Q3 Corporate Highlights
Production: 37,240 boe/d (93% Liquids) consisting of 31,023 bbl/d in Thermal Oil and 6,217 boe/d (57% Liquids) in Light Oil. The Company is on track to exceed its increased annual production guidance of 34,000 - 35,000 boe/d, based on strong underlying asset performance.
Record Cash Flow: Record Adjusted Funds Flow1 of
Netbacks:
Capital Expenditures:
Significant Deleveraging: Redeemed
Strong Liquidity:
Operational Highlights
Leismer: Q3 production averaged 22,309 bbl/d with a 2.8x SOR supported by strong rates from the new Pad 8 (5 well pairs). The Company recently placed two additional infill wells on production at Pad L6 and rig released an additional five well pairs at Pad L8 that are expected to be on production in H1 2023. Athabasca has estimated Profit?to?Investment Ratios (NPV/Investment) of ~10x on recent sustaining pads (long term
Hangingstone: Q3 production averaged 8,714 bbl/d and non?condensable gas co?injection has resulted in reduced energy intensity with the steam oil ratio of 3.8x year to date.
Light Oil Duvernay and
Low Decline, Long Life Asset Base: Athabasca has a deep asset inventory with 1,230 mmbbl 2P
Reserves in Thermal Oil and ~850 gross wells of short cycle?time, high returning Light Oil future locations. The asset portfolio is demonstrating its ability to generate significant Free Cash Flow and will provide tremendous optionality into the future. Production guidance of 34,000 - 35,000 boe/d (92% Liquids) in 2022 is expected to be attained through its modest capital program that is also indicative of long term sustaining capital requirements.
Managing for Free Cash Flow: For 2022, Athabasca is updating its financial forecasts based on strong operational performance and current commodity price assumptions. Adjusted Funds Flow1 is forecasted at
Flow is supported by
Significant Deleveraging with Clear Targets: The Company has utilized 100% of near term Free Cash Flow to reduce its Term Debt, with a clear target of
Flow payment feature within the indenture. This is significantly ahead of schedule while also maintaining a strong liquidity position of
Excellent Exposure to Commodity Price Upside: Athabasca has excellent exposure to upside in commodity prices with minimal hedges in 2023. The Company has a constructive outlook on oil prices given years of industry underinvestment in energy. The Company believes the recent wider WCS differentials is transitory as the US administration tapers Strategic Petroleum Reserve releases and refinery maintenance season concludes.
Thermal Oil Differentiation: Athabasca's Thermal assets operate in a pre?payout Crown royalty structure, with royalty rates between 5 ? 9%, and is anticipated to last beyond 2028 (
Planning for the Future: A
Unlocking Shareholder Value: Deleveraging in 2022 has transitioned a significant portion of enterprise value to shareholders. Athabasca is committed to further enhancing shareholder returns by utilizing Free Cash Flow and cash balances for share buy?backs once its debt target is achieved. The Company sees tremendous intrinsic value not reflected in the current share price. Guidance on shareholder returns and the corporate capital allocation framework will be provided in early December in conjunction with the 2023 budget
About
Contact:
Chief Financial Officer
T: 14038179104
E: mtaylor@atha.com
President and CEO
T: 14038179190
E: rbroen@atha.com
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