Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”)
is pleased to report its first quarter results showcasing continued
operational momentum and full execution of its inaugural buyback
program. Production growth is underway with the commissioning of
the Leismer expansion project and the tie-in of new multi-well pads
in Duvernay Energy.
Athabasca Corporate Consolidated Q1 2024
Highlights
-
Production: Average production of 33,470 boe/d
(98% Liquids).
-
Cash Flow: Adjusted Funds Flow of $88 million
& Cash Flow from Operating Activities of $77 million. The
Company forecasts consolidated 2024 Adjusted Funds Flow of ~$550
million1, with increasing operating scale and strong heavy oil
pricing for the balance of the year.
-
Balance Sheet: Net Cash of $90 million; Liquidity
of $433 million (including $307 million cash).
Athabasca (Thermal Oil)
Highlights
-
Production: First quarter production of 31,536
bbl/d (24,143 bbl/d at Leismer & 7,393 bbl/d at Hangingstone).
Leismer production is on track to reach ~28,000 bbl/d by
mid-year.
-
Cash Flow: Adjusted Funds Flow of $84 million with
an Operating Netback of $36/bbl in the first quarter, with
forecasted annual Adjusted Funds Flow of ~$500 million from the
Thermal Assets.
-
Capital Program: $42 million focused on completing
the Leismer expansion project with facility additions commissioned
in late February and new wells currently being brought onstream.
Athabasca is on-track with original annual guidance of $135 million
for its current Thermal program.
-
Free Cash Flow: $42 million of Free Cash Flow
supporting return of capital commitments. Athabasca expects to
generate $1.2 billion1 in Free Cash Flow during the three-year
timeframe of 2024-26.
Duvernay Energy Highlights
-
Production: First quarter production of 1,934
boe/d. Production growth is expected in the second quarter with two
100% working interest (“WI”) wells on stream in late April and a
three well 30% WI pad expected to be on stream late in June.
-
Cash Flow and Financial Position: Adjusted Funds
Flow of $4 million with an Operating Netback of $27/boe. Duvernay
Energy was seeded with $40 million of cash by the equity partners
and the Company has a $50 million credit facility.
-
Capital Program: $34 million focused on drilling,
completions and readiness activity for the future. The
2024 capital program of $82 million includes four multi-well pads
supporting production momentum with volumes expected to average
~6,000 boe/d in 2025.
Return of Capital Strategy
-
Full Execution of Inaugural Normal Course Issuer Bid
(“NCIB”): On March 15, the Company fully completed its
inaugural annual NCIB, returning $225 million to shareholders (58
million shares repurchased and cancelled for an average price of
$3.88 per share).
-
2024 Return of Capital Commitment: Athabasca is
allocating 100% of Free Cash Flow (not including Duvernay Energy)
to share buybacks in 2024. The Company renewed its NCIB with
capacity to repurchase up to 55 million shares. Year to date the
Company has completed $97 million in share buybacks. The Company
has reduced its fully diluted share count by 72 million shares or
11% since March 31, 2023.
Athabasca Oil – Strategic Update and
Corporate Guidance
-
Value Creation: Athabasca’s capital allocation
framework is designed to unlock shareholder value by prioritizing
multi‐year cash flow per share growth. The Company’s long life, low
decline asset base provides a differentiated liquids weighted
growth platform supported by financial resiliency to execute on
return of capital initiatives.
-
Thermal Oil Assets: Athabasca’s top-tier assets
underpin a strong Free Cash Flow outlook, with a $135 million 2024
capital budget and production guidance of 32,000 – 33,000 bbl/d.
Athabasca has differentiated and significant unrecovered capital
balances on its Thermal Oil Assets that ensure a low Crown royalty
framework (~7%1). Leismer is forecasted to remain pre-payout until
20271 (and beyond with incremental project capital) while
Hangingstone is forecasted to remain pre-payout beyond 20301.
-
Leismer Expansion: The facility expansion at
Leismer was completed in late February with additional wells
currently being brought onstream and the Company remains on track
to reach ~28,000 bbl/d mid‐year.
-
Leismer Growth to 40,000 bbl/d: The Company is
operationally ready for progressive growth up to 40,000 bbl/d over
the next three years. These growth steps are flexible and highly
economic (~$25,000/bbl/d capital efficiency) and will maximize
value creation when executed alongside the Company’s return of
capital initiatives. Incremental capital allocation is anticipated
following the ramp-up of the current expansion project and is
supported by a constructive multi-year heavy oil pricing
outlook.
