CALGARY, Alberta, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) ("Athabasca” or the "Company”) is pleased to report its third quarter results highlighting strong free cash flow underpinned by operational momentum at all assets and continued execution on its return of capital commitment through share buybacks.

Corporate Consolidated Third Quarter Highlights

• Production: Average production of 38,909 boe/d (98% Liquids), representing 8% growth year over year (16% on a per share basis). Annual production remains on track with previously increased 2024 guidance of 36,000 - 37,000 boe/d.
• Cash Flow Growth: Adjusted Funds Flow of $164 million (cash flow from operating activities of $187 million) or $0.30 per share, representing 25% growth on a per share basis year over year. In 2024, the Company forecasts Adjusted Funds Flow of ~$555 million¹, supported by increased operating scale and constructive Canadian heavy oil pricing. Athabasca forecasts ~100% growth in 2024 forecasted funds flow per share relative to 2022 when growth to 28,000 bbl/d at Leismer was sanctioned.
• Differentiated Balance Sheet: Proactively refinanced the Company's senior secured second lien Notes with $200 million of senior unsecured notes at a 6.75% coupon with a 2029 maturity. Consolidated Net Cash position of $135 million with Liquidity of $456 million, including $335 million in cash.
• Resilient Producer: Competitively positioned with Thermal Oil sustaining capital to hold production flat funded within cash flow at ~US$50/bbl WTI¹ and growth initiatives fully funded within cash flow at ~US$60/bbl WTI¹.
• Robust Free Cash Flow: Capital flexibility and balance sheet strength supports durable asset growth and return of capital initiatives for shareholders, resulting in continued top tier cash flow per share growth into the future. Athabasca expects to generate in excess of $1 billion of Free Cash Flow at US$70/bbl WTI¹ after fully funding its growth program during the timeframe of 2024-27. The Company intends to release its 2025 capital budget in December.

• Cumulative Return of Capital of ~$800 million. Commencing in the Fall of 2021 a deliberate strategy prioritized $385 million of debt reduction. Share buybacks commenced in 2023 and have totaled $415 million to date.
• 2024 Return of Capital Commitment: Athabasca (Thermal Oil) is allocating 100% of Free Cash Flow to share buybacks in 2024. Year to date the Company has completed $257 million in share buybacks and forecasts 2024 Free Cash Flow of ~$315 million¹.
• Focus on Per Share Metrics: A steadfast commitment to return of capital has driven an ~104 million share reduction (~16%) in the Company's fully diluted share count since March 31, 2023.

• Production: ~34,900 bbl/d supported by growth at Leismer (record quarter at ~27,500 bbl/d) and stability at Hangingstone (~7,400 bbl/d).
• Cash Flow: Adjusted Funds Flow of $150 million with an Operating Netback of $49.68/bbl.
• Capital Program: $44 million of capital focused on sustaining operations at Leismer and Hangingstone. 2024 capital program forecast of ~$195 million including the commencement of progressive growth to 40,000 bbl/d at Leismer. The Company is currently drilling four new well pairs and six redrill opportunities at Leismer with production expected in early 2025. Two new well pairs at Hangingstone (1,400 meter laterals) will begin steaming in late November with production expected in early 2025.
• Free Cash Flow: $106 million of Free Cash Flow supporting return of capital commitments.

• Production: ~4,100 boe/d (77% Liquids) supported by production from two new pads placed on production in the spring. Results continue to support management's type curve expectations with restricted IP180s/well averaging ~840 boe/d (82% Liquids) on the 2-well 100% working interest ("WI”) pad and IP120s/well averaging ~835 boe/d (85% Liquids) on the 3-well 30% WI pad.
• Cash Flow: Adjusted Funds Flow of $14 million with an Operating Netback of $44.20/boe.
• Capital Program: $6 million focused on commencing a 3-well 100% WI pad at 04-18-64-16W5 which spud in early September. The first two wells have been cased with lateral lengths averaging ~4,000 meters per well. The pad is expected to be completed in 2025. The 2024 capital program forecast is ~$75 million, fully funded within cash flow and cash on hand in DEC.

• Value Creation: The Company's Thermal Oil division provides a differentiated liquids weighted growth platform supported by financial resiliency to execute on return of capital initiatives. Athabasca's subsidiary company, Duvernay Energy Corporation, is designed to enhance value for Athabasca's shareholders by providing a clear path for self-funded production and cash flow growth in the Kaybob Duvernay resource play. Athabasca (Thermal Oil) and Duvernay Energy have independent strategies and capital allocation frameworks.
• Consolidated Free Cash Flow Growth: Athabasca's capital allocation framework is designed to unlock shareholder value by prioritizing multi‐year cash flow per share growth. In 2024, Athabasca forecasts Corporate Consolidated Adjusted Funds Flow of ~$555 million or ~$1 per share, representing ~100% per share growth over 2022 when the Company sanctioned growth to 28,000 bbl/d at Leismer. The Company's outlook targets ~20% net Adjusted Funds Flow per share compound annual growth rate during the three-year time to 2027².

