Athabasca Oil Corp T.ATH

Alternate Symbol(s): ATHOF

Energy Oil & Gas E&P

Athabasca Oil Corporation (AOC) is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. AOC’s segments include Light Oil and Thermal Oil. The Thermal Oil segment includes the Company’s assets, liabilities and operating results for the exploration, development and production of bitumen from sand and carbonate rock formations located in the Athabasca region of Northern Alberta. It also consists of two operating oil sands steam assisted gravity drainage projects and a resource base of exploration areas in the Athabasca region of northeastern Alberta. The Light Oil segment includes its assets, liabilities and operating results for the exploration, development and production of light crude oil and medium crude oil, tight oil and conventional natural gas. Its Light Oil segment consists exclusively of the Duvernay in the Greater Kaybob area with about 155,000 gross acres across Kaybob West, Kaybob North, Kaybob East and Two Creeks.

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Athabasca Oil Corp > On a more positive note

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Comment by ComradeKomissaron Oct 29, 2021 11:26am

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Post# 34063452

RE:On a more positive note

Thanks Max.

I had bookmarked an earlier, more detailed analysis of yours from way back, so people can see how you come up with $3. I am quoting it below.

The problem is that "4 x" multiple assumption. We are in a time of multiple "compression" as Nuttsac keeps saying. I sure hope we get back to normal (4x) multiples soon.

Some fun with math

I had some time this aft so I checked Eric's math he used for his targets and valuation of ATH. Spoiler alert! I think he's being conservative. I assume his data was as of the prior day's close, not up to the instant he spoke. So the raw data is SP=51, o/s=530mm,mkt cap= 270mm, Debt @dec 30 = 859, cash = 165, net debt = 694mm. EV = 270+694= 964mm
now for the fun part. He said at $60 oil his target is 0.93 using a 4x EV/CF multiple and at $70 oil his target is $1.91. So, using the $60 oil deck, and his target of .93, and net debt of 694, and EV of .93x530+694= EV target 694+493=1187 I solve for X and cash flow is 1187\4=$297. Okay, now I'm going to assume the capex constraints are still on and half that cash flow, let's say $150 is used to reduce the net debt from 694 to 544. If EV stays at 1187, the solution is mkt cap raises from 493 to 643. That's a target of not a mere 0.93, but 643/530= $1.21 aka another DOUBLE.
Using his $70 oil price assumption, and plugging in all the same data, I get cash flow increasing from 297 to 427 using his same implied 4x EV/CF, EV is now 4x 427=1708. Now if I can assume, again, that half the cash flow say 213 reduces net debt from 694 to 481, the market cap increases to 1708-481=1227. That my fellow shareholders is a target of 1227\530 = $2.32 aka I'm rounding a 4 BAGGER!

im going to add my own assessment as "AT LEAST". 4x multiple is still REALLY cheap if the oil sector sentiment continues to improve and/or a few more M&A deals get done. 6x or pie in the sky 8x multiples are possible. 8x means at $70 oil using Eric's data, a target of 8x427=3416 EV less net debt of 481= 2935 over 530 shares o/s = $5.54. That's a lot of pie in that there sky.