barrels to Cretaceous Oilsands Holdings Limited, a subsidiary of PetroChina Company Limited."The recent acquisition is the result of the same team's continuous search for value in early stage oil development opportunities," Svarte adds. "This area contains several formations which are now successfully emerging as very prospective for production of oil and liquids-rich natural gas, with the combined application of horizontal drilling and multi-stage fracture technology. Several offset operators have drilled successful wells in the Duvernay, Montney, Doig, Nordegg and Wilrich formations, to name a few. We hope to do the same." The company's initial plan is to drill up to six horizontal wells this year to test several of the prospective formations. Athabasca is currently drilling its first of these six wells in the Deep Basin area and is optimistic it will be successful. These six wells, together with associated geological studies and development work, were included in the previously announced $302 million 2011 capital expenditure program and are projected to cost $40 million.Organizing Dedicated Asset TeamsAs it acquired the land, Athabasca also built a dedicated department of hand-picked professionals, each with extensive experience in oil and liquids-rich natural gas plays in the Western Canadian Sedimentary Basin."This committed team will be in charge of the exploration and development of Athabasca's acreage in the Deep Basin area," states Svarte. "This ensures our new area of interest does not compete for internal resources with our oil sands development projects.  Our employees have a 'well manufacturing mindset' to optimize the key learning from each well and drive efficiency and cost-control, while maintaining high standards of health, safety and environmental protection." Athabasca is organizing its activities into individual asset areas based on geographic location. Each asset has a dedicated team charged with the responsibility to develop and manage the resources in their area. "We expect that important synergies will emerge as key departments, such as drilling and geosciences, continue to collaborate and support the asset areas," says Svarte.Winter Drilling Program UpdateAthabasca also announces the winter drilling program (2010-2011) is close to completion and the results of its delineation wells seem to be in line with the company's ambitious expectations. Svarte says, "We are especially pleased with the drilling results in the Birch acreage, which we wholly own.  As a result, we anticipate the contingent resource figure will increase.  We have demonstrated bitumen saturated sands in two new areas within the Birch asset, located approximately 10 kilometres and 35 kilometres northwest of the existing contingent resource, within the central part of the Birch asset. "Athabasca is a dynamic company incorporated in 2006.  It has excellent assets, talented people and is well financed.  It is traded on the TSX under the symbol ATH and has a market capitalization of $7.4 billion.NOTE TO ANALYSTS AND EDITORS:Sveinung Svarte will present Athabasca's updated story with a live webcast presentation at:First Energy/Société Générale New York Energy ConferenceThursday, March 10, 2011 8:25 AM ESTTo listen and view this online event, please visit: will be available in an archived link for 30 days following at this site.The March 2011 Corporate Update presentation will also be available at AdvisoryThis 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", "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, including with respect to AOSC's new P&NG assets: capital expenditure programs; drilling plans; AOSC's plans for, and results of, exploration and development activities; estimated future commitments; business plans; AOSC's plans with respect to the Birch asset; and the expected benefits to be received by AOSC from its assets; 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: the 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 AOSC's reserves and resources; potential of emerging plays; anticipated costs; future capital expenditures; future sources of funding; 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; AOSC's transaction with Cretaceous Oil Sands Holdings Limited, a subsidiary of  PetroChina International Investments Company Limited; 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 ("Prospectus"), and including: fluctuations in commodity prices; general economic, market and business conditions; variations in foreign exchange and interest rates; factors affecting potential profitability; uncertainties inherent in estimating quantities of reserves and resources; AOSC's status and stage of development; uncertainties inherent in operations, including potential disruption or unexpected technical difficulties; AOSC's ability to generate sufficient cash flow from operations to meet its current and future obligations; Steam Assisted Gravity Drainage ("SAGD"), Cyclic Steam Stimulation ("CSS") and other bitumen recovery processes; failure to meet development schedules and potential cost overruns; increases in operating costs can make projects uneconomic; 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 and petroleum and natural gas 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; competition; the failure to meet specific requirements of such licenses or leases; and risks arising from future acquisition activities. 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 (403) 532-7408