Athabasca Oil Corp T.ATH

C$200 Million Unsecured Notes Offering T.ATH

[Betteryear2]

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

CALGARY, Alberta, July 29, 2024 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) announced today that it has entered into an underwriting agreement to sell at par, pursuant to a private placement (the “Offering”), $200 million senior unsecured notes due 2029 (the “Notes”) which bear interest at 6.75% per annum. Closing of the Offering is anticipated on or about August 9, 2024.

Athabasca Oil Corporation Announces a C$200 Million (globenewswire.com)

[Franklin80]

What does this mean to share price tomorrow? GLTA

[BLACKJACK86]

it can only be good in my opinion, if only oil can stop its descent , that would help also. less debt less interest expenses, the market will like that.

[matt2018]

all good..... debt balance of $200M CDN replaced with new debt at 3% cheaper rate. The $300M in cash, more than enough to fund Leismer expansion from 28k to 40K (over 3 yrs), while they keep the share buybacks going with the FCF from the business. Duvernay now close to 4k boe/d with plan to self fund to 20k boe/d in appr 5 yrs. You get two energy plays/companies here, rolled into one! Oil price

[cahclick]

  Here's a cut and paste from their Q2 report . . . "Cash Flow: Adjusted Funds Flow of $149 million with an Operating Netback of $52.59/bbl. Athabasca (Thermal Oil) expects to generate $1.4 billion of Free Cash Flow1 during the timeframe of 202427." If they're going to generate $1.4 billion of FCF, why borrow $200 million ? They already have enough cash to pay out

[matt2018]

Understand your point but the cash flow projection of the $1.4B ('24-'27) is based on $80 Oil, $12.50 WCS heavy differential, etc. If you use the $300M to pay off the $200M, then you cant expand Leismer and keep the share buyback going at same time in lower oil price world. Also keep in mind, they put cash into seed money for Duvernay partnership/drilling. $200M cdn at 6.75% total debt is

[cahclick]

  Thanks for explaining

[BLACKJACK86]

Good explanation Matt , I like your post , always some good info .