-
Hangingstone Activity: The Company is preparing to
spud two ~1,400 meter well pairs in Q3 2024. Well design with
extended reach laterals is expected to drive project capital
efficiencies of ~$15,000/bbl/d and will leverage off available
infrastructure capacity. These sustaining well pairs will support
base production in 2025 and beyond with the objective of ensuring
Hangingstone continues to deliver meaningful cash flow
contributions to the Company and maintaining competitive netbacks
($35/bbl Q1 2024 Operating Netback).
-
Exposure to Improving Alberta Heavy Oil Pricing:
With the start-up of the Trans Mountain pipeline expansion (590,000
bbl/d) in early May, Canadian WCS heavy differentials have narrowed
significantly with differentials currently reflecting ~US$11 –
13/bbl for the remainder of 2024. Every $5/bbl WCS change impacts
Adjusted Funds Flow by ~$85 million annually.
-
Managing for Free Cash Flow: Excluding its 70%
equity interest in Duvernay Energy, Athabasca expects to generate
$1.2 billion1 in Free Cash Flow during the three-year timeframe of
2024-26.
-
Tax Free Horizon: As a result of its $2.6 billion
in corporate tax pools, Athabasca is not forecasted to pay cash
taxes for approximately seven years.
Duvernay Energy – Strategic Update and
Corporate Guidance
-
Value Creation: Duvernay Energy (“DEC”) is an
operated, private subsidiary of Athabasca (owned 70% by Athabasca
and 30% by Cenovus Energy Inc.). DEC accelerates value realization
for Athabasca’s shareholders by providing a clear path for
self-funded production and cash flow growth in the prolific Kaybob
Duvernay resource play. This will be achieved without compromising
Athabasca’s capacity to fund its Thermal Oil assets or its return
of capital strategy.
-
Duvernay Assets: Exposure to ~200,000 gross acres
in the liquids rich and oil windows with ~500 gross future well
locations, including ~46,000 acres with 100% working interest.
There has been over 1,000 wells drilled in the area in the past 10
years, including many on existing DEC lands, providing for a unique
low risk development outlook.
-
Financial Capability: DEC was seeded with $40
million of cash by the equity partners and the company has a $50
million credit facility. The plan is to allocate 100% of Adjusted
Funds Flow from DEC to drive near-term production growth.
-
Capital Program: DEC recently brought on
production a two well pad (100% working interest) at 03-18-64-17W5
with an average horizontal length of ~4,150 meters per well. A
second three well pad at 02-03-65-20W5 (30% working interest) is
expected to be placed on stream in June. The 2024 capital program
of $82 million includes four multi-well pads supporting production
momentum with volumes expected to average ~6,000 boe/d in 2025. The
Company has self-funded growth potential to ~25,000 boe/d (75%
Liquids) by the late 2020s1.
Footnote: Refer to the “Reader Advisory” section within this news release for additional information on
Non‐GAAP Financial Measures (e.g. Adjusted Funds
Flow, Free Cash Flow, Net Cash,
Liquidity) and production disclosure.
1 Pricing Assumptions: 2024 annual average
prices of US$80 WTI, US$15 Western Canadian Select “WCS” heavy
differential, C$3 AECO, and $0.73 C$/US$ FX with Q1 2024 pricing
actualized. 2025-26 US$85 WTI, US$12.50 WCS heavy differential, C$3
AECO, and $0.75 C$/US$ FX.
Environmental, Social, Governance
(“ESG”)
-
ESG Report: Our fourth annual ESG report serves as
a platform to demonstrate positive impacts to our stakeholders,
explain how sustainability and responsibility are incorporated into
every decision we make, and reaffirm our commitment to ESG amidst
an evolving energy landscape. The report is available at
https://www.atha.com/esg.html and SEDAR+ (www.sedarplus.ca).
-
Environmental Targets: Athabasca continues to make
strides in reducing its carbon footprint by investing in new
technology and in lower GHG intensity resource developments. The
Company has reduced its GHG emissions intensity by 21% since 2015
and is targeting a total 30% reduction through 2025. Growth in the
low emissions intensity Duvernay shale play is expected to keep the
Company on track with its targets.
-
Safety is Always Our Top Priority. Our results
demonstrate a robust commitment by our teams as evidenced by our
2023 total recordable injury frequency of 0.3 per 200,000 work
hours, well below industry average, with no serious injuries. We
are proud to report a fifth consecutive year with zero reportable
hydrocarbon spills.
