Athabasca Oil Corporation press release

Athabasca Oil Reports Strong 2026 First Quarter Results and Increased Cash Flow Outlook

2026-05-06

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

CALGARY, Alberta, May 06, 2026 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) first quarter results demonstrate continued execution across its funded growth portfolio, with its Leismer expansion on track, strong Duvernay performance, and a balance sheet positioned to support disciplined capital allocation. In the current constructive oil price environment, the Company is well positioned to capture higher cash flow through its liquids-weighted asset base while continuing to prioritize per-share value creation.

Q1 2026 Consolidated Corporate Results

Production: Average production of 40,242 boe/d (98% Liquids), representing 7% (14% per share) growth year-over-year. Cash Flow:Adjusted Funds Flow of $128 million ($0.27 per share). Cash flow from operating activities of $102 million. Free Cash Flow of $20 million from Athabasca (Thermal Oil) demonstrates the strength of its quality asset base. Strong Netbacks:Quarterly Operating Netback of $46/bbl per barrel in Thermal Oil and $47/boe in Duvernay Energy. Significant margin growth was realized in March, supported by higher oil prices, with Operating Netbacks increasing to greater than $65/boe in all operating areas. Capital Program: Total capital expenditures of $114 million, including $81 million at Leismer to support the expansion project and $22 million in Duvernay development. Best-in Class Balance Sheet: $60 million Net Cash position and $406 million of Liquidity (including $291 million of cash). Athabasca continues to prudently manage its capital structure as operations increase in scale and the Company is committed to maintaining a best-in-class balance sheet.

2026 Outlook Increased on Stronger Cash Flow and Exit-Rate Momentum

Leismer Expansion On Track: The winter drilling program concluded in March with 12 new well pairs with 1,300 – 1,600 meter lateral lengths. These wells pairs will begin steaming in the second half of the year on a phased basis following the facility turnaround in May, driving strong production growth in the back half of 2027. The $300 million expansion project is expected to reach 40,000 bbl/d in late 2027 with a capital efficiency of $25,000/bbl/d. Capital for this project will be ~90% complete by the end of 2026. Hangingstone Resilience: Current production remains resilient at ~8,900 bbl/d. The Company is assessing capital efficient growth opportunities in 2027 to take advantage of available facility capacity. Accelerating Duvernay Momentum: 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 completed in March and brought on stream in April with average IP21s of 1,635 boe/d per well (91% Liquids). The Company is accelerating the timing of a three-well 100% working interest pad into Q3 2026. Production from the pad is expected to commence in the fourth quarter, contributing to an expected exit rate of ~6,000 boe/d. The capital budget for Duvernay Energy has increased to $79 million, including the three-well pad and operational readiness for a continued growth program in 2027. Continued strong results and a robust commodity price environment are enabling the strategy of self-funded growth. Exit Rate Momentum: Production growth will materialize in the second half of 2026 with an increased exit rate of ~45,000 boe/d, supported by the Leismer expansion project and additional 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 ~2,500 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. Increased Cash Flow Outlook: The Company has increased its consolidated 2026 Adjusted Funds Flow forecast to $550 – $575 million1reflecting higher oil prices. With operational momentum into 2027, Adjusted Funds Flow and Free Cash Flow are expected to grow significantly year over year. Every +US$1/bbl move in West Texas Intermediate (“WTI”) and Western Canadian Select (“WCS”) heavy oil impacts 2027 Adjusted Funds Flow by ~$19 million and ~$24 million, respectively.

Corner Readiness

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. Facility Development: Corner will be developed through a capital-efficient modular design with 15,000 bbl/d project phases. The Company has completed Class 3 cost estimates and is now evaluating lump sum bid proposals to enhance certainty over project cost and schedule. Operational Advancement: Recent field activity included road and pad-site clearing during the winter construction season. The Company has secured long-term gas supply and power contracts and is evaluating multiple options for diluent supply and dilbit egress. Sanction Ready:The Company anticipates the first 15,000 bbl/d phase to be sanctioned in the second half of 2026. Once sanctioned, the project is expected to reach first steam in 30 months, first oil in 34 months and a 15,000 bbl/d production rate by the end of 2029, with additional phases in subsequent years. Self-Funded:The initial phase of the project is expected to cost ~$35,000/bbl/d with the majority of the capital allocated in 2027/28, following the current Leismer expansion project. The Corner project is expected to be self-funded while maintaining a strong balance sheet and a continued focus on shareholder returns.

