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CALGARY, Alberta, Might 03, 2022 (GLOBE NEWSWIRE) — Athabasca Oil Company (TSX: ATH) (“Athabasca” or the “Firm”) is happy to report its 2022 first quarter outcomes with report Free Money Movement and materials deleveraging. Athabasca is uniquely positioned as a low leveraged firm producing vital Free Money Movement by means of its low-decline, oil weighted asset base.
Q1 Company Highlights
- Manufacturing above Steering: 34,679 boe/d (92% Liquids) consisting of 27,909 bbl/d in Thermal Oil and 6,770 boe/d (57% Liquids) in Mild Oil, forward year-to-date of annual steerage of 33-34,000 boe/d.
- Capital Expenditures: $31 million targeted on sustaining operations in Thermal Oil and three Duvernay nicely completions.
- Document Money Movement: Document Adjusted Funds Movement ~$75 million and report Free Money Movement ~$44 million. Continued money stream growth anticipated by means of 2023 as described under.
- Document Working Netbacks: $48.79/bbl at Leismer, $43.48/bbl at Hangingstone and $48.92/boe in Mild Oil.
- Vital Deleveraging: Redeemed $110 million in Time period Debt year-to-date (inclusive of excellent redemption notices), reaching ~50% of US$175 million debt discount goal which is anticipated to be reached in H1 2023. Low present Web Debt of ~$127 million.
- Unlocking Shareholder Worth: Dedicated to additional improve shareholder returns by using Free Money Movement and money balances for share buy-backs or dividends as soon as debt goal is achieved.
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Operational Highlights
- Deal with Leismer: The Leismer Pad L8 (5 nicely pairs) ramp-up is exceeding the Firm’s expectations and is at the moment producing in extra of two,500 bbl/d. The pad is anticipated to achieve ~5,400 bbl/d in H2 2022 and can assist a ~21,000 bbl/d exit fee this yr. Starting in June, the Firm anticipates spudding an extra two infill wells at Pad L6, adopted by 5 further nicely pairs at Pad L8, with new manufacturing anticipated in 2023. The Leismer asset is forecasted to develop to ~24,000 bbl/d over the subsequent three years inside company capital steerage.
- Excessive Margin Duvernay: Throughout the quarter three Duvernay wells at Two Creeks have been accomplished with IP30’s between 650 – 1,000 boe/d (averaging 840 boe/d per nicely, 94% Liquids), exceeding inside sort curve expectations and screening as prime oil wells in Alberta. The Firm has a versatile growth portfolio of ~850 de-risked Montney and Duvernay areas together with strategic possession and operatorship of liquids and fuel infrastructure in Higher Kaybob. These belongings present a pure hedge for the Thermal Oil division by means of their manufacturing of diluent and pure fuel.
- Document Netbacks: Athabasca’s oil weighted portfolio is benefiting from robust commodity costs and low price buildings. This fee of change is mirrored within the Firm’s March netbacks: Kaybob Duvernay ~$72.25/boe, Placid Montney ~$44.25/boe, Leismer ~$61.50/bbl and Hangingstone ~$58.50/bbl.
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Strategic Replace and Company Outlook
- Sustaining 2022 Steering. The Firm reiterates its 33,000 – 34,000 boe/d (92% Liquids) annual manufacturing steerage together with Capital Expenditure steerage of $128 million. The Firm’s modest 2022 capital program is indicative of long run sustaining capital that advantages from a low decline, massive useful resource asset base.
- Managing for Free Money Movement. For 2022, Athabasca forecasts Adjusted EBITDA of ~$350 million, Adjusted Funds Movement of ~$300 million and Free Money Movement of ~$180 million (US$85 WTI, US$13.50 Western Canadian Choose “WCS” heavy differential). The Firm additional expects to generate ~$900 million in Free Money Movement in the course of the three yr timeframe of 2022-24 (US$85 WTI, US$12.50 WCS differential flat pricing). Each $5 WTI impacts Free Money Movement by ~$45 million yearly (unhedged). The Firm’s robust margins and Free Money Movement profile is supported by $3.1 billion in tax swimming pools and a pre-payout Crown royalty construction for its Thermal Oil belongings.
- Executing Vital Deleveraging with Clear Targets: The Firm is planning to make the most of 100% of close to‐time period Free Money Movement to cut back its Time period Debt and is anticipating being in a internet money place by yr finish 2022 at present commodity costs. Yr-to-date the Firm has redeemed a complete of C$57 million (US$45 million) by means of open market purchases. The Firm has additionally supplied redemption notices to noteholders for an extra C$53 million (US$41 million) from warrant proceeds and the Free Money Movement cost function inside the indenture. These redemptions are anticipated to be accomplished by mid-Might. Professional forma, the Firm can have redeemed and retired a complete of C$110 million (US$86 million) in its Time period Debt. This achieves roughly ~50% of its US$175 million debt discount goal which is anticipated to be reached in H1 2023.
