Athabasca Oil Corporation press release

Athabasca Oil Reports 2026 Second Quarter Results Highlighted by Leismer Expansion Milestones and Advancement of Corner Phase 1

2026-07-30

TSX - Toronto Stock Exchange · Oil · Bitumen · Natural Gas · Natural Gas Liquids · Canada · Corporate Finance

CALGARY, Alberta, July 29, 2026 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) reported second quarter results highlighted by continued execution of its funded growth strategy. The Company advanced the Leismer expansion and commenced the staged start-up of the next growth well pairs. Corner development activities are progressing as planned, with project sanction expected following confirmation of details under the Government of Alberta’s new fiscal framework to enable oil sands growth. The Company remains focused on executing fully funded growth while maintaining balance-sheet strength and prioritizing per-share value creation.

Q2 2026 Corporate Consolidated Results

Production: Current corporate production of ~40,000 boe/d (July). Average quarterly production of 32,110 boe/d (97% Liquids), reflecting ~7,200 boe/d impact of planned turnarounds. Cash Flow:Adjusted Funds Flow of $123 million ($0.25 per share). Cash flow from operating activities of $134 million. Free Cash Flow of $27 million from Athabasca (Thermal Oil). Cash flow for the quarter was impacted by turnarounds and lower sales volumes in June related to third-party downtime. Approximately 7,800 bbl/d of June production was sold from inventory in July, with the associated financial contribution to be recognized in July. Strong Netbacks:Quarterly Operating Netback of $49/bbl in Thermal Oil and $70/boe in Duvernay Energy. Capital Program: Total capital expenditures of $84 million, including $70 million at Leismer to support the expansion project and facility turnaround and $7 million in Duvernay development. Best-in-Class Balance Sheet: $62 million Net Cash position and $826 million of Liquidity. Athabasca closed a new $500 million four-year covenant-based credit facility, while Duvernay Energy increased its reserve-based facility to $75 million, expanding financial flexibility and lowering the Company’s cost of capital.

Leismer Expansion

Timeline on Track: The planned facility turnaround was completed in May and included new tie-in points and setting of major equipment for the expansion. The Company has commenced steaming new wells and expects to bring 12 well pairs on production in a staged approach by early 2027. An additional nine well pairs and three redevelopment wells will be drilled during the upcoming winter season. The asset is expected to exit 2026 at ~31,000 bbl/d and achieve 40,000 bbl/d by the end of 2027. Accelerating Activity:The total cost of the expansion project is estimated at $300 million ($25,000/bbl/d capital efficiency). The 2026 capital budget for Leismer has increased by ~$30 million to ~$270 million to reflect the acceleration of drilling activity into this year. Drilling will commence in the fourth quarter with completions to follow in 2027. This accelerated activity is within the original expansion scope of work. Capital spending for the entire project is expected to be substantially complete by year-end 2026.

Corner Asset: Advancing a Top-Tier Growth Project

Corner Project: The asset is an exceptional project with a high-quality reservoir in the McMurray sands containing an estimated 353 mmbbl 2P reserves and 520 mmbbl contingent resource (best estimate). The project area is highly delineated with over 300 vertical well penetrations, 3D seismic coverage and regulatory approval in place for a 40,000 bbl/d development. Corner is adjacent to the Company’s Leismer asset with many operational synergies between the assets. Once developed, the asset is expected to rank among the best steam assisted gravity drainage (“SAGD”) assets in Alberta. Operational Momentum: Athabasca has finalized a lump-sum proposal for a 15,000 bbl/d Phase 1 modular development, providing greater cost and schedule certainty. Site preparation, access road construction and detailed engineering work are proceeding. The 2026 capital budget has increased to ~$55 million which maintains the development schedule of first steam in early 2029 and ramp-up to full production capacity by year-end 2029. Development Capital:Phase 1 capital is estimated at ~$560 million for the central processing facility, associated well pairs and site infrastructure ($36,500/bbl/d capital efficiency based on 15,300 bbl/d of capacity). The majority of Phase 1 expenditures are expected in 2027 and 2028, following the completion of the Leismer expansion capital spend. The Company also expects to advance regional infrastructure and long-lead items to preserve the option to accelerate future phases toward the targeted 40,000 bbl/d project capacity. Sanction Timing: The Government of Alberta recently announced plans for a new fiscal framework to enable oil sands growth with program details expected later this year. Athabasca continues to advance Phase 1 through schedule-critical commitments and expects to sanction the project following confirmation of details under the new fiscal framework.

