Athabasca Oil Corporation press release

Athabasca Oil Announces 2025 Year-end Results and Reserves

2026-03-05

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

Athabasca Oil Announces 2025 Year-end Results and Reserves

CALGARY, Alberta, March 04, 2026 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to report its audited 2025 year-end results and reserves. The annual results are highlighted by strong operational performance across all assets, resilient financial performance, and execution of continued shareholder returns. Athabasca provides investors unique positioning to top tier liquids weighted assets (Thermal Oil and Duvernay) with a focus on maximizing cash flow per share growth by investing in competitive projects alongside a return of capital framework focused on share buybacks.

Year-end 2025 Consolidated Corporate Results

Production: Average annual production of 39,375 boe/d (98% Liquids), representing 7% (17% per share) growth year-over-year. Strong performance across all assets supported the Company reaching the high-end of its guidance of 37,500 – 39,500 boe/d. Thermal Oil annual production was 35,905 bbl/d and Duvernay Energy Corporation (“DEC”) annual production was 3,470 boe/d (76% Liquids). Fourth quarter consolidated production was 41,061 boe/d (98% Liquids).

Cash Flow: Adjusted Funds Flow of $504 million ($1.01 per share). Cash flow from operating activities of $520 million. Free Cash Flow of $217 million from Athabasca (Thermal Oil) demonstrates the resilience of a quality asset base and clean balance sheet. DEC growth was self-funded separately within its cash flow and balance sheet.

Capital Program: $323 million total capital expenditures, consistent with guidance, including $231 million at Leismer to support the progressive growth project and $75 million in Duvernay development.

Shareholder Returns: Purchased 39 million shares through the Company’s buyback program for an aggregate $230 million, demonstrating its commitment to return 100% of Free Cash Flow to shareholders in 2025. The Company has now purchased ~$720 million in shares and has reduced its fully diluted share count by 24% since commencing the buyback program in 2023. Following the expiry of its current Normal Course Issuer Bid (“NCIB”) on March 17, 2026 the Company will renew a fourth annual NCIB with the Toronto Stock Exchange.

2025 Year-end Consolidated Reserves1

Differentiated Long-life Reserves: Athabasca holds 1.3 billion boe of Proved Plus Probable (“2P”) reserves and ~1 billion barrels of Contingent Resource (Best Estimate). The 2P reserves underpin significant intrinsic value of $5.8 billion NPV102 ($12.13 per share).

Deep Value with Funded Growth Optionality within Thermal Oil: The Thermal Oil division has a 2P NPV102 of $5.2 billion and provides an oil focused platform underpinning funded growth to >60,000 bbl/d by 2030 with Phase 1 of Corner. The Company’s growth outlook will accelerate an unparalleled ~30 year 1P and ~85 year 2P current reserve life.

Duvernay Value Capture: DEC 2P reserves increased by 9% to 79 mmboe, representing a NPV102 value of $592 million. Continued growth is attributed to development on its operated lands. DEC has an estimated 432 gross drilling locations (198 net) across its ~200,000 gross acre land base.

2026 Guidance Maintained

Consolidated Budget: Athabasca is planning capital expenditures of ~$310 million with average production of 37,000 – 39,000 boe/d (98% Liquids), inclusive of a ~2,500 boe/d impact of planned turnarounds across its assets. Growth will materialize in the second half of 2026 with an exit rate of ~43,000 boe/d, driven by the Leismer expansion project. Strong operational momentum is expected to continue into 2027 as Leismer ramps up to regulatory capacity and additional Duvernay production is added.

Cash Flow Outlook: The Company forecasts consolidated Adjusted Funds Flow between $425 – $450 million3 in 2026. 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 2026 annual Adjusted Funds Flow by ~$10 million and ~$17 million, respectively.

Balance Sheet Management: Athabasca will prudently manage its capital structure as operations increase in scale. A Net Cash position currently provides the Company capital allocation flexibility for its business initiatives including multi-year capital projects and augmenting strategic share buybacks. Athabasca is committed to maintaining a best-in-class balance sheet with a targeted Net Debt to Adjusted Funds Flow metric less than 0.5x over the long-term.

