Alberta Oilsands Inc. Responds to Smoothwater Capital Corporation and Announces Postponement of Annual General Meeting

CALGARY, ALBERTA--(Marketwired - Aug. 23, 2016) -

NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Alberta Oilsands Inc. ("AOS" or the "Corporation") (TSX VENTURE:AOS) wishes to clarify certain allegations made by Smoothwater Capital Corporation ("Smoothwater"), as well as provide an update on the annual general meeting of the Corporation originally scheduled for September 23, 2016.

SMOOTHWATER ALLEGATIONS

On August 21, 2016, Smoothwater issued a press release expressing their disapproval of the Corporation's acquisition of Marquee (the "Smoothwater Press Release"). In that press release Smoothwater made a number of inaccurate and inappropriate comments and allegations that AOS wishes to correct.

1. Incorrect allegations that a shareholder vote is mandated by law

Smoothwater seeks to rewrite Canadian corporate law to serve its own purposes. The proposed transaction with Marquee involves a plan of arrangement of Marquee and Marquee shareholders, where AOS will issue 1.67 AOS shares for each Marquee share outstanding. Under the proposed transaction, AOS is an issuer of shares and not the party being arranged, which is Marquee. Neither the Business Corporations Act (Alberta) nor any other Canadian corporate law requires a shareholder vote for an acquiror issuing shares in such a transaction, contrary to what Smoothwater has alleged.

In certain circumstances, public companies may be required by applicable stock exchanges to seek a shareholder vote, such as where the transaction results in a new control person being created. Those circumstances do not exist in the proposed transaction. AOS has had discussions in good faith, with full disclosure of all material information (including Smoothwater's opposition to any value-generating transaction) with applicable regulators prior to announcing the proposed transaction in arriving at the conclusion that an AOS shareholder vote is not required.

2. Comments attributed to the CEO and Chairman of AOS regarding holding a shareholder vote

In the Smoothwater Press Release, Smoothwater blatantly stated that the Chair and CEO of AOS had stated that any transaction with Marquee would be taken to AOS shareholders for approval. This is not true. Smoothwater neglected to disclose that discussions between AOS and Smoothwater were held prior to the announcement of the proposed transaction for the express purpose of AOS negotiating a confidentiality agreement with Smoothwater to discuss in detail the proposed transaction. As such negotiations continued, it became apparent to AOS that Smoothwater was only purporting to entertain the prospect of entering into a confidentiality agreement for the purpose of securing contractual terms that would amend the legal requirements applicable to any transaction, would reimburse Smoothwater for its costs at the expense of AOS and other shareholders, and would provide Smoothwater with a right to pre-disclose AOS' negotiations with Marquee, thereby putting a value-generating transaction at risk. As a result, AOS had no option but to cease negotiations with Smoothwater as terms of a mutually satisfactory confidentiality agreement could not be reached.