Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Shareholder Meeting (May 2021)
30 slides from Athabasca Oil's shareholder meeting presentation, May 5, 2021
Slide 1: Athabasca Oil Corporation – Annual General Meeting
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING ANNUAL GENERAL MEETING (MAY 5, 2021)
Slide 2: Premier Resource Exposure
PREMIER RESOURCE EXPOSURE LIGHT OIL ~34,000 boe/d THERMAL OIL MONTNEY ~90% liquids ~$800MM EV $141MM Cash HANGINGSTONE ~90 year 2P RLI 1,150 MMboe 2P 400 MMboe Proved LIGHT OIL CORNER DUVERNAY LEISMER ATHABASCA OIL (TSX:ATH) Footnotes and additional information included in the back as endnotes and r
Slide 3: Q1 2021 Highlights
Q1 2021 HIGHLIGHTS 34,401 boe/d $66MM Operating Income 89% liquids $19MM Adjusted Funds Flow $141MM Cash Operating Netback $36MM Capex ~$31/boe Light Oil Unrestricted 97% Thermal Oil ~$21/bbl Leismer ATHABASCA OIL (TSX:ATH) Footnotes and additional information included in the back as endnotes and re
Slide 4: The Transformation
THE TRANSFORMATION $486MM Resumption Refinance $470MM $265MM Light Oil JV of Pre‐COVID 2L Notes Contingent Infrastructure with Business (to be Bitumen Sale completed) Murphy Oil Plan Royalties Resource FCF Generation Appraisal Disciplined 2016 2017 2018 2019 2020 2021 Operations Funding Strong Balan
Slide 5: Business Environment & COVID-19 Impact
BUSINESS ENVIRONMENT & COVID-19 IMPACT SUPPLY/DEMAND OUTLOOK COVID‐19 IMPACT 105 o Q1/20 COVID‐19 pandemic; material disruption to global economy 100 o Athabasca well positioned for the post COVID recovery 95 mmbbl/d GLOBAL INVENTORIES CONTINUE TO DRAWDOWN* 90 o Supply‐demand deficit of ~1.6 mmbbl/d
Slide 6: Balance Sheet & Refinancing Objectives
BALANCE SHEET & REFINANCING OBJECTIVES EBITDA ($MM) & LEVERAGE SENSITIVITY FINANCIAL SNAPSHOT (Q1 2021) $400 4.0x o $141MM unrestricted cash $350 o $135MM restricted cash secures long‐term transportation LCs $300 3.0x o $38MM RBL facility extended to Nov. 30, 2021 $250 ~$70MM unhedged o US$450MM Sec
Slide 7: Leismer Overview
LEISMER OVERVIEW LEISMER CENTRAL PROCESSING FACILITY ASSET OVERVIEW o Located ~100 km south of Fort McMurray o Central Processing Facility (CPF); approved capacity of 40,000 bbl/d o On site lodge with ~500 person capacity; owned Aerodrome SUBSURFACE DATA & WELLS o 500+ delineation wells; 100% seismi
Slide 8: Leismer Sustaining Projects
LEISMER SUSTAINING PROJECTS PAD L8 HIGH QUALITY RESERVOIR NEAR‐TERM INFILL WELLS o Pad L7 sustaining well pair; first oil in July o Two Pad L6 infills; commence steaming May & first oil July PAD L8 PROJECT o D&C ongoing; 5 producer wells rig‐released o Highest quality reservoir drilled to date at Le
Slide 9: Leismer Improvements
LEISMER IMPROVEMENTS TECHNOLOGY DRIVING RATES (BBL/D) LOWER WELL PAIR COSTS ($MM) 1,200 $25 Avg. Facilities Cost Pad 1‐6 Avg. Completion Cost 1,000 Pad 7 Avg. Drilling Cost $20 800 $15 600 $10 400 Achieved through longer laterals and implementation 200 of flow control devices $5 0 $0 1 13 25 37 49 6
Slide 10: Hangingstone Overview
HANGINGSTONE OVERVIEW ASSET HIGHLIGHTS DEVELOPMENT MAP o Located ~20 km south of Fort McMurray o Central Processing Facility (CPF); approved capacity of 12,000 bbl/d o No camp; proximal to Fort McMurray SUBSURFACE DATA & WELLS o >250 delineation wells with good seismic coverage o First steam March 2
Slide 11: Hangingstone Recent Initiatives
HANGINGSTONE RECENT INITIATIVES STRONG RESERVOIR RESPONSE REDUCING NON‐ENERGY OPEX ($/BBL) $25 o Excellent facility run‐time following Summer 2020 turnaround o Current production ~9,500 bbl/d (April) $20 75% reduction to Q1/21 $5.70/bbl o NCG aiding in pressure build‐up and energy usage $15 o Start‐
Slide 12: Light Oil Portfolio
LIGHT OIL PORTFOLIO PLACID MONTNEY – 70% WORKING INTEREST AOC LIGHT OIL PROPERTIES o ~80,000 gross acres; ~150 gross future locations o Q1 production ~4,600 boe/d (43% liquids) o ~$29/boe operating netback (March 2021) o Declines moderated with flexible future development KAYBOB DUVERNAY – 30% WORKI
Slide 13: Light Oil Improvements
LIGHT OIL IMPROVEMENTS INDUSTRY LEADING NETBACK (Q4/20) $25 Liquids Weighted Netback (>40% liquids) High Liquids % Gas Weighted Netback (>60% gas) High Quality Product $20 Costs (Operating, Transportation, Royalties) Low Lifting Costs $15 $/boe $10 $5 $0 Deep… ATH LO BNE POU PIPE CPG VII TVE SGY ARX
Slide 14: ESG – Inaugural 2021 Report
ESG – INAUGURAL 2021 REPORT We believe that the responsible energy we produce here in Alberta makes people’s lives better. Our inaugural ESG report is an opportunity for us to showcase the positive impacts we have made and explain how sustainability and responsibility are being embedded into every d