Operations Update

Leismer Expansion On Track: The winter drilling program will conclude in March and includes twelve well pairs that will be commissioned and steamed in the second half of the year. In conjunction with the planned facility additions that will be completed during the turnaround in May, these well pairs will drive strong production momentum exiting the year and progressive growth up to 40,000 bbl/d in late 2027.

Hangingstone Resilience: Current production of ~9,000 bbl/d following the addition of two well pairs in 2025. No additional drilling is required in 2026 to maintain production above a mid-term target at the asset of 8,000 bbl/d. Hangingstone will also undergo a planned turnaround in April.

Corner Readiness: The Corner asset will be developed through a capital-efficient modular design with 15,000 bbl/d project phases. Current activity includes central processing facility, road and pad-site preparation during the winter construction season. The Company has finalized cost estimates and is advancing lump-sum execution structures to enhance certainty over project cost and schedule. Additionally, the Company has secured critical path contracts including gas feedstock and diversified long-term egress. The Company anticipates Phase 1 to be sanctioned in the second half of 2026, contingent on a favorable macro environment, with the majority of the capital to follow the current Leismer expansion project. The project is expected to be self-funded while maintaining a strong balance sheet and a focus on shareholder returns. Phase 1 will provide substantial production growth starting in 2029.

Exceptional Duvernay Well Results: Wells brought on stream in the second half of 2025 demonstrated continued strong performance validating type-curves and longer-term development plans. The operated three-well pad at 4-18-64-16W5 (100% WI) has now realized average IP90s of ~945 boe/d (89% Liquids). An additional 4-well pad at 7-15-64-17 W5 (30% WI) was rig released in February with completions underway and a planned onstream date in April. The Company is pleased by the strong production results with initial rates and free condensate yields resulting in exceptional netbacks. DEC will preserve its valuable inventory during periods of market volatility with flexibility to accelerate development in supportive macro conditions.

Corporate Consolidated Strategy

Thermal Oil Scale: The Company’s Thermal Oil division provides an oil focused platform underpinning funded growth to >60,000 bbl/d by 2030 with 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. The 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 to ~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: Athabasca maintains a strong and differentiated balance sheet with a $59 million consolidated Net Cash position, including $316 million of cash. The Company will prudently manage its capital structure as operations increase in scale. A Net Cash position currently provides the Company capital allocation flexibility for its business initiatives including multi-year capital projects and augmenting strategic share buybacks. Athabasca is committed to maintaining a best-in-class balance sheet with a targeted Net Debt to Adjusted Funds Flow metric less than 0.5x over the long-term. Athabasca (Thermal Oil) also has $2.1 billion in tax pools, including $1.6 billion of immediately deductible non-capital losses, sheltering cash taxes beyond 2030.

Exceptional Shareholder Returns: The Company has returned ~$1.1 billion to shareholders since 2021, including $386 million of debt reduction and ~$720 million of share buybacks. The buyback program has driven a 24% reduction in fully diluted shares since 2023 at an average price of $4.82/sh, representing a ~60% discount to its 2025 2P reserves value per share of $12.132. Share buybacks remain an important capital allocation tool where valuation supports compelling risk-adjusted returns relative to intrinsic net asset value. Athabasca is committed to returning 100% of Free Cash Flow to shareholders through share buybacks in 2026. Any repurchases beyond Free Cash Flow will be undertaken selectively and within a disciplined framework that prioritizes funding the Company’s core growth projects and maintaining a strong balance sheet. Athabasca forecasts $1.1 billion3 of 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 share4 to 2030 and beyond.

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 Consolidated reserves reflect gross reserves and financial metrics before taking into account Athabasca’s 70% equity interest in Duvernay Energy.

2 Net present value of future net revenue before tax at a 10% discount rate (NPV 10 before tax) for 2025 is based on an average of McDaniel, Sproule and GLJ pricing as at January 1, 2026.

