Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Investor Presentation (December 2022)
26 slides from Athabasca Oil's investor presentation, December 2022
Slide 1: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING DECEMBER 2022
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT ~35,000 BOE/D / 93% LIQUIDS / 5% ANNUAL BASE DECLINE ATHABASCA ASSETS THERMAL OIL CAPITALIZATION (ATH‐TSX) THERMAL OIL Dover ~300,000 gross acres o Predictable, low decline projects West Basic Shares 586MM o Efficient brownfield SAGD development Hangingstone Market Cap. ($2.75/sh)
Slide 3: Why Own Athabasca
WHY OWN ATHABASCA TOP TIER, LONG LIFE MANAGING FOR ASSET BASE SHAREHOLDER RETURNS • 1.3 billion boe 2P reserves; 5% corporate decline • Return >75% of Excess Cash Flow to shareholders • Low sustaining capital (~$125MM annually) • Competive cost structure with tax‐free horizon and • 850 gross de‐risk
Slide 4: Robust Free Cash Flow Profile
ROBUST FREE CASH FLOW PROFILE PRODUCTION (BOE/D) BUSINESS OUTLOOK 50,000 Production 100 per MM share 90 o Low‐risk, sustainable capital projects 40,000 80 • Thermal Oil underpins growth and low decline 70 30,000 60 • Light Oil provides natural internal cost hedge 50 20,000 40 COMPETITIVE COST STRUCT
Slide 5: Managing for Shareholder Returns
MANAGING FOR SHAREHOLDER RETURNS 2023 CAPITAL ALLOCATION GUIDANCE 2023 CAPITAL ALLOCATION ($MM) $500 o >75% Excess Cash Flow (“ECF”) returned to shareholders • Buy back program to commence April 2023 $400 o Flexibility for additional ECF to be allocated to: $300 • Additional buybacks Normal $200 Cou
Slide 6: Asset Overview
ASSET OVERVIEW
Slide 7: Thermal Oil Division
THERMAL OIL DIVISION PREDICTABLE, LOW DECLINE HIGHLIGHTS THERMAL PROPERTIES 100% Working Interest Fort McMurray ~31,000 bbl/d Q3 2022 Production AOC Hangingstone ~$380MM 2023E Operating Income 2023E Enbridge ~$120MM Capital Expenditures Hangingstone Cheecham 414 MMbbl & Gross Reserves Surmont 1,230
Slide 8: Leismer – Overview
LEISMER – OVERVIEW DEVELOPMENT MAP TOP TIER OIL SANDS PROJECT o ~21,600 bbl/d & 2.9x SOR (November) o Long reserve life • 1.1 Billion barrels (2P + Best Estimate Contingent resource) • ~90 year 2P RLI 2023 ACTIVITY o Pad L8M – 5 wells on‐stream in Q2; ~6,000 bbl/d plateau o Advance 28,000 bbl/d debo
Slide 9: Leismer – Compelling Economics
LEISMER – COMPELLING ECONOMICS ILLUSTRATIVE SUSTAINING PAD ECONOMICS FINANCIAL & ECONOMIC HIGHLIGHTS (US$85 WTI)* o Project underpins corporate cash flow and torque to oil L8 Mid Capital (lease edge) $MM $48 o Low Crown royalties Plateau Rate per project bbl/d 6,000 • 9% max (pre‐payout) vs. 40% (po
Slide 10: Hangingstone – Overview
HANGINGSTONE – OVERVIEW DEVELOPMENT MAP STRATEGIC POSITIONING o Maximize FCF and deliver strong netbacks STRONG RESERVOIR RESPONSE o Excellent facility utilization o Improved SOR due to the field wide NCG co‐injection COST OPTIMIZATION o 5,000 bbl/d third‐party truck‐in terminal o Amended transporta
Slide 11: Light Oil Division
LIGHT OIL DIVISION DE-RISKED, FLEXIBLE CAPITAL HIGHLIGHTS LIGHT OIL PROPERTIES ~6,200 boe/d Q3 2022 Production Kaybob 2023E Net Capital ~$25MM Expenditures ~$80MM 2023E Operating Income ~850 Gross Locations ~280,000 Gross Acres Placid 27 MMboe & Gross Reserves 72 MMboe (Proved & 2P) o Joint Venture
Slide 12: Light Oil – 2023 Activity