- Glorious Publicity to Commodity Value Upside: Athabasca has retained glorious publicity to upside in commodity costs with 50% of its 2022 gross sales volumes unhedged, 20% of its gross sales hedged by means of collars with upside to US$115 WTI, and 30% of its gross sales hedged by means of fastened swaps at an implied US$67.50 WTI. The Firm has minimal hedging in 2023 and expects decrease future hedge ranges to guard its base capital program as debt targets are achieved.
- Thermal Oil Differentiation: Athabasca’s Thermal belongings function in a pre-payout Crown royalty construction, with royalty charges between 5 – 9%, and is anticipated to final past 2028 (US$85 WTI, US$12.50 WCS differential flat pricing). This ends in most money stream at present commodity costs and creates a major benefit over the vast majority of Trade oil sands tasks. The Firm’s low decline, lengthy reserve life Thermal Oil belongings are forecasted to generate ~$400 million in Working Earnings in 2022 (US$85 WTI, US$13.50 WCS differential flat pricing). At present commodity costs, these belongings compete exceptionally nicely on all money stream metrics towards prime performs in North America with capital investments producing double-digit Recycle and Revenue-to-Funding Ratios.
- Unlocking Shareholder Worth: The transition of enterprise worth to fairness holders is materializing and is anticipated to unlock vital shareholder worth. Athabasca is dedicated to additional enhancing shareholder returns by using Free Money Movement and money balances for share buy-backs or dividends as soon as its debt goal is achieved. The Firm sees great intrinsic worth not mirrored within the present share worth. Extra steerage on the Firm’s return of capital technique shall be supplied in H2 2022.
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Environmental, Social and Governance (“ESG”) Replace
- Annual Report. Athabasca is proud to publish its second ESG report, aligning to main ESG requirements and frameworks together with World Reporting Initiative (“GRI”), Sustainability Accounting Requirements Board (“SASB”) and Job Pressure for Local weather Disclosure (“TCFD”) pointers. The report is obtainable on the Firm’s web site (https://www.atha.com/duty.html) and SEDAR (https://www.sedar.com).
- Carbon Seize and Storage (CCS). Athabasca has superior its partnership with Entropy Inc. to develop and implement a carbon seize and storage undertaking at Leismer utilizing Entropy’s proprietary CCS know-how. The partnership is progressing detailed engineering plans and has developed a business mannequin for funding that aligns with lowering carbon emissions and helps the Firm’s future aspiration of manufacturing a net-zero oil sands barrel.
- Atmosphere. The Firm has a robust observe report of using new know-how to enhance environmental efficiency, having invested over $60 million in know-how designed to mitigate GHG emissions since 2015. By 2025, Athabasca has a objective to cut back Scope 1 emissions depth by 30% from its 2015 baseline.
- Social. Athabasca’s security tradition is deeply embedded and the Firm’s whole recordable damage frequency has averaged 0.2 per 200,000 man-hours during the last three years, nicely under business common. The Firm has additionally had zero reportable hydrocarbon spills for 3 consecutive years.
- Governance. Unbiased Board with established and strong company insurance policies. The Firm’s ESG technique and efficiency is reviewed, thought of, and absolutely built-in on the Board stage.
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Annual Common Assembly
Athabasca is happy to announce that Mr. Marty Proctor and Ms. Angela Avery will stand for election as administrators to the Firm’s Board of Administrators on the upcoming digital Annual Common Assembly (“Assembly”) on Wednesday, Might 4, 2022 at 9:00 am (MT).
Mr. Proctor has held a number of senior govt positions, together with most not too long ago as President and Chief Government Officer of Seven Generations Power, and at the moment serves in numerous board capacities throughout the power sector. He has vital experience in operations, engineering and enterprise technique, and was on the administration workforce of North American Oilsands, an authentic proprietor of lands in Athabasca’s Leismer and Nook areas.
Ms. Avery is at the moment the Government Vice President, Exterior Affairs and Common Counsel at WestJet and has greater than 25 years’ authorized and enterprise expertise, and an intensive regulatory and compliance background. She served as Common Counsel and VP Enterprise Growth at Athabasca from 2017 to 2020 and previous to that held senior govt roles at ConocoPhillips.
The Board want to lengthen its honest because of Mr. Carlos Fierro and Ms. Anne Downey who’re retiring from the Board on Might 4, 2022, for his or her years of devoted service to Athabasca and our shareholders. Mr. Fierro and Ms. Downey have made vital contributions to the Board and its committees, together with chairing the Audit Committee and Reserves Committee, respectively.
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Shareholders and friends can hearken to the Assembly through reside webcast at:
https://internet.lumiagm.com/430317815
with further particulars obtainable at:
https://www.atha.com/traders/presentation-events.html.
An archived recording of the webcast shall be obtainable on the Firm’s web site for these unable to hear reside.
