2021 Third Quarter Results CALGARY, Alberta, Nov. 03, 2021 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to report its 2021 third quarter results. Record financial results during the quarter, including $57 million of Free Cash Flow, demonstrate the quality of Athabasca’s asset base and unique positioning in the current oil price environment.
Q3 Highlights
- Production: ~34,250 boe/d including ~26,700 bbl/d in Thermal Oil and ~7,500 boe/d in Light Oil.
- Record Operating Income: $121 million ($36/boe) driven by strong oil prices and 90% Liquids weighting. Record Operating Netback of $36/bbl in Thermal Oil.
- Capital Expenditures: $16 million focused on high-value Leismer projects to sustain production.
- Record Funds Flow: Adjusted Funds Flow of $72 million ($0.14 per share) and Free Cash Flow of $57 million.
Recent Operational Highlights
- Leismer: Current production of ~19,000 bbl/d has been supported by the tie-in of the L6 infills and an additional well pair on Pad L7. Pad L8 commenced steaming in October, with first oil expected in early 2022. The five well pairs are anticipated to ramp-up to >5,000 bbl/d in mid-2022.
- Hangingstone: Expanded NCG co-injection has supported field pressure management with current production of ~9,000 bbl/d. Optimization projects have yielded a significantly lower cost structure driving a $33/bbl Operating Netback in Q3.
- Light Oil: Focused on free cash flow generation with continued strong Operating Netback of $37/boe.
- Carbon Capture (CCUS): Continuing to advance a scoping study with Entropy Inc. to determine feasibility of a carbon capture at Leismer with ongoing evaluation of local storage and carbon trunkline options.
2021 Guidance and Outlook (Strip Pricing October 4)1
- Production: increased annual guidance to ~34,250 boe/d (previously 32,000 – 34,000 boe/d).
- Capital: an unchanged ~$100 million annual capital program primarily directed towards Leismer.
- Financial: Adjusted EBITDA ~$255 million; ~$190 million Adjusted Funds Flow; ~$90 million Free Cash Flow.
- Balance Sheet: Resilient and refinanced balance sheet with no term debt maturities until Q4 2026 and strong liquidity of ~$265 million, including ~$195 million cash (2021e year-end).
- Compelling Leverage Metrics: Net Debt to Adjusted EBITDA of ~0.8x (2021e year-end). The Company anticipates being in a net cash position in 2023.
- 2022 Budget: Anticipated to be released in December. Activity will be focused on sustaining base production and maximizing free cash flow generation.
“Athabasca has taken deliberate steps to reposition the portfolio over the past number of years,” said Robert Broen, President and CEO. “The quarterly results and outlook validate the Company’s enviable position in the current environment. The recent balance sheet refinancing provides us significant strategic flexibility. We remain steadfast in our capital allocation priorities and have a clear path to net zero leverage in 2023. Reduced cash flow volatility, consistent operational execution and a best-in-class balance sheet is expected to unlock significant shareholder value through this period and beyond.”
Strategic Outlook
- Managing for Strong Free Cash Flow: Athabasca intends to maximize free cash flow while maintaining its production base. The Company forecasts >$600 million in Free Cash Flow (US$70 WTI & US$12.50 WCS differentials) during the 3-year timeframe of 2022 – 2024.
- Clear Debt Reduction Targets: The Company will direct at least 75% of future free cash flow towards achieving a total outstanding term debt reduction of US$175 million (50% reduction) while maintaining a strong liquidity position. The Company is targeting to achieve this target and to be in a net cash position in 2023. Debt reduction utilizing free cash flow, permitted under the new term note, will commence semi-annually with the first repayment in May 2022 (for the period Q4 2021 – Q1 2022).
- Maintain Annual Corporate Production: The portfolio of long reserve life assets under-pins a low corporate decline rate of ~10%. Athabasca requires low sustaining capital of ~$125 million annually to maintain production. The Company retains a large portfolio of future investment opportunities.
https://www.globenewswire.com/news-release/2021/11/03/2326963/0/en/Athabasca-Oil-Corporation-Announces-2021-Third-Quarter-Results.html