Athabasca Oil Corp T.ATH

Insider Buying

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Always a good sign. GLTA

June 6, 2023

Morning Report: Insiders buy the Athabasca Oil share price dip again

This week we are aiming to demonstrate that there is more to opportunity in the equity markets than AI stocks. As we discussed in our June 5th market update, Canadian insiders continue to bet with conviction that selected resource plays offer the potential to deliver some hefty returns in the years ahead. With that in mind, we are looking for cases where insiders are buying shares that are in an uptrend on the back of investor excitement. Athabasca Oil (ATH) is a relatively rare example in the oil patch where the stock is in the top 10% of our rankings, helped by both insider buying and upward relative price momentum. Most stocks in the Energy sector that hit our radar have been lagging the broad market and offer potential contrarian setup situations. Athabasca has advanced 23.7% year-to-date as of Friday, outperforming the S&P 500, up 11.5%. Although the stock is down about 11% since we last featured it here on April 10th, insiders have bought the pullback, just as they did in March.

Athabasca Oil reported Q1 production of 34,683 barrels of oil per day. Its Q1 operating income was $57 million, with $42 million from thermal (heavy) oil and $15 million from light oil. The capital program for the year remains at $145 million. They maintained their annual production guidance of 34,500 to 36,000 boe/d with about 30,000 boe/d being heavy oil. Looking ahead, the company expects favourable Western Canada Select heavy oil differentials following the expected start-up of the Trans Mountain Pipeline Expansion project in 2024 which will facilitate seaborne deliveries of Canadian crude. Athabasca plans to allocate a minimum of 75% of excess 2023 cash flow (defined as adjusted funds flow less sustaining capital) to shareholders through share buybacks.