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Athabasca Oil Corp T.ATH

Alternate Symbol(s):  ATHOF

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.


TSX:ATH - Post by User

Comment by ComradeKomissaron Jun 01, 2022 10:03am
216 Views
Post# 34722993

RE:RE:RE:Debt Repayment

RE:RE:RE:Debt Repayment Hi Max. Yes, according to the Notes 7/8 of the financials, one of the covenants of the debt contains a "cash sweep" provision which sweeps 75% of the FCF. They have to use at least 75% of FCF to pay the lenders at $1.05 on the dollar, and only in May and November, while the debt balance is greater than $175M. They can chose to use 100% of the FCF to pay them. They also have an option to pay down 1/3 of the balance at any time at $1.09 on the dollar.

So, in effect, 75% of "free" cash flow ain't actually "free" until debt hits below $175M. This is why the company guidance is "oh, we'll see what we can do once we hit that targed of $175M".  Technically, it's not the company's target. It's the lender's target.
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