Annual Shareholders Meeting
-
Athabasca will be hosting its Annual General and Special Meeting of
Shareholders (“Meeting”) on Thursday, May 9, 2024 at 9:00 am (MT).
The Meeting will be hosted virtually and shareholders and guests
can listen via live webcast with details available at:
https://www.atha.com/investors/presentation-events.html
Financial and Operational Highlights
|
Three months endedMarch 31, |
($ Thousands, unless otherwise noted) |
2024 |
|
2023 |
CORPORATE CONSOLIDATED(1) |
|
|
|
Petroleum and natural gas production (boe/d)(2) |
|
33,470 |
|
|
|
34,683 |
|
Petroleum, natural gas and midstream sales |
$ |
311,116 |
|
|
$ |
290,741 |
|
Operating Income(2) |
$ |
105,135 |
|
|
$ |
56,535 |
|
Operating Income Net of Realized Hedging(2)(3) |
$ |
106,580 |
|
|
$ |
34,480 |
|
Operating Netback ($/boe)(2) |
$ |
35.78 |
|
|
$ |
16.85 |
|
Operating Netback Net of Realized Hedging ($/boe)(2)(3) |
$ |
36.27 |
|
|
$ |
10.27 |
|
Capital expenditures |
$ |
76,011 |
|
|
$ |
26,362 |
|
Cash flow from operating activities |
$ |
76,638 |
|
|
$ |
20,537 |
|
per share - basic |
$ |
0.14 |
|
|
$ |
0.04 |
|
Adjusted Funds Flow(2) |
$ |
87,772 |
|
|
$ |
(9,396 |
) |
per share - basic |
$ |
0.15 |
|
|
$ |
(0.02 |
) |
ATHABASCA (THERMAL OIL) |
|
|
|
Bitumen production (bbl/d)(2) |
|
31,536 |
|
|
|
29,179 |
|
Petroleum, natural gas and midstream sales |
$ |
305,041 |
|
|
$ |
269,102 |
|
Operating Income(2) |
$ |
100,449 |
|
|
$ |
41,497 |
|
Operating Netback ($/bbl)(2) |
$ |
36.36 |
|
|
$ |
14.52 |
|
Capital expenditures |
$ |
42,119 |
|
|
$ |
24,486 |
|
Adjusted Funds Flow(2) |
$ |
83,713 |
|
|
|
Free Cash Flow(2) |
$ |
41,594 |
|
|
|
DUVERNAY ENERGY(1) |
|
|
|
Petroleum and natural gas production (boe/d)(2) |
|
1,934 |
|
|
|
5,504 |
|
Percentage Liquids (%)(2) |
72 |
% |
|
57 |
% |
Petroleum, natural gas and midstream sales |
$ |
11,538 |
|
|
$ |
29,889 |
|
Operating Income(2) |
$ |
4,686 |
|
|
$ |
15,038 |
|
Operating Netback ($/boe)(2) |
$ |
26.63 |
|
|
$ |
30.35 |
|
Capital expenditures |
$ |
33,892 |
|
|
$ |
1,876 |
|
Adjusted Funds Flow(2) |
$ |
4,059 |
|
|
|
Free Cash Flow(2) |
$ |
(29,833 |
) |
|
|
NET
INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) |
|
|
|
Net income (loss) and comprehensive income (loss)(4) |
$ |
38,609 |
|
|
$ |
(56,635 |
) |
per share - basic(4) |
$ |
0.07 |
|
|
$ |
(0.10 |
) |
per share - diluted(4) |
$ |
0.07 |
|
|
$ |
(0.10 |
) |
COMMON SHARES OUTSTANDING |
|
|
|
Weighted average shares outstanding - basic |
|
567,076,940 |
|
|
|
586,631,143 |
|
Weighted average shares outstanding - diluted |
|
577,106,504 |
|
|
|
586,631,143 |
|
|
March 31, |
|
December 31, |
As at ($ Thousands) |
2024 |
|
2023 |
LIQUIDITY AND BALANCE SHEET |
|
|
|
Cash and cash equivalents |
$ |
306,503 |
|
$ |
343,309 |
Available credit facilities(5) |
$ |
126,425 |
|
$ |
85,488 |
Face value of term debt(6) |
$ |
212,735 |
|
$ |
207,648 |
(1) Corporate Consolidated and
Duvernay Energy reflect gross production and financial metrics
before taking into consideration Athabasca’s 70% equity interest in
Duvernay Energy.(2) Refer to the “Reader Advisory”
section within this News Release for additional information on
Non-GAAP Financial Measures and production
disclosure.(3) Includes realized commodity risk
management gain of $1.4 million for the three months ended March
31, 2024 (three months ended March 31, 2023 – loss of $22.1
million).(4) Net income (loss) and comprehensive
income (loss) per share amounts are based on net income (loss) and
comprehensive income (loss) attributable to shareholders of the
Parent Company.(5) Includes available credit under
Athabasca's and Duvernay Energy's Credit Facilities and Athabasca's
Unsecured Letter of Credit Facility.(6) The face
value of the term debt at March 31, 2024 was US$157 million
(December 31, 2023 – US$157 million) translated into Canadian
dollars at the March 31, 2024 exchange rate of US$1.00 = C$1.3550
(December 31, 2023 – C$1.3226).
