Athabasca Oil Sands Corp. Announces Filing of 2011 First Quarter Financial Statements

CALGARY, May 12 /CNW/ --
CALGARY, May 12 /CNW/ - Athabasca Oil Sands Corp. (TSX:  ATH) has filed
its financial statements and management's discussion and analysis
(MD&A) for the first quarter ended March 31, 2011.  These documents can
be retrieved electronically from SEDAR (www.sedar.com) and from Athabasca's website (www.aosc.com).

Athabasca Updates 2011 Activities

In Athabasca's first quarter, the company successfully completed its
2010-2011 winter drilling program, filed a regulatory application for a
12,000 barrels/day steam assisted gravity drainage (SAGD) project at
Hangingstone and acquired key additional petroleum and natural gas
(P&NG) rights in the Deep Basin area of northern Alberta.

According to Bill Gallacher, Athabasca's chair of the board of
directors, the company's fundamental business strategy is to explore
and produce its various oil properties to take advantage of high prices
as global demand and usage continues to climb. This is expected to give
shareholders an excellent return on their investment in the short and
long-term.

'Oil remains the dominant energy commodity,' Gallacher says. 'Athabasca
believes the unconventional riches of Alberta's oil sands will both
enhance the world's energy security and play an increasingly important
role in setting the global oil price for the next four to five
decades.  The company recently purchased more than 1.0 million acres of
prospective Deep Basin light oil properties, an area from which the
company could begin producing and selling light oil later this year.
Both strategies will require on-going capital discipline and prudent
risk-taking.'

Completed Successful Winter Drilling Season (2010-2011)

Athabasca's bitumen assets are core to the company.  During the quarter,
it drilled a total of 89 delineation and 38 water wells.  Initial
results look promising.

The drilling program included several wells designed to perform two
tests in the Dover West Leduc carbonate formation:  a slanted well
where steam was injected to assess steam behaviour within the
reservoir, two horizontal wells to test heat conductive heating
behaviour using thermal assisted gravity drainage (TAGD) with four
associated observation wells.

Athabasca injected quantities of steam into the highly-fractured
reservoir and observed that a good steam chamber was formed.  The
company's initial conclusion is that SAGD remains a viable option to
heat the bitumen in this formation, which management believes is good
news.

It also drilled the horizontal pair for the TAGD test, inserted mineral
insulated cable into the wellbores and turned the heaters on to heat
the reservoir for six to 10 months.  The company expects to turn the
lower well into a producer this fall or early winter.

'If successful, TAGD could be the key to producing bitumen carbonate
reefs globally,' says Sveinung Svarte, Athabasca's president and CEO.
'These types of reservoirs could be heated at lower temperatures, thus
needing less energy and potentially saving significant operating
costs.'

In addition to further steam tests, Athabasca anticipates applying for a
TAGD pilot of up to 12,000 barrels/day in late 2011 with a view to
obtaining regulatory approval in late 2012 or early 2013.  Construction
would commence shortly thereafter with startup in late 2013 or early
2014.

Athabasca drilled 22 delineation wells in the Birch area, the company's
largest asset in net acreage with approximately 470,000 acres of
contiguous land containing 1.15 billion barrels of contingent resource
(best estimate).  The preliminary drilling results looked positive so
management requested the regulatory group begin preparation of a
commercial application and environmental impact assessment (EIA).

Filed Hangingstone Project Application (100%)

On March 31, 2011 Athabasca filed its regulatory application to
construct a 12,000 barrels/day SAGD project at Hangingstone, located
about 20 kilometres southwest of Fort McMurray.  This is expected to be
the company's first wholly-owned oil sands production with first steam
anticipated as early as the fourth quarter of 2013.

'Athabasca is very proud of the team which put together the regulatory
package,' Svarte reports.  'We expected the application to be filed in
the second quarter and they managed to submit it in the first quarter.'

The Hangingstone asset consists of 110,000 net undeveloped acres with a
currently identified contingent resource base of 752 million barrels
(best estimate) capable of supporting the development of a commercial
project of approximately 80,000 barrels/day.  Production would be
marketed as bitumen blend.

With the application filed, Athabasca now plans to continue engineering
and begin the procurement process for long-lead time equipment.  After
regulatory approval is received, anticipated sometime in 2012, road
construction, site preparation and drilling will commence.  The company
expects to drill 25 well pairs of injectors and producers, along with a
number of observation wells from well pads.  The construction is
anticipated to be completed in 2013 followed by commissioning of the
facilities and start-up.

Purchased Acreage in Deep Basin (100%)

In its pursuit of prospective light oil, Athabasca acquired more acreage
in one of Western Canada's hottest exploration plays in the Deep Basin
area, in northwestern Alberta.  The company is interested in several
formations - the Duvernay, Montney, Doig, Nordegg and Wilrich. 
Additional evaluation work continued in this area during the first
quarter, 2011.

Svarte says the company is encouraged by early analysis of this program.
'The Deep Basin region appears to contain sizeable resources of light
oil, which could underpin a substantial increase in Canadian production
and exports during the next 20 years.'

Looking Forward

Athabasca's significant contingent resource base creates an opportunity
for joint ventures with companies that can afford large expenditures,
have the technical expertise to create even better projects and can
help accelerate commercial development.  Company executives continue to
talk with potential joint venture companies to further de-risk
Athabasca's undeveloped barrels of bitumen.

'Athabasca continues to deliver on its promises,' Svarte reports.  'It
offers investors high leverage to oil prices because of its large
resource base and long life assets.  We expect to continue unlocking
more bitumen and light oil resources in 2011.'

Athabasca is a dynamic company focused on the development of oil
resource plays including Athabasca bitumen and Deep Basin light oil in
Alberta, Canada. It was incorporated in 2006 with a goal to use the
latest technology to produce crude oil and bitumen in a sound and safe
manner. It has excellent assets, talented people and is well financed. 
It is traded on the TSX under the symbol ATH.

NOTE TO ANALYSTS AND EDITORS:

Sveinung Svarte will present Athabasca's updated story with a live
webcast presentation at:


Raymond James New York Conference


Monday, May 16, 2011 9:30 - 9:50 AM EST (Q&A to follow)


To listen and view this online event, please visit: http://wsw.com/webcast/rj66/athof/.


It will be available in an archived link for 30 days following at this
site.


The presentation will also be available at www.aosc.com.

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 estimated future commitments; proposed experimental
testing in the Dover West area and the results there from; business
plans;; AOSC's plans with respect to the Birch and Grosmont 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: 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 in the Company's
Annual Information Form dated March 28, 2011, which is available on the
SEDAR website at www.sedar.com ('AIF'), including: fluctuations in market prices for crude oil and
bitumen blend; general economic, market and business conditions;
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'),
Thermal Assisted Gravity Drainage ('TAGD') and other bitumen recovery
processes; the potential impact of the exercise of the Put/Call Options
(as defined in the AIF) on AOSC; failure to meet development schedules
and potential cost overruns; increases in operating costs can make
projects uneconomic; the effect of diluent and natural gas supply
constraints and increases in the costs thereof; gas over bitumen issues
affecting operational results;; 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, TAGD 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
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. 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 December 31, 2010
and  DeGolyer and MacNaughton Canada Limited dated effective December
31, 2010. The risks and uncertainties referred to above are described
in more detail in AOSC's AIF and in AOSC's Statement of Oil and Gas
Reserves Data and Other Oil and Gas Information for the Year Ended
December 31, 2010, each of which is available on the SEDAR website at www.sedar.com.  See also AOSC's financial statements and Management's Discussion and
Analysis for the year ended December 31, 2010, which is also available
on SEDAR. 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.

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