Monetary and Operational Highlights
Three months ended March 31, |
||||||||
($ Hundreds, until in any other case famous) | 2022 | 2021 | ||||||
CONSOLIDATED | ||||||||
Petroleum and pure fuel manufacturing (boe/d)(1) | 34,679 | 34,401 | ||||||
Petroleum, pure fuel and midstream gross sales | $ | 389,424 | $ | 211,656 | ||||
Working Earnings (Loss)(1) | $ | 150,640 | $ | 65,928 | ||||
Working Earnings (Loss) Web of Realized Hedging(1)(2) | $ | 102,994 | $ | 44,815 | ||||
Working Netback ($/boe)(1) | $ | 47.40 | $ | 21.12 | ||||
Working Netback Web of Realized Hedging ($/boe)(1)(2) | $ | 32.41 | $ | 14.36 | ||||
Capital expenditures | $ | 30,929 | $ | 35,554 | ||||
Free Money Movement(1) | $ | 43,832 | $ | (16,593 | ) | |||
THERMAL OIL DIVISION | ||||||||
Bitumen manufacturing (bbl/d) | 27,909 | 25,949 | ||||||
Petroleum, pure fuel and midstream gross sales | $ | 360,281 | $ | 186,710 | ||||
Working Earnings (Loss)(1) | $ | 120,837 | $ | 42,168 | ||||
Working Netback ($/bbl)(1) | $ | 47.04 | $ | 17.85 | ||||
Capital expenditures | $ | 21,182 | $ | 33,014 | ||||
LIGHT OIL DIVISION | ||||||||
Petroleum and pure fuel manufacturing (boe/d)(1) | 6,770 | 8,452 | ||||||
Proportion Liquids (%)(1) | 57 | % | 57 | % | ||||
Petroleum, pure fuel and midstream gross sales | $ | 45,108 | $ | 34,572 | ||||
Working Earnings (Loss)(1) | $ | 29,803 | $ | 23,760 | ||||
Working Netback ($/boe)(1) | $ | 48.92 | $ | 31.24 | ||||
Capital expenditures | $ | 7,987 | $ | 968 | ||||
CASH FLOW AND FUNDS FLOW | ||||||||
Money stream from working actions | $ | 59,862 | $ | 1,138 | ||||
per share – primary | $ | 0.11 | $ | — | ||||
Adjusted Funds Movement(1) | $ | 74,761 | $ | 18,961 | ||||
per share – primary | $ | 0.14 | $ | 0.04 | ||||
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||
Web revenue (loss) and complete revenue (loss) | $ | (119,601 | ) | $ | (17,472 | ) | ||
per share – primary | $ | (0.23 | ) | $ | (0.03 | ) | ||
per share – diluted | $ | (0.23 | ) | $ | (0.03 | ) | ||
COMMON SHARES OUTSTANDING | ||||||||
Weighted common shares excellent – primary | 531,091,102 | 530,675,391 | ||||||
Weighted common shares excellent – diluted | 531,091,102 | 530,675,391 |
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March 31, | December 31, | |||||
As at ($ Hundreds) | 2022 | 2021 | ||||
LIQUIDITY AND BALANCE SHEET | ||||||
Money and money equivalents | $ | 213,534 | $ | 223,056 | ||
Accessible credit score amenities(3) | $ | 77,838 | $ | 77,844 | ||
Face worth of time period debt(4) | $ | 396,123 | $ | 443,730 |
(1) Seek advice from the “Reader Advisory” part inside this information launch for added data on Non-GAAP Monetary Measures and manufacturing disclosure.
(2) Consists of realized commodity threat administration lack of $47.6 million for the three months ended March 31, 2022 (three months ended March 31, 2021 – $21.1 million loss).
(3) Consists of obtainable credit score below Athabasca’s Credit score Facility and Unsecured Letter of Credit score Facility.
(4) The face worth of the time period debt at March 31, 2022 was US$317 million (December 31, 2021 – US$350 million) translated into Canadian {dollars} on the March 31, 2022 trade fee of US$1.00 =C$1.2496 (December 31, 2021 – C$1.2678).
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Operations Replace
Thermal Oil
Bitumen manufacturing for Q1 2022 averaged 27,909 bbl/d. The Thermal Oil division generated report Working Earnings of $121 million. Q1 2022 Working Netbacks for Leismer and Hangingstone have been a report $48.79/bbl and $43.48/bbl, respectively. Capital expenditures have been $21 million.
For 2022 the Firm has absolutely hedged its Thermal Oil fuel enter prices by means of its Mild Oil fuel manufacturing with the stability financially hedged at C$4/mcf AECO.
Leismer
Bitumen manufacturing for Q1 2022 averaged 18,966 bbl/d and ~20,000 bbl/d in April. Leismer has a scheduled two week plant turnaround in Might which is accomplished each 4 years.
At Pad L8, three wells have been transformed to manufacturing in January, with the remaining wells to be positioned on manufacturing in early Q2. Volumes are forecasted to develop by means of the yr as Pad L8 ramps-up to its anticipated plateau fee of ~5,400 bbl/d (5 nicely pairs). Leismer is anticipated to exit 2022 at ~21,000 bbl/d and develop to ~24,000 bbl/d over the subsequent three years inside company capital steerage.