About Athabasca Oil
Corporation
Athabasca Oil Corporation is a Canadian energy
company with a focused strategy on the development 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. Athabasca’s light oil assets
are held in a private subsidiary (Duvernay Energy Corporation) in
which Athabasca owns a 70% equity interest. Athabasca’s common
shares trade on the TSX under the symbol “ATH”. For more
information, visit www.atha.com.
For more information, please contact: |
Matthew
Taylor |
Robert
Broen |
Chief Financial Officer |
President and CEO |
1-403-817-9104 |
1-403-817-9190 |
mtaylor@atha.com |
rbroen@atha.com |
|
|
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”, “plan”, “project”, “continue”, “maintain”, “may”,
“estimate”, “expect”, “will”, “target”, “forecast”, “could”,
“intend”, “potential”, “guidance”, “outlook” and similar
expressions suggesting future outcome 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
operating and 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
contains forward-looking information pertaining to, but not limited
to, the following: our strategic plans; the allocation of future
capital; timing and quantum for shareholder returns including share
buybacks; the terms of our NCIB program; our drilling plans;
Leismer ramp-up to expected production rates; timing of Leismer’s
pre-payout royalty status; applicability of tax pools and the
timing of tax payments; expected operating results at Hangingstone;
Adjusted Funds Flow and Free Cash Flow in 2024 to 2026; type well
economic metrics; number of drilling locations; forecasted daily
production and the composition of production; our plans to release
an ESG update; our outlook in respect of the Corporation’s business
environment, including in respect of the Trans Mountain pipeline
expansion and new global heavy oil refining capacity; and other
matters.
In addition, information and statements in this
News Release relating to "Reserves" and “Resources” are deemed to
be forward-looking information, as they involve the implied
assessment, based on certain estimates and assumptions, that the
reserves and resources described exist in the quantities predicted
or estimated, and that the reserves and resources described can be
profitably produced in the future. With respect to forward-looking
information contained in this News Release, assumptions have been
made regarding, among other things: commodity prices; the
regulatory framework governing royalties, taxes and environmental
matters in the jurisdictions in which the Company conducts and will
conduct business and the effects that such regulatory framework
will have on the Company, including on the Company’s financial
condition and results of operations; the Company’s financial and
operational flexibility; the Company’s financial sustainability;
Athabasca's cash flow break-even commodity price; the Company’s
ability to obtain qualified staff and equipment in a timely and
cost-efficient manner; 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; future production levels; the
Company’s ability to obtain financing and/or enter into joint
venture arrangements, on acceptable terms; operating costs;
compliance of counterparties with the terms of contractual
arrangements; impact of increasing competition globally; collection
risk of outstanding accounts receivable from third parties;
geological and engineering estimates in respect of the Company’s
reserves and resources; recoverability of reserves and resources;
the geography of the areas in which the Company is conducting
exploration and development activities and the quality of its
assets. Certain other assumptions related to the Company’s Reserves
and Resources are contained in the report of McDaniel &
Associates Consultants Ltd. (“McDaniel”) evaluating Athabasca’s
Proved Reserves, Probable Reserves and Contingent Resources as at
December 31, 2023 (which is respectively referred to herein as the
"McDaniel Report”).
