CALGARY, July 31, 2013 /CNW/ - Athabasca Oil Corporation (TSX: ATH)
("Athabasca" or "the Company") is pleased to report its second quarter
2013 results.
Highlights
-
Capital expenditures during the second quarter totalled $143 million,
$92 million in the Thermal Oil Division and $48 million in the Light
Oil Division and the remainder for corporate assets;
-
Production in the second quarter averaged 7,258 barrels of oil
equivalent per day ("boe/d"), with an average production of 8,552 boe/d
for June;
-
Average netback during the second quarter was $36.55 per barrel of oil
equivalent;
-
In the Thermal Oil Division, construction at Hangingstone ("HS") Project
1 continued as planned.
Athabasca has filed its financial statements and management's discussion
and analysis for the three and six month periods ended June 30, 2013.
These documents are available on the Company's website www.atha.com and later this morning from SEDAR www.sedar.com.
Thermal Oil Division
The HS Project 1, a 12,000 barrel per day ("bbl/d") SAGD facility,
construction budget remained on track with over 64% of the project
costs committed. Engineering and procurement being over 85% complete
allowed field construction to start. Mechanical site construction and
drilling are on schedule for a third quarter start. In May, the
regulatory application for the HS Expansion, a 70,000 bbl/d SAGD
project, was submitted. The HS Expansion is planned in two phases of
40,000 bbl/d and 30,000 bbl/d respectively.
The hearing in respect of the Dover Commercial Project, in which
Athabasca holds a 40% interest, was held from April 23 to 29, 2013. The
Alberta Energy Regulator (formerly ERCB) panel is considering the
information provided and is expected to provide its decision shortly.
Athabasca's view is that regulatory approval of this project is
expected later this year which would trigger rights under the Company's
Put/Call Option Agreement.
Athabasca completed the third production cycle of the Dover West
Carbonates TAGD test. The results of the TAGD field test have
successfully met or exceeded all design objectives which included
demonstrating the ability to heat the reservoir with thermal conduction
and produce bitumen by gravity drainage from the Leduc carbonate
formation.
Light Oil Division
Light Oil production averaged 7,258 boe/d (50% liquids) in the second
quarter with an average of 8,552 boe/d in June. Since the occurrence
of the March and April service interruptions at the Simonette gas plant
Keyera has initiated plant modifications aimed at improved sour gas
processing and liquid handling. Operational run-times continuously
improved since early May and Athabasca has steadily increased its
production throughout the quarter. Keyera will have a scheduled
shutdown in September, lasting approximately three weeks, for planned
maintenance and completion of the plant modifications. As a result,
Athabasca's September production will be low, bringing its expected
average production for the third quarter of 2013 into the range of
5,700 to 6,200 boe/d. Five Montney horizontal wells were completed
during the quarter. All development wells from the winter drilling
program are now tied-in.
Athabasca continues to be encouraged by the strong performance of its
three Duvernay horizontal wells and results reported by other industry
operators. Athabasca has initiated a formal joint venture process for
its Duvernay holdings. Athabasca holds approximately 350,000
prospective acres (net) of liquids-rich Duvernay potential, including
approximately 200,000 high-graded acres (net) near Kaybob which contain
greater than 20 metres of net pay and lie in the heart of the Duvernay
Fairway.
"Athabasca's strategy has been and continues to be growth through joint
ventures," says Sveinung Svarte, president and CEO. "The Duvernay
production potential is very good and full development will require
significant capital investment. A joint venture partner would allow
Athabasca to accelerate the development and value realization from the
Duvernay."
Athabasca expects a decision from the Alberta Energy Regulator regarding
the Dover Commercial Project in the third quarter. Once a decision has
been received, a review of the Light Oil capital budget for the
remainder of 2013 will be undertaken.
Conference Call, July 31, 2013
7:30 am Mountain Time (9:30 am Eastern Time)
A conference call to discuss the second quarter will be held for the
investment community and media on July 31, 2013 at 7:30 a.m. MT (9:30
a.m. ET). To participate, please dial 1-888-231-8191 (toll-free in
North America) or 1-647-427-7450 approximately 15 minutes prior to the
conference call. An archived recording of the call will be available
from approximately 12:30 p.m. ET on July 31, 2013 until midnight on
August 14, 2013 by dialing 1-855-859-2056 (toll-free in North America)
or 1-416-849-0833 and entering conference password 13327904.
An audio webcast of the conference call will also be available via
Athabasca's website, www.atha.com or via the following URL: http://www.newswire.ca/en/webcast/detail/1191885/1306669.
About Athabasca Oil Corporation
Athabasca Oil Corporation is a dynamic, Canadian energy company with a
diverse portfolio of thermal and light oil assets. Situated in
Alberta's Western Canadian Sedimentary Basin, the Company has amassed a
significant land base of extensive, high quality resources. With 10.6
billion barrels of bitumen resources (contingent resources, best
estimate) and growing light oil production, Athabasca aspires to become
a major oil producer. Athabasca's common shares trade on the TSX under
the symbol 'ATH'.
Reader Advisory:
This News Release contains forward-looking information that involves
various risks, uncertainties and other factors. All information other
than statements of historical fact is forward-looking information. The
use of any of the words "anticipate", "project'", "plan", "continue",
"estimate", "expect", "may", "would", "will", "project", "should",
"believe", "predict", "pursue" and "potential" and similar expressions
are intended to identify forward-looking information. The
forward-looking information is not historical fact, but rather is based
on the Company's current plans, objectives, goals, strategies,
estimates, assumptions and projections about the Company's industry,
business and future financial results. This information involves known
and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated in
such forward-looking information. No assurance can be given that these
expectations will prove to be correct and such forward-looking
information included in this News Release should not be unduly relied
upon. This information speaks only as of the date of this News Release.