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The present L8 gathering pipeline and infrastructure will assist future growth for a complete of 14 nicely pairs on Pad L8. In June the Firm will spud two further infill wells at Pad L6 adopted by 5 further nicely pairs at Pad L8. These wells will assist manufacturing in 2023 and have unparalleled Revenue-to-Funding Ratios (NPV/Funding) of ~10x and double-digit Recycle Ratios at present commodity costs.
The Firm has expanded non-condensable fuel (“NCG”) co-injection throughout the sector on mature pads supporting decrease power depth with a present undertaking steam oil ratio (“SOR”) of ~3.2x (March 2022).
Leismer has a major Unrecovered Capital Stability of $1.6 billion which ensures a low Crown royalty framework because the asset is forecasted to stay pre-payout till 2028 (US$85 WTI, US$12.50 WCS differential).
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Hangingstone
Bitumen manufacturing for Q1 2022 averaged 8,943 bbl/d. Manufacturing in the course of the quarter was impacted by a delay in getting service rigs for routine pump repairs. Full manufacturing has since been re-established above 9,000 bbl/d in April. NCG co-injection is aiding in stress assist and diminished power utilization and the undertaking achieved a report low SOR of ~3.7x in February 2022.
In 2022, Hangingstone can have no capital allocation apart from routine pump replacements. Sturdy operational efficiency, price enhancements and improved commodity costs are driving aggressive margins. The Hangingstone asset is anticipated to generate ~$130 million Working Earnings in 2022 (April 4th strip pricing: US$94 WTI, US$13 WCS differential).
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Mild Oil
Manufacturing averaged 6,770 boe/d (57% Liquids) in Q1 2022. The enterprise division generated Working Earnings of $30 million with a report Working Netback of$48.92/boe. Athabasca’s Mild Oil Netbacks proceed to be prime quartile when in comparison with Alberta’s different liquids-rich Montney and Duvernay useful resource producers and are supported by a excessive liquids weighting. Capital expenditures have been $8 million in the course of the quarter.
Placid Montney
At Higher Placid, manufacturing averaged 3,565 boe/d (43% Liquids) in Q1 2022 with an Working Netback of $38.86/boe. Placid is positioned for versatile future growth with a listing of ~150 gross drilling areas and minimal near-term land retention necessities.
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Kaybob Duvernay
At Higher Kaybob, manufacturing averaged 3,205 boe/d (72% Liquids) in Q1 2022 with an Working Netback of $60.11/boe.
Three Duvernay wells within the oil window at Two Creeks have been not too long ago accomplished. IP30’s for the wells have been between 650 – 1,000 boe/d (averaging 840 boe/d, 94% Liquids). Athabasca’s prior 12 wells at Kaybob East and Two Creeks have averaged IP180s of ~725 boe/d (85% Liquids) and IP365s of ~550 boe/d (83% Liquids). Sturdy nicely outcomes coupled with a big nicely stock (~700 gross drilling areas) and versatile growth timing point out vital worth to Athabasca.
The Kaybob space is supported by a robust Joint Growth Settlement, established operated infrastructure and minimal near-term land retention necessities. The Firm stays inspired by competitor exercise and up to date new entrants into the play.
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About Athabasca Oil Company
Athabasca Oil Company is a Canadian power firm with a targeted technique on the event of thermal and light-weight oil belongings. Located in Alberta’s Western Canadian Sedimentary Basin, the Firm has amassed a major land base of intensive, top quality assets. Athabasca’s widespread shares commerce on the TSX below the image “ATH”. For extra data, go to www.atha.com.
For extra data, please contact:
Matthew Taylor
Chief Monetary Officer
1-403-817-9104
mtaylor@atha.com
Robert Broen
President and CEO
1-403-817-9190
rbroen@atha.com
Reader Advisory:
This Information Launch accommodates forward-looking data that entails numerous dangers, uncertainties and different components. All data apart from statements of historic truth is forward-looking data. Using any of the phrases “anticipate”, “plan”, “proceed”, “estimate”, “count on”, “might”, “will”, “goal”, “forecast”, “objective”, “aspiration”, “commit” and related expressions are supposed to determine forward-looking data. The forward-looking data isn’t historic truth, however somewhat relies on the Firm’s present plans, goals, targets, methods, estimates, assumptions and projections in regards to the Firm’s business, enterprise and future working and monetary outcomes. This data entails recognized and unknown dangers, uncertainties and different components which will trigger precise outcomes or occasions to vary materially from these anticipated in such forward-looking data. No assurance might be provided that these expectations will show to be right and such forward-looking data included on this Information Launch shouldn’t be unduly relied upon. This data speaks solely as of the date of this Information Launch. Particularly, this Information Launch accommodates forward-looking data pertaining to, however not restricted to, the next: our strategic plans; future debt ranges and compensation plans; the allocation of future capital; timing for shareholder returns together with share buybacks and dividends, our drilling plans in Leismer; Leismer ramp-up to anticipated manufacturing charges; timing of Leismer’s pre-payout royalty standing; the frequency of plant turnarounds at Leismer; anticipated working outcomes at Hangingstone; Adjusted EBITDA, Adjusted Funds Movement and Free Money Movement in 2022; the influence of decrease future hedge ranges; sort nicely financial metrics; forecasted each day manufacturing and the composition of manufacturing; our ESG targets; and different issues.