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 Annual Information
Form (“AIF”) dated February 29, 2024 available on SEDAR at
www.sedarplus.ca, including, but not limited to: weakness in the
oil and gas industry; exploration, development and production
risks; prices, markets and marketing; market conditions; climate
change and carbon pricing risk; statutes and regulations regarding
the environment; regulatory environment and changes in applicable
law; gathering and processing facilities, pipeline systems and
rail; reputation and public perception of the oil and gas sector;
environment, social and governance goals; political uncertainty;
state of capital markets; ability to finance capital requirements;
access to capital and insurance; abandonment and reclamation costs;
changing demand for oil and natural gas products; anticipated
benefits of acquisitions and dispositions; royalty regimes; foreign
exchange rates and interest rates; reserves; hedging; operational
dependence; operating costs; project risks; supply chain
disruption; financial assurances; diluent supply; third party
credit risk; indigenous claims; reliance on key personnel and
operators; income tax; cybersecurity; advanced technologies;
hydraulic fracturing; liability management; seasonality and weather
conditions; unexpected events; internal controls; limitations and
insurance; litigation; natural gas overlying bitumen resources;
competition; chain of title and expiration of licenses and leases;
breaches of confidentiality; new industry related activities or new
geographical areas; water use restrictions and/or limited access to
water; relationship with Duvernay Energy Corporation; management
estimates and assumptions; third-party claims; conflicts of
interest; inflation and cost management; credit ratings; growth
management; impact of pandemics; ability of investors resident in
the United States to enforce civil remedies in Canada; and risks
related to our debt and securities. All subsequent forward-looking
information, whether written or oral, attributable to the Company
or persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements.
Also included in this News Release are estimates
of Athabasca's 2024 outlook which are based on the various
assumptions as to production levels, commodity prices, currency
exchange rates and other assumptions disclosed in this News
Release. To the extent any such estimate constitutes a financial
outlook, it was approved by management and the Board of Directors
of Athabasca and is included to provide readers with an
understanding of the Company’s outlook. Management does not have
firm commitments for all of the costs, expenditures, prices or
other financial assumptions used to prepare the financial outlook
or assurance that such operating results will be achieved and,
accordingly, the complete financial effects of all of those costs,
expenditures, prices and operating results are not objectively
determinable. The actual results of operations of the Company and
the resulting financial results may vary from the amounts set forth
herein, and such variations may be material. The outlook and
forward-looking information contained in this New Release was made
as of the date of this News release and the Company disclaims any
intention or obligations to update or revise such outlook and/or
forward-looking information, whether as a result of new
information, future events or otherwise, unless required pursuant
to applicable law.
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.
Initial Production Rates
Test Results and Initial Production Rates: The
well test results and initial production rates provided herein
should be considered to be preliminary, except as otherwise
indicated. Test results and initial production rates disclosed
herein may not necessarily be indicative of long-term performance
or of ultimate recovery.
Reserves Information
The McDaniel Report was prepared using the
assumptions and methodology guidelines outlined in the COGE
Handbook and in accordance with National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities, effective
December 31, 2023. There are numerous uncertainties inherent in
estimating quantities of bitumen, light crude oil and medium crude
oil, tight oil, conventional natural gas, shale gas and natural gas
liquids reserves and the future cash flows attributed to such
reserves. The reserve and associated cash flow information set
forth above are estimates only. In general, estimates of
economically recoverable reserves and the future net cash flows
therefrom are based upon a number of variable factors and
assumptions, such as historical production from the properties,
production rates, ultimate reserve recovery, timing and amount of
capital expenditures, marketability of oil and natural gas, royalty
rates, the assumed effects of regulation by governmental agencies
and future operating costs, all of which may vary materially. For
those reasons, estimates of the economically recoverable reserves
attributable to any particular group of properties, classification
of such reserves based on risk of recovery and estimates of future
net revenues associated with reserves prepared by different
engineers, or by the same engineers at different times, may vary.
The Company's actual production, revenues, taxes and development
and operating expenditures with respect to its reserves will vary
from estimates thereof and such variations could be material.
Reserves figures described herein have been rounded to the nearest
MMbbl or MMboe. For additional information regarding the
consolidated reserves and information concerning the resources of
the Company as evaluated by McDaniel in the McDaniel Report, please
refer to the Company’s AIF.
Reserve Values (i.e. Net Asset Value) is
calculated using the estimated net present value of all future net
revenue from our reserves, before income taxes discounted at 10%,
as estimated by McDaniel effective December 31, 2023 and based on
average pricing of McDaniel, Sproule and GLJ as of January 1,
2024.