Corporate Consolidated 2026 Outlook and Exit-Rate Momentum

Hangingstone Resilience: Production remains resilient at ~9,000 bbl/d. The Company is assessing capital-efficient growth opportunities in 2027 to take advantage of available facility capacity. Duvernay Development: Recent Duvernay wells continue to demonstrate strong production results and free condensate yields. A four-well pad at 7-15-64-17 W5 (30% WI) was brought on stream in April with average IP30s of 1,501 boe/d per well (90% Liquids) and average IP60s of 1,266 boe/d per well (90% Liquids). The Company recently commenced drilling a three-well 100% working interest pad. Production from the pad is expected in the fourth quarter, contributing to an exit rate of ~6,000 boe/d. Consolidated Outlook and Exit-Rate Momentum: Production growth will materialize in the second half of 2026 with an exit rate of ~45,000 boe/d, supported by the Leismer expansion project and Duvernay activity. Annual production is expected to be at the high end of guidance of 37,000 – 39,000 boe/d (98% Liquids), inclusive of a ~1,800 boe/d impact of planned turnarounds across its assets. Strong operational momentum is expected to continue into 2027 as Leismer ramps up to 40,000 bbl/d and growth in Duvernay continues. The corporate consolidated capital budget has increased to ~$420 million, including ~$65 million of accelerated Thermal Oil activity, bringing the Thermal Oil budget to ~$340 million. The Duvernay Energy budget remains at ~$80 million.

Long-Term Corporate Strategy

Thermal Oil Growth:The Company’s Thermal Oil division provides an oil-focused platform underpinning funded growth to >60,000 bbl/d by 2030. The Thermal Oil assets have a resource base of 1.2 billion barrels of proved plus probable reserves and 1 billion barrels of contingent resource, providing optionality to reach over 90,000 bbl/d within current regulatory approvals. Growth Funded within Cash Flow: Long-life, low-decline assets provide Athabasca with a sustaining capital and growth advantage. The Company’s Thermal Oil assets have an operating break-even of ~US$40/bbl WTI, a sustaining break-even of ~US$45/bbl WTI and growth initiatives at Leismer and Corner are fully funded within cash flow at ~US$55/bbl WTI. Exceptional Financial Resilience: Athabasca is committed to maintaining a best-in-class balance sheet and the Company will prudently manage its capital structure as operations increase in scale. Athabasca holds a $62 million Net Cash position and $826 million of Liquidity. The Company’s new $500 million four-year covenant-based credit facility expands financial flexibility at a lower cost of capital. Athabasca (Thermal Oil) also has $2.1 billion in tax pools, including $1.5 billion of immediately deductible non-capital losses, sheltering cash taxes to 20301. Outstanding Shareholder Returns: The Company has returned ~$1.2 billion to shareholders since 2021, including $386 million of debt reduction and ~$775 million of share buybacks. Athabasca’s capital allocation framework remains anchored by a strong balance sheet, fully funded high-return growth and value-driven return of capital. In 2026, Athabasca is committed to returning 100% of Free Cash Flow to shareholders through share buybacks and has repurchased ~$70 million of common shares year-to-date. Athabasca forecasts $1.5 billion1,2of additional Free Cash Flow over the next five years after funding its growth initiatives at Leismer and Corner. Focus on Per Share Metrics: Advancing attractive capital projects concurrent with share buybacks results in a >20% compound annual growth rate in cash flow per share1to 2030 and beyond. Duvernay Value Proposition:Athabasca’s subsidiary company, Duvernay Energy Corporation (“DEC”), is designed to enhance value for shareholders by providing a clear path for self-funded production and cash flow growth in the Kaybob Duvernay resource play. DEC has an independent strategy and capital allocation framework with production growth to >15,000 boe/d by 2030 with ~20 years of future drilling inventory. Value crystallization for shareholders is expected once the asset has reached a material scale through its exceptional land base and drilling inventory.

Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Net Cash) and production disclosure. 1 Pricing Assumptions: 2026 strip pricing (July 23) US$83.39 WTI, US$14.37 WCS heavy differential, C$1.91 AECO, 0.72 C$/US$ FX. 2027+ US$70 WTI, US$12.50 WCS heavy differential, C$3 AECO, and 0.725 C$/US$ FX. 2The Company’s illustrative multi-year outlook assumes 100% of Free Cash Flow is directed to share buybacks up to a 10% Normal Course Issuer Bid limit at an implied share price of 8x Enterprise Value/Debt Adjusted Cash Flow in 2027 and beyond.

Financial and Operational Highlights

| | Three months ended June 30, | | Six months ended June 30, | | | | | | | | | | | | | | ($ Thousands, unless otherwise noted) | 2026 | | | 2025 | | | 2026 | | | 2025 | | | | | | | CORPORATE CONSOLIDATED(1) | | | | | | | | | | | | | | | | | Petroleum and natural gas production (boe/d)(2) | | 32,110 | | | | 39,088 | | | | 36,153 | | | | 38,404 | | | Petroleum, natural gas and midstream sales | $ | 342,612 | | | $ | 360,070 | | | $ | 738,889 | | | $ | 727,914 | | | Operating Income(2) | $ | 140,396 | | | $ | 141,707 | | | $ | 312,612 | | | $ | 287,297 | | | Operating Income Net of Realized Hedging(2)(3) | $ | 126,853 | | | $ | 142,101 | | | $ | 299,869 | | | $ | 286,048 | | | Operating Netback ($/boe)(2) | $ | 52.27 | | | $ | 38.81 | | | $ | 48.59 | | | $ | 41.30 | | | Operating Netback Net of Realized Hedging ($/boe)(2)(3) | $ | 47.23 | | | $ | 38.92 | | | $ | 46.61 | | | $ | 41.12 | | | Capital expenditures | $ | 84,106 | | | $ | 73,066 | | | $ | 198,068 | | | $ | 136,399 | | | Cash flow from operating activities | $ | 133,944 | | | $ | 101,432 | | | $ | 235,971 | | | $ | 224,785 | | | per share - basic | $ | 0.28 | | | $ | 0.20 | | | $ | 0.49 | | | $ | 0.44 | | | Adjusted Funds Flow(2) | $ | 123,025 | | | $ | 127,591 | | | $ | 251,050 | | | $ | 257,266 | | | per share - basic | $ | 0.25 | | | $ | 0.25 | | | $ | 0.52 | | | $ | 0.51 | | | ATHABASCA (THERMAL OIL) | | | | | | | | | | | | | | | | | Bitumen production (bbl/d)(2) | | 27,173 | | | | 36,476 | | | | 31,377 | | | | 35,613 | | | Petroleum, natural gas and midstream sales | $ | 329,743 | | | $ | 355,160 | | | $ | 723,606 | | | $ | 717,535 | | | Operating Income(2) | $ | 108,974 | | | $ | 135,803 | | | $ | 261,633 | | | $ | 271,119 | | | Operating Netback ($/bbl)(2) | $ | 48.73 | | | $ | 39.79 | | | $ | 46.99 | | | $ | 42.02 | | | Capital expenditures | $ | 77,360 | | | $ | 56,110 | | | $ | 169,485 | | | $ | 106,486 | | | Adjusted Funds Flow(2) | $ | 103,871 | | | $ | 122,097 | | | $ | 216,111 | | | $ | 243,450 | | | Free Cash Flow(2) | $ | 26,511 | | | $ | 65,987 | | | $ | 46,626 | | | $ | 136,964 | | | DUVERNAY ENERGY(1) | | | | | | | | | | | | | | | | | Petroleum and natural gas production (boe/d)(2) | | 4,937 | | | | 2,612 | | | | 4,776 | | | | 2,791 | | | Percentage Liquids (%)(2) | 82 | % | | 72 | % | | 82 | % | | 73 | % | | | | | | Petroleum, natural gas and midstream sales | $ | 42,649 | | | $ | 13,526 | | | $ | 71,184 | | | $ | 31,145 | | | Operating Income(2) | $ | 31,422 | | | $ | 5,904 | | | $ | 50,979 | | | $ | 16,178 | | | Operating Netback ($/boe)(2) | $ | 69.94 | | | $ | 24.84 | | | $ | 58.98 | | | $ | 32.03 | | | Capital expenditures | $ | 6,746 | | | $ | 16,956 | | | $ | 28,583 | | | $ | 29,913 | | | Adjusted Funds Flow(2) | $ | 19,154 | | | $ | 5,494 | | | $ | 34,939 | | | $ | 13,816 | | | Free Cash Flow(2) | $ | 12,408 | | | $ | (11,462 | ) | | $ | 6,356 | | | $ | (16,097 | ) | | NET INCOME AND COMPREHENSIVE INCOME | | | | | | | | | | | | | | | | | Net income and comprehensive income(4) | $ | 66,172 | | | $ | 56,870 | | | $ | 112,457 | | | $ | 128,874 | | | per share - basic(4) | $ | 0.14 | | | $ | 0.11 | | | $ | 0.23 | | | $ | 0.25 | | | per share - diluted(4) | $ | 0.13 | | | $ | 0.11 | | | $ | 0.23 | | | $ | 0.25 | | | COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | | Weighted average shares outstanding - basic | | 484,209,009 | | | | 502,593,860 | | | | 482,764,848 | | | | 508,393,229 | | | Weighted average shares outstanding - diluted | | 489,907,985 | | | | 510,591,132 | | | | 486,771,496 | | | | 512,076,328 | | | | | | | | | | | | | | | | | | |