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As well as, data and statements on this Information Launch referring to “Reserves” and “Assets” are deemed to be forward-looking data, as they contain the implied evaluation, primarily based on sure estimates and assumptions, that the reserves and assets described exist within the portions predicted or estimated, and that the reserves and assets described might be profitably produced sooner or later. With respect to forward-looking data contained on this Information Launch, assumptions have been made concerning, amongst different issues: commodity costs; the regulatory framework governing royalties, taxes and environmental issues within the jurisdictions by which the Firm conducts and can conduct enterprise and the consequences that such regulatory framework can have on the Firm, together with on the Firm’s monetary situation and outcomes of operations; the Firm’s monetary and operational flexibility; the Firm’s monetary sustainability; Athabasca’s money stream break-even commodity worth; the Firm’s capability to acquire certified employees and gear in a well timed and cost-efficient method; the applicability of applied sciences for the restoration and manufacturing of the Firm’s reserves and assets; future capital expenditures to be made by the Firm; future sources of funding for the Firm’s capital applications; the Firm’s future debt ranges; future manufacturing ranges; the Firm’s capability to acquire financing and/or enter into three way partnership preparations, on acceptable phrases; working prices; compliance of counterparties with the phrases of contractual preparations; influence of accelerating competitors globally; assortment threat of excellent accounts receivable from third events; geological and engineering estimates in respect of the Firm’s reserves and assets; recoverability of reserves and assets; the geography of the areas by which the Firm is conducting exploration and growth actions and the standard of its belongings. Sure different assumptions associated to the Firm’s Reserves and Assets are contained within the report of McDaniel & Associates Consultants Ltd. (“McDaniel”) evaluating Athabasca’s Proved Reserves, Possible Reserves and Contingent Assets as at December 31, 2021 (which is respectively referred to herein because the “McDaniel Report”).
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Precise outcomes might differ materially from these anticipated on this forward-looking data on account of the chance components set forth within the Firm’s Annual Info Kind (“AIF”) dated March 2, 2022 obtainable on SEDAR at www.sedar.com, together with, however not restricted to: weak spot within the oil and fuel business; exploration, growth and manufacturing dangers; costs, markets and advertising and marketing; market circumstances; local weather change and carbon pricing threat; statutes and laws concerning the setting; regulatory setting and adjustments in relevant legislation; gathering and processing amenities, pipeline techniques and rail; fame and public notion of the oil and fuel sector; setting, social and governance targets; political uncertainty; continued influence of the COVID-19 pandemic; state of capital markets; capability to finance capital necessities; entry to capital and insurance coverage; abandonment and reclamation prices; altering demand for oil and pure fuel merchandise; anticipated advantages of acquisitions and inclinations; royalty regimes; overseas trade charges and rates of interest; reserves; hedging; operational dependence; working prices; undertaking dangers; provide chain disruption; monetary assurances; diluent provide; third get together credit score threat; indigenous claims; reliance on key personnel and operators; revenue tax; cybersecurity; superior applied sciences; hydraulic fracturing; legal responsibility administration; seasonality and climate circumstances; surprising occasions; inside controls; limitations of insurance coverage; litigation; pure fuel overlying bitumen assets; competitors; chain of title and expiration of licenses and leases; breaches of confidentiality; new business associated actions or new geographical areas; and dangers associated to our debt and securities.
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Additionally included on this Information Launch are estimates of Athabasca’s 2022 Outlook that are primarily based on the varied assumptions as to manufacturing ranges, commodity costs, foreign money trade charges and different assumptions disclosed on this Information Launch. To the extent any such estimate constitutes a monetary outlook, it was accepted by administration and the Board of Administrators of Athabasca, and is included to offer readers with an understanding of the Firm’s outlook. Administration doesn’t have agency commitments for the entire prices, expenditures, costs or different monetary assumptions used to organize the monetary outlook or assurance that such working outcomes shall be achieved and, accordingly, the entire monetary results of all of these prices, expenditures, costs and working outcomes should not objectively determinable. The precise outcomes of operations of the Firm and the ensuing monetary outcomes might range from the quantities set forth herein, and such variations could also be materials. The monetary outlook contained on this New Launch was made as of the date of this Information launch and the Firm disclaims any intention or obligations to replace or revise such monetary outlook, whether or not on account of new data, future occasions or in any other case, until required pursuant to relevant legislation.
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Oil and Fuel Info
“BOEs” could also be deceptive, notably if utilized in isolation. A BOE conversion ratio of six thousand cubic toes of pure fuel to 1 barrel of oil equal (6 Mcf: 1 bbl) relies on an power equivalency conversion methodology primarily relevant on the burner tip and doesn’t signify a price equivalency on the wellhead. As the worth ratio between pure fuel and crude oil primarily based on the present costs of pure fuel and crude oil is considerably completely different from the power equivalency of 6:1, using a conversion on a 6:1 foundation could also be deceptive as a sign of worth.