The 500 gross Duvernay drilling locations
referenced include: 37 proved undeveloped locations and 76 probable
undeveloped locations for a total of 113 booked locations with the
balance being unbooked locations. Proved undeveloped locations and
probable undeveloped locations are booked and derived from the
Company's most recent independent reserves evaluation as prepared
by McDaniel as of December 31, 2023 and account for drilling
locations that have associated proved and/or probable reserves, as
applicable. Unbooked locations are internal management estimates.
Unbooked locations do not have attributed reserves or resources
(including contingent or prospective). Unbooked locations have been
identified by management as an estimation of Athabasca’s multi-year
drilling activities expected to occur over the next two decades
based on evaluation of applicable geologic, seismic, engineering,
production and reserves information. There is no certainty that the
Company will drill all unbooked drilling locations and if drilled
there is no certainty that such locations will result in additional
oil and gas reserves, resources or production. The drilling
locations on which the Company will actually drill wells, including
the number and timing thereof is ultimately dependent upon the
availability of funding, commodity prices, provincial fiscal and
royalty policies, costs, actual drilling results, additional
reservoir information that is obtained and other factors.
Non-GAAP and Other Financial Measures,
and Production Disclosure
The "Corporate Consolidated Adjusted Funds
Flow", “Corporate Consolidated Adjusted Funds Flow per Share”,
"Athabasca (Thermal Oil) Adjusted Funds Flow", "Duvernay Energy
Adjusted Funds Flow", “Corporate Consolidated Free Cash Flow”,
"Athabasca (Thermal Oil) Free Cash Flow", "Duvernay Energy Free
Cash Flow", "Duvernay Energy Operating Income", "Duvernay Energy
Operating Netback", "Athabasca (Thermal Oil) Operating Income",
"Athabasca (Thermal Oil) Operating Netback", “Corporate
Consolidated Operating Income", "Corporate Consolidated Operating
Netback", " Corporate Consolidated Operating Income Net of Realized
Hedging", " Corporate Consolidated Operating Netback Net of
Realized Hedging", “Cash Transportation & Marketing Expense”,
"Cash Financing and Interest Expense", "Cash Stock-Based
Compensation Expense" and "Realized Foreign Exchange" financial
measures contained in this News Release do not have standardized
meanings which are prescribed by IFRS and they are considered to be
non-GAAP financial measures or ratios. These measures may not be
comparable to similar measures presented by other issuers and
should not be considered in isolation with measures that are
prepared in accordance with IFRS. Liquidity is
a supplementary financial measure. The Leismer and
Hangingstone operating results are a supplementary financial
measure that when aggregated, combine to the Athabasca (Thermal
Oil) segment results.
Adjusted Funds Flow, Adjusted Funds Flow Per
Share and Free Cash FlowAdjusted Funds Flow and Free Cash Flow are
non-GAAP financial measures and are not intended to represent cash
flow from operating activities, net earnings or other measures of
financial performance calculated in accordance with IFRS. The
Adjusted Funds Flow and Free Cash Flow measures allow management
and others to evaluate the Company’s ability to fund its capital
programs and meet its ongoing financial obligations using cash flow
internally generated from ongoing operating related activities.
Adjusted Funds Flow per share is a non-GAAP financial ratio
calculated as Adjusted Funds Flow divided by the applicable number
of weighted average shares outstanding. Adjusted Funds Flow and
Free Cash Flow are calculated as follows:
|
Three months endedMarch 31,
2024 |
|
Three months endedMarch 31,
2023 |
($ Thousands) |
Athabasca(Thermal Oil) |
|
|
Duvernay Energy(1) |
|
|
Corporate Consolidated(1) |
|
|
Corporate Consolidated |
|
Operating Income |
$ |
100,449 |
|
|
$ |
4,686 |
|
|
$ |
105,135 |
|
|
$ |
56,535 |
|
Realized gain (loss) on commodity risk mgmt contracts |
|
1,445 |
|
|
|
— |
|
|
|
1,445 |
|
|
|
(22,055 |
) |
General and administrative |
|
(4,934 |
) |
|
|
(828 |
) |
|
|
(5,762 |
) |
|
|
(5,747 |
) |
Interest income |
|
4,207 |
|
|
|
283 |
|
|
|
4,490 |
|
|
|
3,270 |
|
Cash Financing and Interest |
|
(6,321 |
) |
|
|
(82 |
) |
|
|
(6,403 |
) |
|
|
(6,959 |
) |
Cash Stock-Based Compensation |
|
(12,186 |
) |
|
|
— |
|
|
|
(12,186 |
) |
|
|
(34,763 |
) |
Realized Foreign Exchange |
|
1,120 |
|
|
|
— |
|
|
|
1,120 |
|
|
|
635 |
|
Exploration expenses |
|
(67 |
) |
|
|
— |
|
|
|
(67 |
) |
|
|
(312 |
) |
ADJUSTED FUNDS FLOW |
|
83,713 |
|
|
|
4,059 |
|
|
|
87,772 |
|
|
|
(9,396 |
) |
Capital expenditures |
|
(42,119 |
) |
|
|
(33,892 |
) |
|
|
(76,011 |
) |
|
|
(26,362 |
) |
FREE CASH FLOW |
$ |
41,594 |
|
|
$ |
(29,833 |
) |
|
$ |
11,761 |
|
|
$ |
(35,758 |
) |
(1) Duvernay Energy and
Corporate Consolidated reflect gross financial metrics before
taking into consideration Athabasca's 70% equity interest in
Duvernay Energy.