| | June 30, | | | December 31, | | | | | As at ($ Thousands) | 2026 | | | 2025 | | | | | LIQUIDITY AND BALANCE SHEET (CONSOLIDATED) | | | | | | | | | Cash and cash equivalents | $ | 291,726 | | | $ | 316,366 | | | Available credit facilities(5) | $ | 534,184 | | | $ | 126,595 | | | Face value of long-term debt | $ | 208,544 | | | $ | 201,209 | |

| (1) | Corporate Consolidated and Duvernay Energy reflect gross production and financial metrics before taking into consideration Athabasca's 70% equity interest in Duvernay Energy. | | (2) | Refer to the “Reader Advisory” section within this News Release for additional information on Non-GAAP Financial Measures and production disclosure. | | (3) | Includes realized commodity risk management loss of $13.5 million and $12.7 million for the three and six months ended June 30, 2026 (three and six months ended June 30, 2025 – gain of $0.4 million and loss of $1.2 million). | | (4) | Net income and comprehensive income per share amounts are based on net income and comprehensive income attributable to shareholders of the Parent Company. In the calculation of diluted net income per share for the three months ended June 30, 2026 net income was decreased by $0.8 million, to account for the impact to net income had the outstanding warrants and PSUs been converted to equity. In the calculation of diluted net income per share for the three months ended June 30, 2025 net income was increased by $0.4 million, to account for the impact to net income had the outstanding warrants been converted to equity. | | (5) | Includes available credit under Athabasca's and Duvernay Energy's Credit Facilities and Athabasca's Unsecured Letter of Credit Facility. | | | |

Athabasca (Thermal Oil) Q2 2026 Highlights and Operations Update

Production: Second quarter production of 27,173 bbl/d (18,274 bbl/d at Leismer and 8,899 bbl/d at Hangingstone), reflecting planned turnaround activity at both assets. Cash Flow:Operating Income of $109.0 million with an Operating Netback of $48.73/bbl. Adjusted Funds Flow of $103.9 million. Cash flow for the quarter was impacted by turnarounds and lower sales volumes in June related to third-party downtime. Approximately 7,800 bbl/d of June production was sold from inventory in July, with the associated financial contribution to be recognized in July. Capital: $77.4 million of capital expenditures in Q2, with $70.2 million at Leismer.