Preliminary Manufacturing Charges
Check Outcomes and Preliminary Manufacturing Charges: The nicely take a look at outcomes and preliminary manufacturing charges supplied on this presentation must be thought of to be preliminary, besides as in any other case indicated. Check outcomes and preliminary manufacturing charges disclosed herein might not essentially be indicative of long-term efficiency or of final restoration.
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Reserves Info
The McDaniel Report was ready utilizing the assumptions and methodology pointers outlined within the COGE Handbook and in accordance with Nationwide Instrument 51-101 Requirements of Disclosure for Oil and Fuel Actions, efficient December 31, 2021. There are quite a few uncertainties inherent in estimating portions of bitumen, mild crude oil and medium crude oil, tight oil, standard pure fuel, shale fuel and pure fuel liquids reserves and the long run money flows attributed to such reserves. The reserve and related money stream data set forth above are estimates solely. Generally, estimates of economically recoverable reserves and the long run internet money flows therefrom are primarily based upon a variety of variable components and assumptions, corresponding to historic manufacturing from the properties, manufacturing charges, final reserve restoration, timing and quantity of capital expenditures, marketability of oil and pure fuel, royalty charges, the assumed results of regulation by governmental companies and future working prices, all of which can range materially. For these causes, estimates of the economically recoverable reserves attributable to any explicit group of properties, classification of such reserves primarily based on threat of restoration and estimates of future internet revenues related to reserves ready by completely different engineers, or by the identical engineers at completely different instances, might range. The Firm’s precise manufacturing, revenues, taxes and growth and working expenditures with respect to its reserves will range from estimates thereof and such variations may very well be materials. Reserves figures described herein have been rounded to the closest MMbbl or MMboe. For added data concerning the consolidated reserves and data in regards to the assets of the Firm as evaluated by McDaniel within the McDaniel Report, please confer with the Firm’s AIF.
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Reserve Values (i.e. Web Asset Worth) is calculated utilizing the estimated internet current worth of all future internet income from our reserves, earlier than revenue taxes discounted at 10%, as estimated by McDaniel efficient December 31, 2021 and primarily based on common pricing of McDaniel, Sproule and GLJ as of January 1, 2022.
The 700 Duvernay drilling areas referenced embrace: 7 proved undeveloped areas and 78 possible undeveloped areas for a complete of 85 booked areas with the stability being unbooked areas. The 150 Montney drilling areas referenced embrace: 39 proved undeveloped areas and 59 possible undeveloped areas for a complete of 98 booked areas with the stability being unbooked areas. Proved undeveloped areas and possible undeveloped areas are booked and derived from the Firm’s most up-to-date unbiased reserves analysis as ready by McDaniel as of December 31, 2021 and account for drilling areas which have related proved and/or possible reserves, as relevant. Unbooked areas are inside administration estimates. Unbooked areas don’t have attributed reserves or assets (together with contingent or potential). Unbooked areas have been recognized by administration as an estimation of Athabasca’s multi-year drilling actions anticipated to happen over the subsequent 20 years primarily based on analysis of relevant geologic, seismic, engineering, manufacturing and reserves data. There isn’t any certainty that the Firm will drill all unbooked drilling areas and if drilled there is no such thing as a certainty that such areas will end in further oil and fuel reserves, assets or manufacturing. The drilling areas on which the Firm will really drill wells, together with the quantity and timing thereof is in the end dependent upon the supply of funding, commodity costs, provincial fiscal and royalty insurance policies, prices, precise drilling outcomes, further reservoir data that’s obtained and different components.
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Non-GAAP and Different Monetary Measures, and Manufacturing Disclosure
The “Adjusted Funds Movement”, “Adjusted Funds Movement per Share”, “Free Money Movement”, “Mild Oil Working Earnings”, “Mild Oil Working Netback”, “Thermal Oil Working Earnings”, “Thermal Oil Working Netback”, “Consolidated Working Earnings”, “Consolidated Working Netback”, “Consolidated Working Earnings Web of Realized Hedging”, “Consolidated Working Netback Web of Realized Hedging”, “Money Transportation & Advertising Bills”, “Adjusted EBITDA” and “Web Debt” monetary measures contained on this Information Launch don’t have standardized meanings that are prescribed by IFRS and they’re thought of to be non-GAAP monetary measures or ratios. These measures might not be similar to related measures introduced by different issuers and shouldn’t be thought of in isolation with measures which can be ready in accordance with IFRS. The Leismer and Hangingstone working outcomes are a supplementary monetary measure that when aggregated, mix to the Thermal Oil phase outcomes and the Higher Placid and Higher Kaybob working outcomes are a supplementary monetary measure that when aggregated, mix to the Mild Oil phase outcomes.