In particular, this News Release may contain forward-looking
information pertaining to the following: the expected timing of receipt
of regulatory approval for the Dover Commercial Project; expected
timing of receipt of first significant revenues from the Company's
assets; the Company's capital expenditure programs; the Company's
drilling plans; the Company's plans for, and results of, exploration
and development activities; the Company's estimated future commitments;
business plans; sanctioning of projects; development of the Company's
Thermal Oil Division and Light Oil and Gas Division projects; timing of
facilities construction and timing of production; the use of in-situ
recovery methods such as Steam Assisted Gravity Drainage (SAGD) for
production of recoverable bitumen, including the potential benefits of
such methods; estimated average production rates for the third quarter
of 2013 and long term production goals; estimated initial and full
production of the Company's projects; Athabasca's plans with respect to
the Company's Light Oil Division and Thermal Oil assets and the
expected benefits to be received by Athabasca from such assets; and
expectations regarding the Company's Light Oil Division development
areas including anticipated production levels and timing of receipt of
significant revenues and operating results therefrom.
With respect to forward-looking information contained in this News
Release, assumptions have been made regarding, among other things: the
Company's ability to obtain qualified staff and equipment in a timely
and cost-efficient manner; the Company's ability to successfully
complete a Duvernay joint venture; the regulatory framework governing
royalties, taxes and environmental matters in the jurisdictions in
which the Company conducts and will conduct its business; the
applicability of technologies for the recovery and production of the
Company's reserves and resources; future capital expenditures to be
made by the Company; future sources of funding for the Company's
capital programs; the Company's future debt levels; geological and
engineering estimates in respect of the Company's reserves and
resources; the geography of the areas in which the Company is
conducting exploration and development activities; the impact that the
agreements relating to the PetroChina Transaction (the "PetroChina
Transaction Agreements") will have on the Company, including on the
Company's financial condition and results of operations; and the
Company's ability to obtain financing on acceptable terms.
Actual results could differ materially from those anticipated in this
forward-looking information as a result of the risk factors set forth
in the Company's most recent Annual Information Form filed on March 27,
2012 ("AIF") that is available on SEDAR at www.sedar.com, including,
but not limited to: fluctuations in market prices for crude oil,
natural gas and bitumen blend; general economic, market and business
conditions; dependence on Phoenix Energy Holdings Limited (" Phoenix")
as the joint venture participant in the Dover oil sands projects;
failure to satisfy certain conditions in connection with the Company's
debt and credit facilities; variations in foreign exchange and interest
rates; factors affecting potential profitability; factors affecting
funding, including the development of new business opportunities, the
availability of financing, developments in technology, the priorities
of the Company and of its current and future joint venture partners and
general economic conditions; uncertainties inherent in estimating
quantities of reserves and resources; uncertainties inherent in SAGD ;
the potential impact of the exercise of the Dover put/call options on
the Company; failure to meet the conditions precedent to the exercise
by the Company of the Dover put option, including failure to obtain
necessary regulatory approvals for completion of the Dover put/call
option transaction in 2013 or at all; failure to obtain regulatory
approval for the Hangingstone Expansion Project or other oil sands
projects when anticipated or at all; failure to meet development
schedules and potential cost overruns; increases in operating costs
making projects uneconomic; the effect of diluent and natural gas
supply constraints and increases in the costs thereof; gas over bitumen
issues affecting operational results; the potential for adverse
consequences in the event that the Company defaults under certain of
the PetroChina Transaction Agreements; environmental risks and hazards
and the cost of compliance with environmental regulations; failure to
obtain or retain key personnel; the substantial capital requirements of
the Company's projects; the need to obtain regulatory approvals and
maintain compliance with regulatory requirements; changes to royalty
regimes; political risks; failure to accurately estimate abandonment
and reclamation costs; risks inherent in the Company's operations,
including those related to exploration, development and production of
oil sands, crude oil and natural gas reserves and resources, including
the production of oil sands reserves and resources using SAGD and the
production of crude oil and natural gas using multi-stage fracture and
other stimulation technologies; the potential for management estimates
and assumptions to be inaccurate; reliance on third party
infrastructure for project facilities; failure by counterparties
(including without limitation Phoenix) to comply with contractual
arrangements between the Company and such counterparties; the potential
lack of available drilling equipment and limitations on access to the
Company's assets; Aboriginal claims; seasonality; hedging risks;
insurance risks; claims made in respect of the Company's operations,
properties or assets; the potential for adverse consequences as a
result of the change of control provisions in the PetroChina
Transaction Agreements; competition for, among other things, capital,
the acquisition of reserves and resources, export pipeline capacity and
skilled personnel; the failure of the Company or the holder of certain
licenses or leases to meet specific requirements of such licenses or
leases; risk of reassessments of the Company's tax filings by taxation
authorities; risks arising from future acquisition and joint venture
activities; risks that joint venture arrangements will not perform as
expected; volatility in the market price of the common shares; and the
effect that the issuance of additional securities by the Company could
have on the market price of the common shares. The forward-looking
statements included in this News Release are expressly qualified by
this cautionary statement. Athabasca does not undertake any obligation
to publicly update or revise any forward-looking statements except as
required by applicable securities laws.
Oil and Gas Information:
"BOEs" may be misleading, particularly if used in isolation. A BOE
conversion ratio of six thousand cubic feet of natural gas to one
barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. As the
value ratio between natural gas and crude oil based on the current
prices of natural gas and crude oil is significantly different from the
energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.
SOURCE: Athabasca Oil Corporation