3 Pricing Assumptions: 2026+ US$65 WTI, US$12.50 WCS heavy differential, C$3 AECO, and 0.725 C$/US$ FX.

4 The 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 6x Enterprise Value/Debt Adjusted Cash Flow in 2027 and beyond.

Financial and Operational Highlights

Three months ended

December 31, Year Ended

December 31,

($ Thousands, unless otherwise noted) 2025 2024 2025 2024

CORPORATE CONSOLIDATED(1)

Petroleum and natural gas production (boe/d)(2) 41,061 37,236 39,375 36,815

Petroleum, natural gas and midstream sales $301,028 $352,456 $1,362,339 $1,442,091

Operating Income(2) $128,231 $155,022 $567,363 $620,092

Operating Income Net of Realized Hedging(2)(3) $132,608 $153,119 $563,306 $613,630

Operating Netback ($/boe)(2) $34.50 $45.53 $39.82 $46.14

Operating Netback Net of Realized Hedging ($/boe)(2)(3) $35.68 $44.97 $39.54 $45.66

Capital expenditures $89,955 $92,944 $322,544 $268,042

Cash flow from operating activities $138,259 $158,677 $520,458 $557,541

per share – basic $0.28 $0.30 $1.04 $1.02

Adjusted Funds Flow(2) $117,473 $143,737 $503,936 $560,935

per share – basic $0.24 $0.27 $1.01 $1.02

ATHABASCA (THERMAL OIL)

Bitumen production (bbl/d)(2) 35,795 33,849 35,905 33,505

Petroleum, natural gas and midstream sales $297,101 $346,716 $1,344,178 $1,419,670

Operating Income(2) $109,651 $143,246 $523,401 $569,083

Operating Netback ($/bbl)(2) $33.93 $46.30 $40.33 $46.54

Capital expenditures $76,173 $74,268 $247,624 $194,902

Adjusted Funds Flow(2) $99,925 $133,398 $464,506 $516,612

Free Cash Flow(2) $23,752 $59,130 $216,882 $321,710

DUVERNAY ENERGY(1)

Petroleum and natural gas production (boe/d)(2) 5,266 3,387 3,470 3,310

Percentage Liquids (%)(2) 81% 75% 76% 76%

Petroleum, natural gas and midstream sales $27,762 $20,179 $74,747 $83,194

Operating Income(2) $18,580 $11,776 $43,962 $51,009

Operating Netback ($/boe)(2) $38.35 $37.79 $34.72 $42.10

Capital expenditures $13,782 $18,676 $74,920 $73,140

Adjusted Funds Flow(2) $17,548 $10,339 $39,430 $44,323

Free Cash Flow(2) $3,766 $(8,337) $(35,490) $(28,817)

NET INCOME AND COMPREHENSIVE INCOME

Net income and comprehensive income(4) $46,596 $264,336 $245,110 $467,743

per share – basic(4) $0.10 $0.50 $0.49 $0.85

per share – diluted(4) $0.10 $0.50 $0.49 $0.85

COMMON SHARES OUTSTANDING

Weighted average shares outstanding – basic 486,104,751 526,233,362 499,275,874 547,795,407

Weighted average shares outstanding – diluted 490,256,842 530,796,068 502,996,664 553,382,675

As at ($ Thousands) December 31,

2025 December 31,

2024

LIQUIDITY AND BALANCE SHEET (CONSOLIDATED)

Cash and cash equivalents $316,366 $344,836

Available credit facilities(5) $126,595 $136,324

Face value of long-term debt $201,209 $200,000

(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 $4.4 million and loss of $4.1 million for the three months and year ended December 31, 2025 (three months and year ended December 31, 2024 – loss of $1.9 million and $6.5 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) Year-end 2025 Highlights and Operations Update

Production: 35,905 bbl/d (27,372 bbl/d at Leismer and 8,533 bbl/d at Hangingstone).

Cash Flow: Operating Income of $523.4 million with an Operating Netback of $40.33/bbl. Adjusted Funds Flow of $464.5 million.