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Adjusted Funds Movement, Adjusted Funds Movement Per Share and Free Money Movement
Adjusted Funds Movement and Free Money Movement are non-GAAP monetary measures and should not supposed to signify money stream from working actions, internet earnings or different measures of monetary efficiency calculated in accordance with IFRS. The Adjusted Funds Movement and Free Money Movement measures permit administration and others to guage the Firm’s capability to fund its capital applications and meet its ongoing monetary obligations utilizing money stream internally generated from ongoing working associated actions. Adjusted Funds Movement per share is a non-GAAP monetary ratio calculated as Adjusted Funds Movement divided by the relevant variety of weighted common shares excellent. Adjusted Funds Movement and Free Money Movement are calculated as follows:
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Three months ended March 31, |
||||||
($ Hundreds) | 2022 | 2021 | ||||
Money stream from working actions | $ | 59,862 | $ | 1,138 | ||
Modifications in non-cash working capital | 14,353 | 16,520 | ||||
Settlement of provisions | 546 | 1,303 | ||||
ADJUSTED FUNDS FLOW | 74,761 | 18,961 | ||||
Capital expenditures | (30,929 | ) | (35,554 | ) | ||
FREE CASH FLOW | $ | 43,832 | $ | (16,593 | ) |
Mild Oil Working Earnings and Working Netback
The non-GAAP measure Mild Oil Working Earnings on this Information Launch is calculated by subtracting the Mild Oil Segments royalties, working bills and transportation & advertising and marketing bills from petroleum and pure fuel gross sales which is essentially the most straight comparable GAAP measure. The Mild Oil Working Netback per boe is a non-GAAP monetary ratio calculated by dividing the Mild Oil Working Earnings by the Mild Oil manufacturing. The Mild Oil Working Earnings and the Mild Oil Working Netback measures permit administration and others to guage the manufacturing outcomes from the Firm’s Mild Oil belongings. The Mild Oil Working Earnings is calculated utilizing the Mild Oil Segments GAAP outcomes, as follows:
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Three months ended March 31, |
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($ Hundreds) | 2022 | 2021 | ||||
Petroleum and pure fuel gross sales | $ | 45,108 | $ | 34,572 | ||
Royalties | (5,869 | ) | (1,853 | ) | ||
Working bills | (6,979 | ) | (6,712 | ) | ||
Transportation and advertising and marketing | (2,457 | ) | (2,247 | ) | ||
LIGHT OIL OPERATING INCOME | $ | 29,803 | $ | 23,760 |
Thermal Oil Working Earnings and Working Netback
The non-GAAP measure Thermal Oil Working Earnings on this Information Launch is calculated by subtracting the Thermal Oil segments price of diluent mixing, royalties, working bills and money transportation & advertising and marketing bills from heavy oil (blended bitumen) and midstream gross sales which is essentially the most straight comparable GAAP measure. The Thermal Oil Working Netback per boe is a non-GAAP monetary ratio calculated by dividing the respective tasks Working Earnings by its respective bitumen gross sales volumes. The Thermal Oil Working Earnings and the Thermal Oil Working Netback measures permit administration and others to guage the manufacturing outcomes from the Firm’s Thermal Oil belongings.
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The Thermal Oil Working Earnings is calculated utilizing the Thermal Oil Segments GAAP outcomes, as follows:
Three months ended March 31, |
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($ Hundreds) | 2022 | 2021 | ||||
Heavy oil (blended bitumen) and midstream gross sales | $ | 360,281 | $ | 186,710 | ||
Value of diluent | (139,911 | ) | (83,194 | ) | ||
Complete bitumen and midstream gross sales | 220,370 | 103,516 | ||||
Royalties | (32,496 | ) | (2,172 | ) | ||
Working bills | (45,496 | ) | (37,804 | ) | ||
Money transportation and advertising and marketing(1) | (21,541 | ) | (21,372 | ) | ||
THERMAL OIL OPERATING INCOME (LOSS) | $ | 120,837 | $ | 42,168 |
(1) Money transportation and advertising and marketing excludes non-cash prices of $0.6 million for the three months ended March 31, 2022.
Consolidated Working Earnings and Consolidated Working Earnings Web of Realized Hedging and Working Netbacks
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The non-GAAP measure Consolidated Working Earnings on this Information Launch is calculated by including or subtracting realized beneficial properties (losses) on commodity threat administration contracts, royalties, the price of diluent mixing, working bills and money transportation & advertising and marketing bills from petroleum, pure fuel and midstream gross sales which is essentially the most straight comparable GAAP measure. The Consolidated Working Netback per boe is a non-GAAP ratio calculated by dividing Consolidated Working Earnings by the overall gross sales volumes and is introduced on a per boe foundation. The Consolidated Working Earnings and the Consolidated Working Netback measures permit administration and others to guage the manufacturing outcomes from the Firm’s Mild Oil and Thermal Oil belongings mixed collectively together with the influence of realized commodity threat administration beneficial properties or losses.
