- Athabasca Oil (ATH) has announced a series of corporate updates
- Forecasted 2022 production is in the upper range of 33,000 – 34,000 boe/d
- It plans to use 100-per-cent of near‐term free cash flow to reduce term debt, followed by a dividend or share buyback plan
- It will be added to the S&P/TSX Composite Index on June 20, 2022
- Athabasca Oil develops thermal and light oil assets in Alberta
- Athabasca Oil (ATH) is up by 3.92 per cent trading at $3.18 per share
Athabasca Oil (ATH) has announced a series of corporate updates.
Operational update
The company completed a two-week plant turnaround at Leismer in May on schedule and on budget. Bitumen production has since been restored to ~20,000 bbl/d. It expects the asset to exit the year at ~21,000 bbl/d as the five initial well pairs on Pad L8 ramp-up to plateau production.
This month, Athabasca will spud two infill well pairs at Pad L6, followed by five additional well pairs at Pad L8, to support production in 2023 and beyond. It expects the asset to grow to ~24,000 bbl/d over the next three years.
The company is forecasting 2022 production to be in the upper range of 33,000 – 34,000 boe/d.
Capital expenditure guidance remains at US$128M.
Deleveraging update
The company plans to use 100-per-cent of near‐term free cash flow to reduce its term debt. It has redeemed ~C$141M (~US$110M) of its term debt year-to-date with US$240M in principal remaining. This accomplishes ~63 per cent of its H1 2023 US$175M debt reduction target. Cash as of May 31, 2022, was ~US$190M with the company anticipating a net cash position before year end.
Forecasts for 2022 include adjusted fund flows of ~US$300M and free cash flow of ~US$180M (US$85 WTI, US$13.50 Western Canadian Select heavy differential).
Athabasca expects to generate ~US$900M in free cash flow between 2022-24 (US$85 WTI, US$12.50 WCS differential flat pricing). Every US$5 in the WTI price impacts free cash flow by ~US$45M annually unhedged.
The company intends to utilize free cash flow and cash balances for share buybacks or dividends once its debt target is achieved.
Index update
Athabasca will be added to the S&P/TSX Composite Index prior to the opening of trading on June 20, 2022.
Athabasca Oil develops thermal and light oil assets in Alberta.
Athabasca Oil (ATH) is up by 3.92 per cent trading at $3.18 per share as of 9:41 am EST.