Capital: $247.6 million of capital expenditures in 2025, with $230.6 million at Leismer.

Free Cash Flow: $216.9 million of Free Cash Flow supporting corporate return of capital commitment.

Leismer

Bitumen production for 2025 averaged 27,372 bbl/d, up 5% year over year (15% per share).

In Q4 2025, two well pairs on Pad L10 commenced steaming and were brought on production in December and January with current production of ~27,000 bbl/d (February). In anticipation of the next growth phase, Athabasca has now drilled 12 well pairs. The Company completed drilling six well pairs on Pad L11 in Q4 2025 and six well pairs on Pad 10 in March 2026.

At the central processing facility, the Company has completed structural foundation work for the expansion facilities and, last fall, successfully set two new steam generators. Additional major equipment has been delivered to site, including a treater, degasser and heat exchangers. The $300 million expansion project includes an estimated $190 million for facility capital and an estimated $110 million for growth wells. By year-end 2025, ~50% of total capital exposure for the expansion project was completed, with the remainder of capital 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.

The Company is preparing for a three-week facility turnaround to be completed in May. Activities include recurring maintenance on a four-year frequency with additional scope for the tie-in of new equipment. Steaming of the 12 new well pairs will commence in a staged sequence following the turnaround. An exit rate of ~31,000 – 32,000 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.

Hangingstone

Bitumen production for 2025 average 8,533 bbl/d, up 15% year over year (25% per share).

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 (February). Current well pair performance remains strong between 800 – 1,100 bbl/d per well. Hangingstone continues to deliver meaningful cash flow contributions and the Company expects minimal capital activity this year given its resilient production performance. The Company has a planned two-week turnaround that will be completed in April.

Corner

The Corner asset is a large de-risked oil sands asset adjacent to Leismer with 353 million barrels of Proved plus Probable reserves and 520 million barrels Contingent Resource (Best Estimate Unrisked). The asset has regulatory approval for 40,000 bbl/d with over 300 delineation wells and ~80% seismic coverage. Reservoir quality is similar to or better than Leismer, and comparable to other top-quality assets in the McMurray Formation fairway, with an expected steam-oil ratio of less than 3x.

The Corner asset will be developed through a capital-efficient modular design with 15,000 bbl/d project phases. 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, with the full development expected to achieve lower average capital intensity as scale is realized.

Current activity includes central processing facility, road and pad-site preparation during the winter construction season. The Company has finalized cost estimates and is advancing lump-sum execution structures to enhance certainty over project cost and schedule. Additionally, the Company has secured critical path contracts including gas feedstock and diversified long-term egress. The Company anticipates Phase 1 to be sanctioned in the second half of 2026, contingent on a favorable macro environment, with the majority of the capital to follow the current Leismer expansion project.

Duvernay Energy Corporation Year-end 2025 Highlights and Operations Update

Production: Production of 3,470 boe/d (76% Liquids); achieved an exit rate of 5,500 boe/d.

Cash Flow: Operating Income of $44.0 million with an Operating Netback of $34.72/boe. Adjusted Funds Flow of $39.4 million.

Capital: $74.9 million of capital expenditures including drilling and completions on a four well pad (30% working interest), completions on a three well pad (100% working interest), drilling operations on a four well pad (30% working interest) and construction of regional infrastructure.

In Q4 2025, DEC brought a three well pad (100% working interest) on production. The three new wells have average IP30’s of ~1,125 boe/d (90% liquids) and average IP90’s of ~945 boe/d (89% Liquids). A four-well 30% working interest pad was rig released in February with average laterals of ~4,500 meters. Completions are underway with a planned on-stream in April. In Q1, the Company recently drilled a 3,860 meter 100% working interest land retention well, securing land tenure of ~32 sections in its northern Duvernay land position.

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. In periods of market volatility DEC will preserve its valuable inventory with flexibility to accelerate development in supportive macro conditions. Value crystallization for shareholders is expected once the asset has reached a material scale through its exceptional land base and drilling inventory.