Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Q3 2024 Earnings Presentation
28 slides from Athabasca Oil's earnings presentation, Oct 30, 2024
Slide 1: Athabasca Oil Corporation Q3 2024 Results
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING OCTOBER 30, 2024 – Q3 2024 RESULTS
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT ~39,000 BOE/D / 98% LIQUIDS / ~5% ANNUAL BASE DECLINE ATHABASCA ASSETS CAPITALIZATION (CONSOLIDATED) THERMAL OIL THERMAL OIL Dover ~300,000 gross acres o Predictable, low decline projects West Basic Shares (ATH‐TSX) 533MM o Efficient brownfield SAGD development Hangingstone Market
Slide 3: Q3 2024 Results
Q3 2024 RESULTS Production Funds Flow Netbacks 38,909 boe/d (98% Liquids) $164MM Adj. Funds Flow $50/bbl Thermal Op. Netback $0.30 per share, 30% Y/Y growth $44/boe Duvernay Op. Netback 2024e guidance of 36,000 – 37,000 boe/d 2024e guidance of ~$555MM Capital Return of Capital Liquidity $44MM AOC (T
Slide 4: Robust Free Cash Flow Profile
ROBUST FREE CASH FLOW PROFILE NET PRODUCTION (BOE/D)1 BUSINESS OUTLOOK o Thermal Oil assets with low base decline 3‐year CAGR (2024‐2027) • Leismer brownfield growth to 40,000 bbl/d 13% production >20% production per share o Duvernay Energy enhances growth • Self‐funded & independent capital allocat
Slide 5: Return of Capital Strategy
RETURN OF CAPITAL STRATEGY DELIBERATE DELEVERAGING CAPITALIZATION Market Cap ~$2.7B o ~$385MM debt reduction since Fall 2021 Total Debt $200MM o $200MM term debt conservatively sized • <10% Total Debt to Capitalization • <0.5x Total Debt to 2024e Thermal Oil funds flow Total Debt/ Capitalization <10
Slide 6: Exposure to a Bullish Heavy Oil Thesis
EXPOSURE TO A BULLISH HEAVY OIL THESIS WCS HEAVY DIFFERENTIALS (US$) AOC ACTUAL CANADIAN HEAVY DIFFERENTIALS FORECAST o Positive structural changes for Canadian heavy oil • Trans Mountain Expansion (+590 mbbl/d); May 1st start‐up o Stronger and less volatile WCS heavy pricing expected • Canadian oil
Slide 7: Thermal Oil – Asset Overview
» pT ae THERMAL OIL - ASSET OVERVIEW
Slide 8: Thermal Oil Division
THERMAL OIL DIVISION PREDICTABLE, LOW DECLINE HIGHLIGHTS THERMAL PROPERTIES 100% Working Interest Fort McMurray 34,853 bbl/d Q3 2024 Production AOC Hangingstone 2024e Capital ~$195MM Expenditures Enbridge 404MMbbl | ~30 yr Proved Reserves & RLI Hangingstone Cheecham 1,216MMbbl | ~70 yr 2P Reserves &
Slide 9: Leismer – Overview
LEISMER – OVERVIEW TOP TIER OIL SANDS PROJECT DEVELOPMENT MAP Pad 10 4 well pairs o Long reserve life; ~70 year current reserve life index • 697MMbbl 2P reserves; 384MMbbl Best Est. Contingent resource • ~50 year 2P RLI at 40,000 bbl/d o Excellent reservoir underpins low corporate decline Pad 8 Sout
Slide 10: Leismer – 40,000 bbl/d Expansion
LEISMER – 40,000 BBL/D EXPANSION HISTORICAL PRODUCTION & GROWTH OUTLOOK (BBL/D) PROJECT OVERVIEW 40,000 Project Cost ~$300MM 30,000 Incremental Rate 12,000 bbl/d Capital Efficiency ~$25,000/bbl 20,000 IRR >35% 10,000 Growth to ~28,000 bbl/d Leismer NPV10 @ 40,000 bbl/d sanctioned in 2023 budget $3.3
Slide 11: Hangingstone – Overview
HANGINGSTONE – OVERVIEW DEVELOPMENT MAP PROJECT HIGHLIGHTS o Long reserve life; ~65 year reserve life index • 167 MMbbl 2P reserves o Improved SOR due to the field wide NCG co‐injection • 3.4x year to date average 2024 ACTIVITY (~$30MM) o Two sustaining well pairs • ~1,400 meter laterals • Competiti
Slide 12: Corner – Overview
CORNER – OVERVIEW REGIONAL MAP TOP TIER OIL SANDS PROJECT o Large De‐risked Asset • 351 MMbbl 2P reserves and 520 MMbbl Contingent Resource (Best Est.) • 304 delineation wells with ~80% 3D seismic coverage o High Quality Reservoir • Up to ~45 m of pay in initial development with high quality sands •
Slide 13: Duvernay Energy Corporation
DUVERNAY ENERGY CORPORATION
Slide 14: Duvernay Energy – Corporate Snapshot
DUVERNAY ENERGY – CORPORATE SNAPSHOT CREATION OF NEW PRIVATE COMPANY DUVERNAY ENERGY ASSETS o Athabasca and Cenovus combine Duvernay assets • Athabasca to operate Duvernay Energy (“DEC”) Halo Energy o Unparalleled exposure to Kaybob Duvernay oil window GMT Exploration Hitic Energy o Debt‐free entity