LIGHT OIL – 2023 ACTIVITY STRATEGIC OBJECTIVES PLACID MONTNEY o Maintain optionality for future development program 2023 ACTIVITY o 3 Placid Montney development wells • Maximize netbacks and cash flow generation FUTURE ACTIVITY o Land held and de‐risked o Deep inventory: ~150 Montney & ~700 Duvernay
Slide 13: ESG Overview
ESG OVERVIEW
Slide 14: ESG – Annual Report
ESG – ANNUAL REPORT We believe that the responsible energy we produce here in Alberta makes people’s lives better. Our 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 decision we make. “
Slide 15: ESG – Integrated Sustainability
ESG – INTEGRATED SUSTAINABILITY TECHNOLOGY OVERVIEW CARBON CAPTURE – AOC’S LOW‐CARBON BARREL o Entropy Inc. (Entropy) modular carbon capture technology (CCS) • Provisional FID expected in 2023 o Sequestration into regional disposal zones or carbon trunk line ALBERTA BASED INDUSTRY & GOVERNMENT INITI
Slide 16: ESG – Technology Roadmap to Decarbonization
ESG – TECHNOLOGY ROADMAP TO DECARBONIZATION Decarbonization Roadmap HIGHLIGHTS o Track record of utilizing new technologies to improve environmental performance o Evaluate and implement new technologies focused on reducing both intensity and total emissions o Developed a Technology Roadmap to Decarb
Slide 17: ESG – Governance & Social
ESG – GOVERNANCE & SOCIAL GOVERNANCE SOCIAL o Technically‐focused, experienced management team o Contributed 66% of the Provincial Park Lands • Four most senior executives have managed current • Expanded the ecologically and culturally significant portfolio for an aggregate of ~40 years Kitaskino Nu
Slide 18: ESG – Commitment to Responsibility
ESG – COMMITMENT TO RESPONSIBILITY “As we progress, Athabasca will focus on transparency and continuous advancement as we deliver on our commitments to our stakeholders, communities, and employees. We invite you to join us on our ESG journey as we continue to grow and responsibly produce energy in A
Slide 19: Appendix
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 and Rob Broen,
Slide 21: Q3 2022 Highlights
Q3 2022 HIGHLIGHTS 37,240 boe/d (93% Liquids) $102MM Record Adj FFO $50MM FCF; $52MM Capex 2022e 34 – 35,000 boe/d 2022e ~$330MM 2022e $180MM FCF ~$288MM Liquidity Operating Netbacks $227MM Debt Retired YTD Light Oil $39/boe Q3 & $51/boe YTD Inclusive of ~$200MM Cash ~US$175MM Term Debt Outstanding
Slide 22: Capitalization, Hedging, & WCSB Egress
CAPITALIZATION, HEDGING, & WCSB EGRESS UNIQUE LOW LEVERAGE COMPANY CAPITAL STRUCTURE o Net Cash forecasted in Q1 2023 • ~$200MM cash & ~$88MM credit facility capacity o Proactive debt management • $227MM debt repurchased in 2022; $23MM annual servicing savings ~$1,600MM Market o Strategic option for
Slide 23: Tax Pools – Material Value
TAX POOLS – MATERIAL VALUE TAX POOL SUMMARY (Q3 2022) ILLUSTRATIVE TAX POOL VALUATION (NPV10) $250MM annual deduction ~$390MM $0.66/sh $500MM annual ~$3B deduction ~$490MM $0.84/sh $750MM annual deduction ~$530MM $0.91/sh ~$2.3B Fully Maximized ~$590MM $1.01/sh Non‐Capital Loss & Canadian Exploratio
Slide 24: 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 25: Reader Advisory Cont'd
READER ADVISORY CONT’D 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, 2021. There are num
Slide 26: Reader Advisory Cont'd
READER ADVISORY CONT’D Production Athabasca’s 2022 forecasted total average daily production is between 34,000 ‐ 35,000 boe/d. Athabasca expects that approximately 82% of that production will be comprised of bitumen, 8% shale gas, 5% tight oil, 3% condensate natural gas liquids and 2% other natural
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