Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Investor Presentation (November 2023)
24 slides from Athabasca Oil's investor presentation, November 2023
Slide 1: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING NOVEMBER 2023
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT ~35,000 BOE/D / 98% LIQUIDS / 5% ANNUAL BASE DECLINE ATHABASCA ASSETS CAPITALIZATION THERMAL OIL THERMAL OIL Dover ~300,000 gross acres o Predictable, low decline projects West Basic Shares (ATH‐TSX) 577MM o Efficient brownfield SAGD development Hangingstone Market Cap. ($4/sh) ~$
Slide 3: Why Own Athabasca
WHY OWN ATHABASCA TOP TIER, LONG LIFE MANAGING FOR ASSET BASE SHAREHOLDER RETURNS • ~1.3 billion boe 2P reserves • Top Tier CFPS Growth; Return >75% of Excess Cash • Top‐tier Thermal Assets with regulatory approval in Flow to shareholders place for expansions • Competive cost structure with tax‐free
Slide 4: 2023 Q3 Results
2023 Q3 RESULTS Record Cash Flow: $141MM 36,176 boe/d (95% Liquids) $33MM Capital AFFO, $108MM FCF 2023e ~34,500 boe/d 2023e $145MM ~$54/bbl Thermal Oil; ~$32/boe Light Oil $113MM Buybacks YTD $425MM Liquidity $155MM Net Cash 33MM Shares (57% of Annual NCIB) $337MM Cash + $88MM Credit Availability U
Slide 5: Exposure to a Bullish Heavy Oil Thesis
EXPOSURE TO A BULLISH HEAVY OIL THESIS CANADIAN HEAVY DIFFERENTIALS WCS HEAVY DIFFERENTIALS (US$) AOC o Transient headwinds in the rearview mirror ACTUAL FORECAST • US heavy weighted strategic petroleum reserve releases • TC Energy Keystone pipeline leak o Tailwinds expected • Improving demand as Ch
Slide 6: 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 7: Return of Capital Strategy
RETURN OF CAPITAL STRATEGY 2023 CAPITAL ALLOCATION GUIDANCE 2023 CAPITAL ALLOCATION FRAMEWORK o >75% Excess Cash Flow (“ECF”) returned to shareholders • Normal Course Issuer Bid (“NCIB”) program commenced in April ~57% completed to date on annual • $113MM share repurchases to Oct. 31 (~33MM common s
Slide 8: Asset Overview
ASSET OVERVIEW
Slide 9: Thermal Oil Division
THERMAL OIL DIVISION PREDICTABLE, LOW DECLINE THERMAL PROPERTIES HIGHLIGHTS Fort McMurray 100% Working Interest AOC ~31,700 bbl/d Q3 Production Hangingstone 2023E ~$120MM Capital Expenditures Enbridge Cheecham Hangingstone 403 MMbbl & Gross Reserves 1,220 MMbbl (Proved & 2P) Surmont ~40 years & Rese
Slide 10: Thermal Oil – Crown Royalty Advantage
THERMAL OIL – CROWN ROYALTY ADVANTAGE CROWN ROYALTY OVERVIEW OIL SANDS ROYALTY RATES o Royalty structure depends on whether a project is in 25‐40% Royalty on Gross Revenue less Opex & Capex pre‐payout or post‐payout phase o Pre‐payout advantage designed to support the recovery of the initial investm
Slide 11: Leismer – Overview
LEISMER – OVERVIEW TOP TIER OIL SANDS PROJECT DEVELOPMENT MAP o Long reserve life; 85 year RLI • 698MMbbl 2P reserves; 395MMbbl Best Est. Contingent resource o Excellent reservoir • <3x long‐term steam oil ratio 2023 ACTIVITY o Pad L8 expansion • New five well pad on‐stream in Q3 o Expansion project
Slide 12: 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 • 9% max (pre‐payout) vs. 40% (post‐payout) at other projects Plateau
Slide 13: Hangingstone – Overview
HANGINGSTONE – OVERVIEW DEVELOPMENT MAP PROJECT HIGHLIGHTS o Long reserve life • 170 MMbbl 2P reserves • ~60 year 2P RLI o Improved SOR due to the field wide NCG co‐injection • ~3.6x average year to date COST OPTIMIZATION o Third‐party truck‐in terminal o Amended transportation contract completed in
Slide 14: Light Oil Division – Kaybob Duvernay
LIGHT OIL DIVISION – KAYBOB DUVERNAY DE-RISKED, FLEXIBLE CAPITAL KAYBOB DUVERNAY HIGHLIGHTS ~2,000 boe/d Current Production 2023E Net Capital ~$25MM Expenditures Gross Duvernay ~500 Locations ~155,000 Gross Duvernay Acres 6 MMboe & Gross Reserves 23 MMboe (Proved & 2P) ATHABASCA OIL (TSX:ATH) 2023 p
Slide 15: Kaybob Duvernay – Overview
KAYBOB DUVERNAY – OVERVIEW STRATEGIC POSITIONING DUVERNAY ILLUSTRATIVE ECONOMICS o Land held and de‐risked in the oil window ~3,000M LATERAL (US$85 WTI)* o Deep inventory of ~500 Duvernay locations (gross) Capital $MM $9.6 o Ownership and operatorship of underutilized infrastructure IP365 boe/d 460
Slide 16: Appendix
APPENDIX
Slide 17: 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 18: Corporate Capitalization
CORPORATE CAPITALIZATION SENIOR SECOND LIEN NOTES CAPITAL STRUCTURE o US$157MM Notes • US$350MM issued October 2021 @ 9.75%; due Q4 2026 • Retired ~US$193MM since inception using Free Cash Flow redemption feature and proactive open market purchases $425MM Liquidity • Free Cash Flow redemption featur
Slide 19: Tax Pools – Material Value
TAX POOLS – MATERIAL VALUE TAX POOL SUMMARY ILLUSTRATIVE TAX POOL VALUATION (NPV10) $250MM annual deduction ~$310MM ~$0.55/sh $500MM annual deduction ~$450MM ~$0.75/sh ~$2.8B $750MM annual deduction ~$500MM ~$0.85/sh Fully Maximized ~$560MM ~$0.95/sh ~$2.3B Non‐Capital Loss & Canadian Exploration Ex
Slide 20: ESG – Commitment to Responsibility
ESG – COMMITMENT TO RESPONSIBILITY ATHABASCA OIL (TSX:ATH) 2023 ESG Report available on our website https://www.atha.com/esg.html 19
Slide 21: ESG – Integrated Sustainability
ESG – INTEGRATED SUSTAINABILITY TECHNOLOGY OVERVIEW CARBON CAPTURE – AOC’S LOW‐CARBON BARREL o Entropy Inc. (Entropy) modular carbon capture technology (CCS) • Project to be sanctioned once government fiscal and regulatory policy for CCS projects are fully in place o Sequestration into regional disp
Slide 22: 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 23: 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, 2022. There are num
Slide 24: Reader Advisory Cont'd
READER ADVISORY CONT’D Production Athabasca’s 2023 forecasted total average daily production is ~34,500 boe/d. Athabasca expects that approximately 86% of that production will be comprised of bitumen, 6% shale gas, 4% tight oil, 2% condensate natural gas liquids and 2% other natural gas liquids. Liq
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