Slide 15: Duvernay Energy – Kaybob Activity Map
DUVERNAY ENERGY – KAYBOB ACTIVITY MAP Chevron Cygnet GMT Oil Halo Hitic Window Kiwetinohk Paramount PetroChina Veren Liquids Rich Whitecap Gas Window DEC 30% JV ASSETS Duvernay Hz Wells 2024 Duv. spuds DEC 100% NEW OPERATED ASSETS 2023 Duv. Spuds DEC 2024 Multi‐well pads DEC 2025 Multi‐well pads ATH
Slide 16: Duvernay Energy – Development Plans
DUVERNAY ENERGY – DEVELOPMENT PLANS KAYBOB EAST ILLUSTRATIVE ECONOMICS 2024 ACTIVITY (~$75MM CAPITAL) 4,000M LATERAL & 1,000 LB/FT (US$80 WTI) o 100% working interest operated activity 2‐WELL 4+ MULTI PAD WELL PAD • Two‐well pad (03‐18‐64‐17W5) on‐stream in late April Capital (DCET) per well $MM $14
Slide 17: Why Own Athabasca
WHY OWN ATHABASCA TOP TIER, LONG LIFE MANAGING FOR ASSET BASE SHAREHOLDER RETURNS • ~1.2 billion boe 2P reserves; ~1 billion bbl cont. resource • >$1 Billion Free Cash Flow at US$70 WTI (2024‐27) • Top‐tier Thermal Assets with regulatory approval in place • Top Tier CFPS Growth; Return 100% of Free
Slide 18: Appendix
APPENDIX
Slide 19: Management Team
MANAGEMENT TEAM o President and Chief Executive Officer since 2015; 12 Years at Athabasca Rob Broen, P.Eng. o Over 30 years of exploration and production experience including 18 years with Talisman Energy with roles as President & Chief Executive President, Talisman Energy USA Inc. and Senior Vice P
Slide 20: Capitalization & Hedging
CAPITALIZATION & HEDGING LONG‐TERM DEBT CONSOLIDATED CAPITAL STRUCTURE o C$200MM 2029 Notes • Issued August 2024; 5‐year term to 2029 • 6.75% coupon ~$2,700MM Market Cap STRONG LIQUIDITY ($5/share) o AOC Liquidity of ~$375MM, including $304MM cash $31MM DEC Cash o DEC Liquidity of ~$80MM, including
Slide 21: Differentiated Long-Life Reserves
DIFFERENTIATED LONG-LIFE RESERVES 2023 RESERVE OVERVIEW 2P RESERVES BY ASSET (MMBOE) o Deep resource inventory 167 • ~1.2 billion boe 2P reserves; ~100 year reserve life • ~1 billion bbl contingent resource 351 • 113 of ~500 gross estimated Duvernay locations booked 697 o Significant intrinsic value
Slide 22: Valuable Tax Pools
VALUABLE TAX POOLS TAX POOL SUMMARY (Q3 2024) ILLUSTRATIVE TAX POOL VALUATION (NPV10) $250MM annual deduction ~$270MM ~$0.50/sh $500MM annual deduction ~$420MM ~$0.80/sh ~$2.4B $750MM annual deduction ~$470MM ~$0.90/sh Fully Maximized ~$530MM ~$1.00/sh ~$1.9B Tax pool valuations as at September 30,
Slide 23: 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 24: Duvernay Energy – Infrastructure
DUVERNAY ENERGY – INFRASTRUCTURE INFRASTRUCTURE ADVANTAGE o Operated strategic infrastructure o Underutilized capacity with flexibility for future expansions o Oil infrastructure directly connected to the Pembina Peace liquids system o Gas infrastructure dually connected to Pembina Gas Infrastructur
Slide 25: Kaybob Duvernay >1,000 Industry Wells
KAYBOB DUVERNAY >1,000 INDUSTRY WELLS 2010‐2014 HISTORICAL SPUDS BY OPERATOR ~240 WELLS 150 Athabasca/Murphy Crescent Point 125 Chevron/KUFPEC Kiwetinohk & PetroChina Whitecap 100 75 2015‐16 ~500 WELLS CTD 50 25 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2017‐18 ~750 WEL
Slide 26: Reader Advisory
READER ADVISORY Forward Looking Statements This Presentation contains forward‐looking information that involves various risks, uncertainties and other factors. Within this Reader Advisory and Forward Looking Statements, references to the “Company” means Athabasca and Duvernay Energy, as and where ap
Slide 27: Reader Advisory Cont'd
READER ADVISORY CONT’D Initial Production Rates Test Results and Initial Production Rates: The well test results and initial production rates provided herein should be considered to be preliminary, except as otherwise indicated. Test results and initial production rates disclosed herein may not nece
Slide 28: Reader Advisory Cont'd
READER ADVISORY CONT’D The Cash Financing and Interest Expense financial measures contained in the Presentation are calculated by subtracting the net non‐cash financing and interest expense as reported in the Consolidated Statement of Cash Flows from the financing and interest expense as reported in