Leismer

During the quarter, the Company completed a three-week facility turnaround on budget and on schedule. The turnaround included recurring maintenance on a four-year frequency and scope for the tie-in of new equipment for the expansion project. The Company also completed six well pairs on Pad L10 and recently commenced steaming operations on the next growth well pairs. A total of 12 well pairs will be placed on production over the next six months supporting a 2026 exit rate of ~31,000 bbl/d. The wells feature extended-reach laterals of approximately 1,300–1,600 meters and modern completion technologies, including flow-control devices and steam splitters designed to improve temperature conformance along the laterals.

The Company will commence drilling nine additional well pairs this upcoming winter including five well pairs on Pad 10 and four well pairs on Pad 11. Three redevelopment wells will also be drilled. These wells are part of the original expansion project scope and will drive progressive growth to ~40,000 bbl/d by late 2027.

At the central processing facility, construction continues to advance with completion and start-up of the first stage of debottlenecking equipment, completion of all required mechanical and electrical tie-ins during turnaround, continued equipment delivery and progression of tank construction in the field. Work on the steam-generation and associated blowdown systems has advanced significantly with targeted completion in October. Steam capacity is expected to increase to 110,000 bbl/d in the fourth quarter of 2026, with a further increase to 130,000 bbl/d expected in the first quarter of 2027.

The $300 million expansion project includes an estimated $190 million for facility capital and an estimated $110 million for growth wells, with a capital efficiency of ~$25,000/bbl/d. Capital exposure for the expansion project is expected to be substantially complete by year-end 2026. The project remains on budget and on schedule with the original sanction plans announced in July 2024.

Hangingstone

In March 2025, two extended-reach sustaining well pairs (~1,400 meter average laterals) were placed on production supporting current production of ~9,000 bbl/d. Current well pair performance remains strong between 850 – 1,150 bbl/d per well. Hangingstone continues to deliver meaningful cash flow contributions. The Company is assessing capital-efficient growth opportunities in 2027 to take advantage of available facility capacity and regulatory approval for 12,000 bbl/d. The Company completed a planned turnaround in June.

Corner

Corner is expected to be the first greenfield project in the high-quality McMurray fairway to be sanctioned since 2013. The asset is a top-tier SAGD project, underpinned by a high-quality reservoir characterized by pay packages averaging ~20 meters thick and oil saturations of ~84%. The Company expects initial steam-to-oil ratios of ~2.5x. Given the high-quality reservoir, the initial project phase will be developed from a single pad, utilizing extended-reach laterals and modern completion technologies. The asset will leverage substantial strategic infrastructure shared with Leismer, including the regional aerodrome, roads, camp facilities and experienced personnel.

Phase 1 capital is estimated at ~$560 million, including site preparations, facilities, drilling and completions and regional infrastructure. This represents a capital efficiency of ~$36,500/bbl/d (15,300 bbl/d capacity). The Corner asset will be developed through a capital-efficient modular design with 15,000 bbl/d project phases. The project approach includes a proven templated and modular central processing plant, connected to well pads with above ground pipelines, enabling a low-risk development approach while reducing site construction costs. The initial phase of development will require only a partial pad of wells to achieve full capacity.

The Company has finalized a lump-sum proposal for a 15,000 bbl/d Phase 1 central processing facility, providing greater cost and schedule certainty. Site preparation, access road construction and detailed engineering work are proceeding.