Duvernay Energy Operating Income and Operating
NetbackThe non-GAAP measure Duvernay Energy Operating Income in
this News Release is calculated by subtracting the Duvernay Energy
royalties, operating expenses and transportation & marketing
expenses from petroleum and natural gas sales which is the most
directly comparable GAAP measure. The Duvernay Energy Operating
Netback per boe is a non-GAAP financial ratio calculated by
dividing the Duvernay Energy Operating Income by the Duvernay
Energy production. The Duvernay Energy Operating Income and the
Duvernay Energy Operating Netback measures allow management and
others to evaluate the production results from the Company’s
Duvernay Energy assets.
The Duvernay Energy Operating Income is
calculated using the Duvernay Energy Segments GAAP results, as
follows:
|
Three months endedMarch 31, |
($ Thousands, unless otherwise noted) |
2024 |
|
|
2023 |
|
Petroleum and natural gas sales |
$ |
11,538 |
|
|
$ |
29,889 |
|
Royalties |
|
(2,314 |
) |
|
|
(5,556 |
) |
Operating expenses |
|
(3,640 |
) |
|
|
(6,929 |
) |
Transportation and marketing |
|
(898 |
) |
|
|
(2,366 |
) |
DUVERNAY ENERGY OPERATING INCOME |
$ |
4,686 |
|
|
$ |
15,038 |
|
Athabasca (Thermal Oil) Operating Income and
Operating NetbackThe non-GAAP measure Athabasca (Thermal Oil)
Operating Income in this News Release is calculated by subtracting
the Athabasca (Thermal Oil) segments cost of diluent blending,
royalties, operating expenses and cash transportation &
marketing expenses from heavy oil (blended bitumen) and midstream
sales which is the most directly comparable GAAP measure. The
Athabasca (Thermal Oil) Operating Netback per boe is a non-GAAP
financial ratio calculated by dividing the respective projects
Operating Income by its respective bitumen sales volumes. The
Athabasca (Thermal Oil) Operating Income and the Athabasca (Thermal
Oil) Operating Netback measures allow management and others to
evaluate the production results from the Athabasca (Thermal Oil)
assets. The Athabasca (Thermal Oil) Operating Income is calculated
using the Athabasca (Thermal Oil) Segments GAAP results, as
follows:
|
Three months endedMarch 31, |
($ Thousands, unless otherwise noted) |
2024 |
|
|
2023 |
|
Heavy oil (blended bitumen) and midstream sales |
$ |
305,041 |
|
|
$ |
269,102 |
|
Cost of diluent |
|
(133,860 |
) |
|
|
(148,933 |
) |
Total bitumen and midstream sales |
|
171,181 |
|
|
|
120,169 |
|
Royalties |
|
(11,537 |
) |
|
|
(6,613 |
) |
Operating expenses - non-energy |
|
(23,125 |
) |
|
|
(22,940 |
) |
Operating expenses - energy |
|
(16,558 |
) |
|
|
(24,829 |
) |
Transportation and marketing(1) |
|
(19,512 |
) |
|
|
(24,290 |
) |
ATHABASCA (THERMAL OIL) OPERATING INCOME |
$ |
100,449 |
|
|
$ |
41,497 |
|
(1) Transportation and
marketing excludes non-cash costs of $0.6 million for the three
months ended March 31, 2024 (three months ended March 31, 2023 -
$0.6 million).