• Large Resource Base: Athabasca's top-tier assets underpin a strong Free Cash Flow outlook with low sustaining capital requirements. The long life, low decline asset base includes ~1.2 billion barrels of Proved plus Probable reserves and ~1 billion barrels of Contingent Resource.
• Strong Financial Position: Prudent balance sheet management is a core tenet of Athabasca's strategy. During the quarter, Athabasca issued $200 million 6.75% senior unsecured notes due in 2029 and redeemed US$157 million 9.75% senior secured second lien notes due in 2026. The Company proactively refinanced its debt on attractive terms and maintains strategic flexibility with a Net Cash position.
• Capital Efficient Leismer Expansions: As previously announced, the Company has sanctioned expansion plans at Leismer for growth to 40,000 bbl/d. This will be completed utilizing a progressive build strategy that adds incremental production in the coming years with the full capacity to be achieved in 2028. The capital for this project is estimated at $300 million for a capital efficiency of ~$25,000/bbl/d. The Company can maintain 40,000 bbl/d for approximately fifty years (Proved plus Probable Reserves).
• Sustaining Hangingstone: Steaming on two new sustaining well pairs will occur later this year with first production expected in early 2025. These wells will support base production with the objective of ensuring Hangingstone continues to deliver meaningful cash flow contributions to the Company and maintaining competitive netbacks ($48.39/bbl Q3 2024 Operating Netback).
• Corner - Future Optionality: The Company's Corner asset is a large de-risked oil sands asset adjacent to Leismer with 351 million barrels of Proved plus Probable reserves and 520 million barrels Contingent Resource (Best Estimate Unrisked). There are over 300 delineation wells and ~80% seismic coverage, with reservoir qualities similar or better than Leismer. The asset has a 40,000 bbl/d regulatory approval for development with the existing pipeline corridor passing through the Corner lease. The Company has updated its development plans and is finalizing facility cost estimates. Athabasca intends to explore external funding options and does not plan to fund an expansion utilizing existing cash flow or balance sheet resources.
• Exposure to Improving Heavy Oil Pricing: With the start-up of the Trans Mountain pipeline expansion (590,000 bbl/d) in early May, spare pipeline capacity is driving tighter and less volatile WCS heavy differentials. Regional liquids pricing benchmarks have also been supported by a depreciating Canadian currency relative to the United States. Every US$5/bbl WCS change impacts Athabasca (Thermal Oil) Adjusted Funds Flow by ~$85 million annually.
• Significant Multi-Year Free Cash Flow: Inclusive of the progressive growth at Leismer, Athabasca (Thermal Oil) expects to generate in excess of $1 billion of Free Cash Flow at US$70 WTI¹ during the timeframe of 2024-27. Free Cash Flow will continue to support the Company's return of capital initiatives.
• Thermal Oil Royalty Advantage: Athabasca has significant unrecovered capital balances on its Thermal Oil Assets that ensure a low Crown royalty framework (~6%¹). Leismer is forecasted to remain pre-payout until late 2027¹ and Hangingstone is forecasted to remain pre-payout beyond 2030¹.
• Tax Free Horizon Advantage: Athabasca (Thermal Oil) has $2.4 billion of valuable tax pools and does not forecast paying cash taxes this decade.

• Accelerating Value: DEC is an operated, private subsidiary of Athabasca (owned 70% by Athabasca and 30% by Cenovus Energy). DEC accelerates value realization for Athabasca's shareholders by providing a clear path for self-funded production and cash flow growth without compromising Athabasca's capacity to fund its Thermal Oil assets or its return of capital strategy.
• Kaybob Duvernay Focused: Exposure to ~200,000 gross acres in the liquids rich and oil windows with ~500 gross future well locations, including ~46,000 gross acres with 100% working interest.
• Self-Funded Growth: Current activity is being funded within cash flow and cash on hand. The 2024 program includes drilling and completions of a two-well 100% WI pad and a three-well 30% WI pad along with the spudding an additional multi-well pad in September 2024. The Company has self-funded growth potential to in excess of ~20,000 boe/d (75% Liquids) by the late 2020s¹.

¹ Pricing Assumptions: realized prices January - October and flat pricing of US$70 WTI, US$12.50 WCS heavy differential, C$2 AECO, and 0.73 C$/US$ FX for the balance of 2024. 2025-27 US$70 WTI, US$12.50 WCS heavy differential, C$3.00 AECO, and 0.75 C$/US$ FX.

² The Company's illustrative multi-year outlook assumes a 10% annual share buyback program at an implied share price of 4.5x EV/Debt Adjusted Cash flow in 2025 and beyond.

Financial and Operational Highlights