Corporate Consolidated 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 including Phase 1 of Corner. 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. Low Break-evens:Long-life, low decline assets afford Athabasca with a sustaining capital and growth advantage. The Company’s Thermal Oil assets have an operating break-even of ~US$40/bbl WTI, a sustaining break-even of ~$US45/bbl WTI and growth initiatives at Leismer and Corner are fully funded within cash flow at ~US$55/bbl WTI. 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. Financial Resilience with Net Cash position: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 (Thermal Oil) also has $2.1 billion in tax pools, including $1.5 billion of immediately deductible non-capital losses, sheltering cash taxes to 2030. Exceptional Shareholder Returns: The Company has returned ~$1.1 billion to shareholders since 2021, including $386 million of debt reduction and ~$750 million of share buybacks. Athabasca’s capital allocation framework remains anchored by a strong balance sheet, fully funded high-return growth and value-driven share buybacks, with incremental activity evaluated against share buybacks on a risk-adjusted per-share return basis. In 2026, Athabasca is committed to returning 100% of Free Cash Flow to shareholders through share buybacks and has purchased $40 million in stock year-to-date. Athabasca forecasts $1.5 billion1,2of additional Free Cash Flow over the next five years while 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% compounded annual growth rate in cash flow per share1to 2030 and beyond.

Annual Shareholders Meeting

Athabasca will be hosting its Annual General Meeting of Shareholders (“Meeting”) on Thursday, May 7, 2026 at 9:00 am (MT). The Meeting will be hosted virtually and shareholders and guests can listen via live webcast with details available at:

https://www.atha.com/investors/presentation-events.html

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 2026 strip pricing (April 27): US$80.96 WTI, US$14.48 WCS diff, C$1.65 AECO, 0.73C$/US$ FX.Pricing Assumptions: 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 March 31, | | | | | | | | ($ Thousands, unless otherwise noted) | | 2026 | | | 2025 | | | | | CORPORATE CONSOLIDATED(1) | | | | | | | | | | Petroleum and natural gas production (boe/d)(2) | | | 40,242 | | | | 37,714 | | | Petroleum, natural gas and midstream sales | | $ | 396,277 | | | $ | 367,844 | | | Operating Income(2) | | $ | 172,216 | | | $ | 145,590 | | | Operating Income Net of Realized Hedging(2)(3) | | $ | 173,016 | | | $ | 143,947 | | | Operating Netback ($/boe)(2) | | $ | 45.95 | | | $ | 44.07 | | | Operating Netback Net of Realized Hedging ($/boe)(2)(3) | | $ | 46.16 | | | $ | 43.57 | | | Capital expenditures | | $ | 113,962 | | | $ | 63,333 | | | Cash flow from operating activities | | $ | 102,027 | | | $ | 123,353 | | | per share - basic | | $ | 0.21 | | | $ | 0.24 | | | Adjusted Funds Flow(2) | | $ | 128,025 | | | $ | 129,675 | | | per share - basic | | $ | 0.27 | | | $ | 0.25 | | | ATHABASCA (THERMAL OIL) | | | | | | | | | | Bitumen production (bbl/d)(2) | | | 35,629 | | | | 34,742 | | | Petroleum, natural gas and midstream sales | | $ | 393,863 | | | $ | 362,375 | | | Operating Income(2) | | $ | 152,659 | | | $ | 135,316 | | | Operating Netback ($/bbl)(2) | | $ | 45.80 | | | $ | 44.56 | | | Capital expenditures | | $ | 92,125 | | | $ | 50,376 | | | Adjusted Funds Flow(2) | | $ | 112,240 | | | $ | 121,353 | | | Free Cash Flow(2) | | $ | 20,115 | | | $ | 70,977 | | | DUVERNAY ENERGY(1) | | | | | | | | | | Petroleum and natural gas production (boe/d)(2) | | | 4,613 | | | | 2,972 | | | Percentage Liquids (%)(2) | | 81 | % | | 73 | % | | | | Petroleum, natural gas and midstream sales | | $ | 28,535 | | | $ | 17,619 | | | Operating Income(2) | | $ | 19,557 | | | $ | 10,274 | | | Operating Netback ($/boe)(2) | | $ | 47.10 | | | $ | 38.42 | | | Capital expenditures | | $ | 21,837 | | | $ | 12,957 | | | Adjusted Funds Flow(2) | | $ | 15,785 | | | $ | 8,322 | | | Free Cash Flow(2) | | $ | (6,052 | ) | | $ | (4,635 | ) | | NET INCOME AND COMPREHENSIVE INCOME | | | | | | | | | | Net income and comprehensive income(4) | | $ | 46,285 | | | $ | 72,004 | | | per share - basic(4) | | $ | 0.10 | | | $ | 0.14 | | | per share - diluted(4) | | $ | 0.10 | | | $ | 0.14 | | | COMMON SHARES OUTSTANDING | | | | | | | | | | Weighted average shares outstanding - basic | | | 481,304,641 | | | | 514,257,036 | | | Weighted average shares outstanding - diluted | | | 486,004,993 | | | | 519,227,432 | |

| | | March 31, | | December 31, | | | | | As at ($ Thousands) | | 2026 | | 2025 | | | | | LIQUIDITY AND BALANCE SHEET (CONSOLIDATED) | | | | | | | | | Cash and cash equivalents | | $ | 290,522 | | $ | 316,366 | | | Available credit facilities(5) | | $ | 115,058 | | $ | 126,595 | | | Face value of long-term debt | | $ | 212,746 | | $ | 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 gain of $0.8 million for the three months ended March 31, 2026 (three months ended March 31, 2025 – loss of $1.6 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. (5) Includes available credit under Athabasca's and Duvernay Energy's Credit Facilities and Athabasca's Unsecured Letter of Credit Facility.