Corporate Consolidated Operating Income and
Corporate Consolidated Operating Income Net of Realized Hedging and
Operating NetbacksThe non-GAAP measures of Corporate Consolidated
Operating Income including or excluding realized hedging in this
News Release are calculated by adding or subtracting realized gains
(losses) on commodity risk management contracts (as applicable),
royalties, the cost of diluent blending, operating expenses and
cash transportation & marketing expenses from petroleum,
natural gas and midstream sales which is the most directly
comparable GAAP measure. The Corporate Consolidated Operating
Netbacks including or excluding realized hedging per boe are
non-GAAP ratios calculated by dividing Corporate Consolidated
Operating Income including or excluding hedging by the total sales
volumes and are presented on a per boe basis. The Corporate
Consolidated Operating Income and Corporate Consolidated Operating
Netbacks including or excluding realized hedging measures allow
management and others to evaluate the production results from the
Company’s Duvernay Energy and Athabasca (Thermal Oil) assets
combined together including the impact of realized commodity risk
management gains or losses (as applicable).
Cash Transportation & Marketing ExpenseThe
Cash Transportation & Marketing Expense financial measure
contained in this News Release is calculated by subtracting the
non-cash Transportation & Marketing Expense as reported in the
Consolidated Statement of Cash Flows from the Transportation &
Marketing Expense as reported in the Consolidated Statement of
Income (Loss) and is considered to be a non-GAAP financial
measure.
Cash Financing and Interest Expense The Cash
Financing and Interest Expense financial measures contained in this
News Release are calculated by subtracting the net non-cash
financing and interest expense as reported in the Consolidated
Statement of Cash Flows from the financing and interest expense as
reported in the Consolidated Statement of Income (Loss) and are
considered to be non-GAAP financial measures.
Cash Stock-Based Compensation Expense The Cash
Stock-Based Compensation Expense financial measures contained in
this News Release are calculated by subtracting the net non-cash
stock-based compensation expense as reported in the Consolidated
Statement of Cash Flows from the stock-based compensation expense
as reported in the Consolidated Statement of Income (Loss) and are
considered to be non-GAAP financial measures.
Realized Foreign Exchange The Realized Foreign
Exchange financial measures contained in this News Release are
calculated by subtracting the realized foreign exchange (gain) loss
on redemption of US dollar debt as reported in the Consolidated
Statement of Cash Flows from the realized foreign exchange gain
(loss) as reported in Note 19 of the Consolidated Financial
Statements and are considered to be non-GAAP financial
measures.
Net CashNet Cash is defined as the face value of
term debt, plus accounts payable and accrued liabilities, plus
current portion of provisions and other liabilities less current
assets, excluding risk management contracts and warrant
liability.
LiquidityLiquidity is defined as cash and cash equivalents plus available credit capacity.
Production volumes details
|
|
Three months endedMarch 31, |
|
Production |
|
2024 |
|
2023 |
|
Duvernay Energy: |
|
|
|
|
|
Oil(1) |
bbl/d |
|
1,205 |
|
|
1,576 |
|
Condensate NGLs |
bbl/d |
|
— |
|
|
814 |
|
Oil and condensate NGLs |
bbl/d |
|
1,205 |
|
|
2,390 |
|
Other NGLs |
bbl/d |
|
180 |
|
|
721 |
|
Natural gas(2) |
mcf/d |
|
3,291 |
|
|
14,358 |
|
Total Duvernay Energy |
boe/d |
|
1,934 |
|
|
5,504 |
|
Total Thermal Oil bitumen |
bbl/d |
|
31,536 |
|
|
29,179 |
|
Total Company production |
boe/d |
|
33,470 |
|
|
34,683 |
|
(1) Comprised of 98% or
greater of tight oil, with the remaining being light and medium
crude oil.(2) Comprised of 99% or greater of
shale gas, with the remaining being conventional natural gas.
This News Release also makes reference to
Athabasca's forecasted average daily Thermal Oil production of
32,000 - 33,000 bbl/d for 2024. Athabasca expects that 100% of that
production will be comprised of bitumen. Duvernay Energy’s
forecasted average daily production of ~3,000 boe/d for 2024 is
expected to be comprised of approximately 66% tight oil, 24% shale
gas and 10% NGLs.
Liquids is defined as bitumen, light crude oil,
medium crude oil and natural gas liquids.
Athabasca Oil (TSX:ATH)
Historical Stock Chart
From Sep 2024 to Oct 2024
Athabasca Oil (TSX:ATH)
Historical Stock Chart
From Oct 2023 to Oct 2024