Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Investor Presentation (December 2023)
23 slides from Athabasca Oil's investor presentation, Dec 6, 2023
Slide 1: Athabasca Oil Corporation 2024 Budget Update
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING 2024 BUDGET UPDATE (12-06-2023)
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. ($3.50/sh)
Slide 3: Why Own Athabasca
WHY OWN ATHABASCA TOP TIER, LONG LIFE MANAGING FOR ASSET BASE SHAREHOLDER RETURNS • ~1.3 billion boe 2P reserves • Top Tier CFPS Growth; Return 100% of Free Cash Flow • Top‐tier Thermal Assets with regulatory approval in to shareholders in 2024 place for expansions • Competive cost structure with ta
Slide 4: Exposure to a Bullish Heavy Oil Thesis
EXPOSURE TO A BULLISH HEAVY OIL THESIS CANADIAN HEAVY DIFFERENTIALS WCS HEAVY DIFFERENTIALS (US$) AOC o Transient headwinds in the rearview mirror ACTUAL FORECAST $‐ • US heavy weighted strategic petroleum reserve releases $(5) • TC Energy Keystone pipeline leak $(10) o Tailwinds expected $(15) • Im
Slide 5: Robust Free Cash Flow Profile
ROBUST FREE CASH FLOW PROFILE PRODUCTION (BOE/D) BUSINESS OUTLOOK 45,000 Production 100 3‐year CAGR per MM share (RHS) 90 o Low‐risk, sustainable capital projects 4% production 13% production per share 80 • Thermal Oil underpins growth and low decline 40,000 70 • Light Oil provides natural internal
Slide 6: Return of Capital Strategy
RETURN OF CAPITAL STRATEGY 2023 SHAREHOLDER RETURNS UPDATE 2023 FULLY DILUTED SHARES o $137MM share repurchases since April 2023 7.5% • 39MM common shares at $3.51/sh avg. price reduction year to date • 67% completed to date on annual Normal Course Issuer Bid limit o Fully diluted shares reduced by
Slide 7: Asset Overview
ASSET OVERVIEW
Slide 8: Thermal Oil Division
THERMAL OIL DIVISION PREDICTABLE, LOW DECLINE THERMAL PROPERTIES HIGHLIGHTS Fort McMurray 100% Working Interest AOC ~31,000 bbl/d Current Production Hangingstone 2024e Capital $135MM Expenditures Enbridge Cheecham Hangingstone 403 MMbbl & Gross Reserves 1,220 MMbbl (Proved & 2P) Surmont ~40 years &
Slide 9: 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 10: Leismer – Overview
LEISMER – OVERVIEW TOP TIER OIL SANDS PROJECT DEVELOPMENT MAP Pad 10 o Long reserve life; 85 year RLI • 698MMbbl 2P reserves; 395MMbbl Best Est. Contingent resource o Excellent reservoir • ~3x long‐term steam oil ratio 2024 ACTIVITY o Growth to 28,000 bbl/d mid‐year • Ramp‐up of eight behind pipe we
Slide 11: 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 12: 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 2024 ACTIVITY o Two well pairs utilizing modern ~1,400 meter laterals o Project capital efficien
Slide 13: Light Oil Division – Kaybob Duvernay
LIGHT OIL DIVISION – KAYBOB DUVERNAY DE-RISKED, FLEXIBLE CAPITAL KAYBOB DUVERNAY HIGHLIGHTS ~2,000 boe/d Current Production 2024e Net Capital $40MM Expenditures Gross Duvernay ~500 Locations ~155,000 Gross Duvernay Acres 6 MMboe & Gross Reserves 23 MMboe (Proved & 2P) ATHABASCA OIL (TSX:ATH) Q4 2023
Slide 14: Kaybob Duvernay – 2024 Activity
KAYBOB DUVERNAY – 2024 ACTIVITY STRATEGIC POSITIONING DUVERNAY ILLUSTRATIVE ECONOMICS o Land held and de‐risked in the oil window ~4,500M HZ & 1,500LB/FT (US$85 WTI)* o Deep inventory (~500 gross locations); strategic infrastructure Capital (DCET) $MM ~$15 o Spending governed by a strong Joint Devel
Slide 15: Appendix
APPENDIX
Slide 16: 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 17: Corporate Capitalization
CORPORATE CAPITALIZATION SENIOR SECOND LIEN NOTES 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 CAPITAL STRUCTURE • Free Cash Flow redemption feature now terminated
Slide 18: 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 19: 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 18
Slide 20: 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 21: 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 22: 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 23: 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 88% of that production will be comprised of bitumen, 5% shale gas, 4% tight oil, 2% condensate natural gas liquids and 1% other natural gas liquids. Ath
Athabasca Oil — Investor Presentation (December 2023) on 6ix