- Athabasca Oil (TSX:ATH) launched its initial public offering back in 2010 for roughly C$1.55 billion
- The company’s shares reached an all-time high of $18.61 in March 2011
- However, with the impact of COVID-19, Athabasca OIl reached an all-time low of $0.12 in 2020
- Its shares have been back on the rise, increasing by 3,100 per cent to $3.86 as of December 2023
Much like other industries, the oil and gas sector has had a volatile year, but companies like Athabasca Oil (TSX:ATH) have weathered the storm over the course of 2023, but what’s in store for its stock price forecast?
Athabasca Oil stock price overview
Athabasca Oil Corp. has been on the market since April 2010 when it completed its initial public offering (IPO) for roughly C$1.55 billion. At the time, it was estimated the IPO was Canada’s biggest in more than a decade.
The company opened trading on April 9, 2010, at $15.70 per share and reached a high of $17.92 on March 3, 2011.
However, Athabasca Oil’s stock has otherwise had a rocky lifespan, dropping more than 75 per cent in value since it began trading fueled in large part by sluggish oil prices, a decline in interest in Canada’s oil sands and a string of quarterly losses.
After the COVID-19 pandemic that reared its ugly head in March 2020, crude oil prices began 2021 at a price of US$50 per barrel before reaching $86 per barrel later that year. By the end of 2021, prices were down again to an average of $71.
Similarly, the company’s shares reached an all-time low of just $0.11 in October 2020 with its high in 2011 feeling like nothing more than a fever dream.
On the road to recovery?
While 2021 was a rough year for the oil and gas industry after the impact of the COVID-19 pandemic, the industry has slowly been making strides again along with Athabasca Oil.
Crude oil prices have rebounded to an average of $86 per barrel as of October 2023 and are expected to average roughly $89 per barrel throughout 2024 with not much movement.
When it comes to output, it is expected that global output in the overarching oil and gas industry will increase by 1.5 million barrels per day in 2023 and 1.7 million barrels per day in 2024 to new record highs.
As for Athabasca Oil’s stock price, since 2020 it has increased 3,100 per cent – from its low of $0.11 to its current price of $3.86 – and while it’s still far off from its all-time high, perhaps a rebound is on its way.
Future outlook for Athabasca Oil
In early November, the company released its Q3 2023 results highlighting record cash flow of $168 million in consolidated operating income and record adjusted funds flow of $141 million. The company stated its cash flow was supported by strong heavy oil prices and an overall operating netback of $50.84 barrel of crude oil.
Athabasca Oil also stated that it is executing a $145 million capital program with a focus on advancing the expansion project at Leismer and operational readiness in light oil. Corporate production is expected to average 34,500 boe/d with the 3,000 boe/d non-core disposition being partially offset by recent growth at Leismer.
“Athabasca is focused on driving shareholder value through strong multi-year cash flow per share growth. The company’s asset base provides a platform to drive profitable liquids-weighted growth supported by financial resiliency to execute on return of capital initiatives,” a company news release stated.
Perhaps, then, it doesn’t come entirely as a surprise that analysts are projecting the Athabasca stock as a “moderate buy,” according to TipRanks.com.
Over a 12-month period, six Wall Street analysts have an average price target for the company at $4.87 with a high forecast of $5.50 and a low forecast of $4.50. The average price target represents a 26.42 per cent upside from its last price of $3.86.
No matter which way you look at it, this is promising news for the company and shows that it’s come a long way since its 2020 lows.
About Athabasca Oil
Athabasca Oil Corp., which has headquarters in Calgary, is a Canadian energy company focused primarily on the development of thermal and light oil assets. The company operates in two segments, including light oil and thermal oil.
Its thermal oil segment includes its assets, liabilities and operating results for exploring, developing and producing bitumen from sand and carbonate rock formations from northern Alberta’s Athabasca region.
Meanwhile its 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.
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