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Three months ended March 31, |
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($ Hundreds) | 2022 | 2021 | ||||
Petroleum, pure fuel and midstream gross sales(1) | $ | 405,389 | $ | 221,282 | ||
Royalties | (38,365 | ) | (4,025 | ) | ||
Value of diluent(1) | (139,911 | ) | (83,194 | ) | ||
Working bills | (52,475 | ) | (44,516 | ) | ||
Money transportation and advertising and marketing(2) | (23,998 | ) | (23,619 | ) | ||
Working Earnings | 150,640 | 65,928 | ||||
Realized achieve (loss) on commodity threat administration contracts | (47,646 | ) | (21,113 | ) | ||
OPERATING INCOME NET OF REALIZED HEDGING | $ | 102,994 | $ | 44,815 |
(1) Non-GAAP measure consists of intercompany NGLs (i.e. condensate) offered by the Mild Oil phase to the Thermal Oil phase to be used as diluent that’s eradicated on consolidation.
(2) Money transportation and advertising and marketing excludes non-cash prices of $0.6 million for the three months ended March 31, 2022.
Money Transportation & Advertising Bills
The Money Transportation & Advertising Expense monetary measure contained on this Information Launch is calculated by subtracting the non-cash Transportation & Advertising Expense as reported within the Consolidated Assertion of Money Flows from the Transportation & Advertising Expense as reported within the Consolidated Assertion of Earnings (Loss) and is taken into account to be a non-GAAP monetary measure.
Web Debt
Web Debt is outlined because the face worth of time period debt, plus accounts payable and accrued liabilities, plus present portion of provisions and different liabilities much less present belongings, and excluding threat administration contracts. Present Web Debt is Web Debt as at March 31, 2022 adjusted for $29 million of warrant proceeds acquired in April.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure outlined as Web revenue (loss) and complete revenue (loss) earlier than financing and curiosity expense, depletion and depreciation, impairment (reversal) and taxation (restoration) expense adjusted for unrealized overseas trade achieve (loss), realized overseas trade achieve (loss) on compensation of US greenback debt, unrealized achieve (loss) on threat administration contracts, achieve (loss) on revaluation of provisions and different, achieve (loss) on sale of belongings, non-cash transportation and advertising and marketing and non‐money inventory‐primarily based compensation.
Manufacturing volumes particulars
Three months ended March 31, |
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Manufacturing | 2022 | 2021 | |||||
Higher Placid: | |||||||
Condensate NGLs | bbl/d | 1,100 | 1,540 | ||||
Different NGLs | bbl/d | 436 | 460 | ||||
Pure fuel(1) | mcf/d | 12,168 | 15,599 | ||||
Complete Higher Placid | boe/d | 3,565 | 4,600 | ||||
Higher Kaybob: | |||||||
Oil(2) | bbl/d | 1,971 | 2,511 | ||||
Different NGLs | bbl/d | 324 | 327 | ||||
Pure fuel(1) | mcf/d | 5,463 | 6,083 | ||||
Complete Higher Kaybob | boe/d | 3,205 | 3,852 | ||||
Mild Oil: | |||||||
Oil(2) | bbl/d | 1,971 | 2,511 | ||||
Condensate NGLs | bbl/d | 1,100 | 1,540 | ||||
Oil and condensate NGLs | bbl/d | 3,071 | 4,051 | ||||
Different NGLs | bbl/d | 760 | 787 | ||||
Pure fuel(1) | mcf/d | 17,631 | 21,682 | ||||
Complete Mild Oil division | boe/d | 6,770 | 8,452 | ||||
Complete Thermal Oil division bitumen | bbl/d | 27,909 | 25,949 | ||||
Complete Firm manufacturing | boe/d | 34,679 | 34,401 |
(1) Comprised of 99% or better of shale fuel, with the remaining being standard pure fuel.
(2) Comprised of 99% or better of tight oil, with the remaining being mild and medium crude oil.
This Information Launch additionally makes reference to Athabasca’s forecasted whole common each day manufacturing of 33,000 – 34,000 boe/d for 2022. Athabasca expects that roughly 82% of that manufacturing shall be comprised of bitumen, 8% shale fuel, 5% tight oil, 3% condensate pure fuel liquids and a pair of% different pure fuel liquids.
This Information Launch makes reference to Athabasca’s three nicely ends in Two Creeks which have seen common productiveness of ~839 boe /d IP30s (95% Liquids), which is comprised of ~94% tight oil, ~5% shale fuel and ~1% NGLs. Moreover, the 12 prior Two Creeks and Kaybob East wells have seen common productiveness of ~725 boe /d IP180s (85% Liquids), which is comprised of ~80% tight oil, ~15% shale fuel and ~5% NGLs and 547 boe/d, and IP360’s (83% Liquids), which is comprised of ~78% tight oil, ~17% shale fuel and ~5% NGLs.
Liquids is outlined as bitumen, mild crude oil, medium crude oil and pure fuel liquids.
Recycle ratio is calculated by dividing estimated undertaking working netbacks by discovering and growth prices per boe. Revenue-to-Funding Ratio is a measure of a tasks internet worth relative to its capital funding and is calculated by dividing a undertaking’s NPV10 worth by its Capital. Reserve life is calculated by dividing year-end reserves with administration’s forecasted manufacturing steerage.
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