RE:RE:Re Shorts Royalty
Athabasca has granted Contingent Bitumen Royalties on its Thermal Oil assets. The Royalty structure ensures the Thermal Oil assets are not encumbered at low commodity prices. The Royalty on the Leismer and Hangingstone projects are based on a scale from 0% – 15% with a Western Canadian Select (“WCS”) heavy benchmark. At prices below US$60 WCS the rate is 0% (US$75 implied WTI assuming a US$15 WCS differential). The minimum 2.5% rate is triggered at US$60 WCS with a sliding scale up to 15% at US$100 WCS. The Royalty is applied to Athabasca’s realized bitumen price (C$), which is determined net of storage and transportation costs. Prior to 2021, no amounts were paid in respect of the Royalty to Burgess Energy Holdings, L.L.C. (“Burgess”). In the fourth quarter of 2021, as a result of the improved commodity prices, Athabasca paid $5.2 million in respect of the Royalty to Burgess.