Athabasca (Thermal Oil) Q1 2026 Highlights and Operations Update

Production: First quarter production of 35,629 bbl/d (26,683 bbl/d at Leismer and 8,946 bbl/d at Hangingstone). Cash Flow:Operating Income of $152.7 million with an Operating Netback of $46/bbl. Adjusted Funds Flow of $112.2 million. March Operating Netback of $67/bbl. Capital: $92 million of capital expenditures in Q1, with $81 million at Leismer. Free Cash Flow: $20 million of Free Cash Flow supporting corporate return of capital commitment.

Leismer

In Q1 2026, the Company drilled six well pairs on Pad 10. The wells were completed in April, and steaming will commence in a staged sequence following the planned turnaround in May, along with the six well pairs on Pad L11 that were drilled in 2025. An exit rate of ~31,000 bbl/d is anticipated for 2026, with all wells expected to be converted to production by early 2027. These wells in conjunction with additional drilling next winter will drive strong production momentum, supporting progressive growth to 40,000 bbl/d by late 2027. The wells were drilled as extended-reach laterals (1,300 – 1,600 meter laterals) and modern completion technologies that incorporated flow control devices and steam splitters to support temperature conformance along the laterals.

At the central processing facility, construction has advanced significantly, with work now underway on four major storage tanks. Additional key equipment and pipe rack modules have been delivered to site, and mechanical connections are progressing with a focus on increasing the capacity of inlet emulsion processing, heat integration and steam generation systems. Steam capacity is expected to increase to 110,000 bbl/d in H2 2026. The Company has commenced a three-week facility turnaround which will include recurring maintenance on a four-year frequency and scope for the tie-in of new equipment for the expansion project. 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 ~8,900 bbl/d (April). Current well pair performance remains strong between 800 – 1,100 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. The Company has a planned two-week turnaround that will be completed 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 high-quality reservoir characterized by pay packages averaging ~20 meters thick and oil saturations of ~84%. The Company is expecting initial steam-to-oil ratios of ~2.5x. Given the high-quality reservoir, the initial project phase will be developed off 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.

The Corner asset will be developed through a capital-efficient modular design with 15,000 bbl/d project phases. The project approach will include a proven templated and highly modular central processing plant, connected to well pads with above ground pipelines. This approach allows low risk development and reduction of site construction costs. The initial phase of development will require only a single pad of wells to achieve full capacity. Future development is expected to be self-funded while maintaining a strong balance sheet and a focus on shareholder returns. Phase 1 is expected to have a capital efficiency of ~$35,000/bbl/d.

Activity in the first quarter of 2026 included central processing facility, road and pad-site preparation during the winter construction season. The Company is finalizing cost estimates and advancing execution planning, including the use of lump-sum contracting strategies where appropriate to improve cost and schedule certainty. Planning for local pipeline connections and utility services have progressed and the Company has secured critical path contracts including gas feedstock and diversified long-term egress options. The Company anticipates Phase 1 to be sanctioned in the second half of 2026 with the majority of the capital to follow the current Leismer expansion project.

Duvernay Energy Corporation Q1 2026 Highlights and Operations Update

Production: Production of 4,613 boe/d (81% Liquids). Cash Flow:Operating Income of $19.6 million with an Operating Netback of $47/boe. Adjusted Funds Flow of $15.8 million. March Operating Netback of $65/boe. Capital: $21.8 million of capital expenditures including drilling and completions on a four-well pad (30% working interest), the drilling of a land retention well (100% working interest), and construction of regional infrastructure. Increased 2026 Capital Program.Increased to $79 million to include an additional three-well 100% working interest pad and additional operational readiness for activity in 2027.

A four-well 30% pad at 7-15-64-17W5 (30% working interest) with average laterals of ~4,500 meters was completed in March and brought on stream in April with average IP21s of 1,635 boe/d per well (91% Liquids). The Company is pleased by the strong production results and free condensate yields resulting in exceptional netbacks. In the first quarter of 2026, the Company also drilled a 3,860 meter 100% working interest land retention well, securing land tenure of ~32 sections in its northern Duvernay land position.

Supported by stronger commodity prices and continued confidence in asset performance, the Company is accelerating the timing of a three-well pad at 5-17-64-16W5 (100% working interest) into Q3 2026. Production from the pad is expected to commence in the fourth quarter, contributing to an expected exit rate of ~6,000 boe/d.

DEC has an independent strategy and capital allocation framework with self-funded 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.

About Athabasca Oil Corporation

Athabasca Oil Corporation is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. Situated in Alberta’s Western Canadian Sedimentary Basin, the Company has amassed a significant land base of extensive, high quality resources. Athabasca’s light oil assets are held in a private subsidiary (Duvernay Energy Corporation) in which Athabasca owns a 70% equity interest. Athabasca’s common shares trade on the TSX under the symbol “ATH”. For more information, visit www.atha.com.