Bullboard - Stock Discussion Forum Athabasca Oil Corp T.ATH

Alternate Symbol(s): ATHOF

Energy Oil & Gas E&P

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... see more

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Athabasca Oil Corp > RBC

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Post by retiredcf on Oct 31, 2024 9:17am

RBC

October 30, 2024

Athabasca Oil Corporation
3Q First Glance—In Line is Just Fine

TSX: ATH | CAD 5.08 | Sector Perform | Price Target CAD 5.50

Sentiment: Neutral

Athabasca Oil reported solid third-quarter results (see table below) punctuated by largely in-line adjusted FFO per share and production volumes vis-a-vis Street consensus.

Conference Call

Athabasca does not host a quarterly conference call.

Key Points

• Third-quarter production volumes of 38,900 boe/d (98% liquids) came in largely in-line with our estimate of 38,500 boe/d.

At Leismer, Athabasca reported record production volumes of 27,500 bbl/d (in-line with RBC at 27,500 bbl/d) amid bitumen realizations of $71.91/bbl (in-line with RBC at $71.58/bbl).
The company is planning to drill four sustaining well pairs at Pad L10 and six extended redrills off Pad L1 at Leismer, with production expected in early-2025. As announced with second-quarter results, Athabasca has sanctioned expansion growth plans to 40,000 bbl/d for $300 million ($25,000/bbl/d), progressively building incremental production up to full capacity by 2028.
Elsewhere, Athabasca’s production at Hangingstone sat at about 7,400 bbl/d (1% above RBC at 7,200 bbl/d) amid realizations of $79.80/bbl (5% above RBC at $76.18/bbl).
At Hangingstone, the company rig released two circa 1,400 metre sustaining well pairs with first steam planned for later this year and production in early-2025. Well design with extended reach laterals is expected to drive project capital efficiencies of around $15,000/bbl/d.
Athabasca’s capital spending in the quarter of about $51 million was approximately 16% below our outlook of $60 million.
On the shareholder returns front, Athabasca repurchased about $85 million of its common shares outstanding in the third- quarter. The company is allocating 100% of free cash flow (excluding Duvernay Energy) to share buybacks in 2024. Year-to-date, the company has completed circa $257 million (50.8 million common shares) in share repurchases.

2024 Guidance

• Athabasca reiterated its 2024 production guidance which points toward mid-point equivalent production of 36,500 boe/d, while lowering its 2024 capital program by 2% ($5 million) to $270 million (reflects gross working interest of Duvernay Energy).