Slide 15: ESG – 2020 Highlights
ESG – 2020 HIGHLIGHTS Athabasca has a longstanding history of consistently measuring, tracking and reporting on ESG metrics NET GHG EMISSIONS INTENSITY WATER RECYCLE RATIO 0.08 20% Reduction 95% 90% 0.07 tonnes Co2e/boe 85% 0.06 80% 0.05 75% 0.04 70% 2015 2016 2017 2018 2019 2020 Oil sands mining In
Slide 16: ESG – Commitment to Responsibility
ESG – COMMITMENT TO RESPONSIBILITY GOALS o Reduce emission intensity by 30% (2015 2025) o Top tier safety results (<0.5 TRIF in 2021); aspiration of no harm to people and no hydrocarbon spills o ESG to be a formal consideration in all capital allocation decisions o Prepare a roadmap for lower carb
Slide 17: Athabasca Value Proposition & Strategy
ATHABASCA VALUE PROPOSITION & STRATEGY Low Decline High Margin Unparalleled Torque to Strong Financial Thermal Oil Light Oil Oil Prices Capacity to Refinance <10% decline rate Peer leading netback ~90% liquids weighting $141MM cash growing to ~1 billion bbl reserves at (~$31/boe Q1 2021) ~
Slide 18: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION
Slide 19: Appendix
mea APPENDIX
Slide 20: Management Team
MANAGEMENT TEAM o Joined Athabasca in 2012 as Senior Vice President Light Oil. Promoted to Chief Operating Officer in 2013 and President and Chief Executive Officer in 2015 o 30 years of exploration and production experience including 18 years with Talisman Energy in various technical Rob Broen, P.E
Slide 21: Capitalization & Hedging
CAPITALIZATION & HEDGING WTI HEDGES (BBL/D; US$/BBL) 25,000 Swaps Sold Calls Collars 3‐Ways 20,000 $62.50 $62.50 15,000 $39.90/$45.63 CAPITALIZATION OVERVIEW (ATH‐TSX) 10,000 $55.00 $55.90 $55.90 Basic Shares Outstanding 531 MM 5,000 Market Capitalization ($0.70/sh) $371 MM $40/$45/$57 $40/$45/$57 Q
Slide 22: ESG – Environmental Highlights
ESG – ENVIRONMENTAL HIGHLIGHTS NET GHG EMISSIONS INTENSITY GREEN HOUSE GAS EMISSIONS 0.08 o Tracking our performance and setting targets 20% Reduction o 20% reduction in emission intensity since 2015 0.07 tonnes Co2e/boe o 30% total reduction target by by 2025 0.06 o New technologies integral to red
Slide 23: ESG – Social & Governance Highlights
ESG – SOCIAL & GOVERNANCE HIGHLIGHTS MEANINGFUL SOCIAL IMPACT STRONG GOVERNANCE IS CORE TO OUR BUSINESS o Accountability for ensuring a safe working environment o Independent Board oversight for long‐term strategy o 2020 0.1 TRIF, no lost time injuries & 0 reportable spills o Board oversight to ESG
Slide 24: Market Egress
MARKET EGRESS THERMAL OIL EGRESS LONG TERM EGRESS SECURED Current Egress o 7,200 bbl/d on Keystone LT Egress AOC Thermal o 20,000 bbl/d on TMX Expansion Leases CANADIAN PIPELINES UNDER CONSTRUCTION o Trans Mountain Expansion – Government of Canada owned Enbridge South Cheecham Terminal Storage Enbri
Slide 25: Endnotes
ENDNOTES Slide Endnotes 1 (1) 2021 guidance product breakdown provided below: Product 2021 Production Split Bitumen 78% Natural Gas* 10% Condensate NGLs 4% Other NGLs 2% Oil** 6% * comprised of 99% or greater of shale gas, with the remaining being conventional natural gas ** comprised of 99% or grea
Slide 26: Endnotes
ENDNOTES Slide Endnotes 3 (1) Historical annual and 2021e Corporate volumes by product are provided below: Product 2016 2017 2018 2019 2020 Product 2021 Production Split Bitumen bbl/d 7,384 27,900 27,900 26,058 22,745 Bitumen 78% Natural Gas mcf/d 13,858 20,890 33,104 28,281 23,229 Natural Gas* 10%
Slide 27: Endnotes
ENDNOTES Slide Endnotes 6‐10 (1) Leismer reserve life index calculated on 694 mmbbl 2P reserves and 20,000 bbl/d production. Please see reader advisory “Additional Oil and Gas Information” for more information (2) For additional information regarding Athabasca’s reserves and resources estimates, ple
Slide 28: Reader Advisory
READER ADVISORY Forward Looking Statements This Presentation 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”, “
Slide 29: Reader Advisory Cont'd
READER ADVISORY CONT’D Additional Oil and Gas Information: Other Oil and Gas terms: This presentation contains certain other oil and gas metrics, including D&C (drilling and completion costs), F&D, steam oil ratio (or SOR), reserves life index, recycle ratio, capital efficiency and P/I, which do not
Slide 30: Reader Advisory Cont'd
READER ADVISORY CONT’D Non‐GAAP Financial Measures and Production Disclosure Cont’d Net Debt is defined as face value of term debt plus accounts payable and accrued liabilities plus current portion of provisions and other liabilities less current assets, adjusted for risk management contracts. Adjus