Athabasca Oil Corporation press release

Athabasca Oil Reports 2026 Third Quarter Results

2026-10-28

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

CALGARY, Alberta, Oct. 28, 2026 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) reported third quarter results highlighted by continued execution of its funded growth strategy.

Q3 2026 Corporate Consolidated Results

Production: Production of 38,602 boe/d (98% Liquids), represents a 20% increase from Q2, following planned turnarounds during Q2. Cash Flow:Adjusted Funds Flow of $161 million ($0.33 per share), representing 31% growth from Q2 and 25% year over year. Cash flow from operating activities of $115 million. Free Cash Flow of $71 million from Athabasca (Thermal Oil). Netbacks:Quarterly Operating Netback of $59/bbl in Thermal Oil and $55/boe in Duvernay Energy. Capital Program: Total capital expenditures of $112 million, including $54 million at Leismer to support the expansion project and $38 million in Duvernay development. Balance Sheet: $82 million Net Cash position with Liquidity of $838 million. Outlook: At Leismer, two new steam generators were commissioned at the end of October, and seven well pairs are currently being steamed. The expansion continues to advance toward production of 40,000 bbl/d by year-end 2027. A three-well operated Duvernay pad was also completed and is expected to be placed on production in November.

Cenovus Transaction

On October 5, 2026, Athabasca announced that it entered into a definitive arrangement agreement with Cenovus Energy Inc. (“Cenovus”), pursuant to which Cenovus will acquire all of the issued and outstanding common shares of Athabasca for $12.00 per Athabasca Share in a $5.7 billion cash-and-share transaction (the “Transaction”).

Compelling Value and Transaction Metrics: The $12.00 per share consideration, represents a 14% premium to Athabasca’s 20-day volume-weighted average as at October 2, 2026. The Transaction implies compelling metrics1of $127,000 per boe/d and 10.2x Debt Adjusted Funds Flow based on Athabasca management’s forecasts. These metrics compare well with historical corporate energy transactions. Recognition of Exceptional Shareholder Value Creation: The Transaction recognizes the substantial value created by Athabasca, as demonstrated by total shareholder return exceeding 1,000% over the past five years. Flexible Consideration with Value Certainty and Continued Upside: The aggregate consideration mix of 65% cash and 35% equity provides Athabasca shareholders with near-term liquidity and value certainty, together with continued upside exposure to Cenovus’s broader portfolio of leading in-situ assets including Christina Lake, Foster Creek and Sunrise in the McMurray fairway. Athabasca shareholders have additional election flexibility to prioritize near-term value crystallization, continued participation in future value creation across Cenovus’s in-situ and integrated portfolio or a combination of both. Meaningful Premium to Athabasca’s After-Tax Net Asset Value: The Purchase Price represents a premium of 25% to Athabasca’s Proved plus Probable After-Tax Net Asset Value2. Athabasca shareholders will receive significant and immediate recognition of the value embedded in Athabasca’s standalone growth plans, including the Leismer expansion, Corner development and Duvernay Energy. Accelerated Development of Athabasca’s Deep Thermal Resource Portfolio: Athabasca’s extensive, long-life Thermal resource portfolio (1.2 billion barrels Proved plus Probable reserves and 1 billion barrels Best Estimate Contingent Resource) will benefit from increased and accelerated development under Cenovus’s ownership. Cenovus brings an investment-grade balance sheet, leading in-situ operating and development expertise, diversified market access and a proven track record of successfully executing and operating large-scale thermal oil projects. Specifically, Corner Phases 2 and 3 and further Leismer expansions are expected to be accelerated relative to the timelines contemplated in Athabasca’s standalone plan. Synergies: Consolidating Cenovus and Athabasca assets in the McMurray fairway is expected to generate significant operational and development synergies to enhance asset value. Cenovus’s leading in-situ expertise and scale position it to execute a broader growth strategy in which Athabasca shareholders can participate through their Cenovus shares. Its integrated platform and scale are better positioned to manage ongoing fiscal, regulatory and market-access risks. Duvernay Consolidation: Cenovus and Athabasca are currently equity partners in Duvernay Energy Corporation. The Transaction consolidates ownership of Duvernay Energy Corporation under Cenovus, simplifies development planning and complements Cenovus’s conventional business. Cenovus will be able to accelerate development, utilizing its strong balance sheet to drive growth and capture value in these top-tier assets. Timeline:The management information circular is expected to be mailed to shareholders and filed on SEDAR+ in early November 2026. The shareholder meeting is scheduled for November 27, with closing expected in December 2026, subject to shareholder, court, regulatory and stock exchange approvals and other customary closing conditions.

_Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measure (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Debt Adjusted Funds Flow, Net Cash) and production disclosures. Notes: 1. Metrics based on $5.7 billion enterprise value to Athabasca management’s 2026 exit production and Debt Adjusted Funds Flow forecast. 2026 strip commodity prices (Sept. 28): US$85 WTI, US$15.50 Western Canadian Select heavy differential, C$1.80 AECO, 0.72 C$/US$ FX. 2. After-Tax Net Asset Value per Share calculated as at December 31, 2025 as evaluated by Athabasca's independent reserves evaluator McDaniel as Proved plus Probable after-tax NPV10, adjusted for Net Cash as at June 30, 2026, and the Duvernay Energy minority interest divided by common shares. _

Financial and Operational Highlights

| | Three months ended September 30, | | Nine months ended September 30, | | | | | | | | | | | | | | | ($ Thousands, unless otherwise noted) | 2026 | | | 2025 | | | 2026 | | | 2025 | | | | | | | | CORPORATE CONSOLIDATED(1) | | | | | | | | | | | | | | | | | | Petroleum and natural gas production (boe/d)(2) | | 38,602 | | | | 39,599 | | | | 36,978 | | | | 38,807 | | | | Petroleum, natural gas and midstream sales | $ | 461,045 | | | $ | 333,397 | | | $ | 1,199,934 | | | $ | 1,061,311 | | | | Operating Income(2) | $ | 217,281 | | | $ | 151,835 | | | $ | 529,893 | | | $ | 439,132 | | | | Operating Income Net of Realized Hedging(2)(3) | $ | 172,627 | | | $ | 144,650 | | | $ | 472,496 | | | $ | 430,698 | | | | Operating Netback ($/boe)(2) | $ | 58.65 | | | $ | 42.50 | | | $ | 52.27 | | | $ | 41.71 | | | | Operating Netback Net of Realized Hedging ($/boe)(2)(3) | $ | 46.60 | | | $ | 40.49 | | | $ | 46.61 | | | $ | 40.91 | | | | Capital expenditures | $ | 111,683 | | | $ | 96,190 | | | $ | 309,751 | | | $ | 232,589 | | | | Cash flow from operating activities | $ | 114,571 | | | $ | 157,414 | | | $ | 350,542 | | | $ | 382,199 | | | | per share - basic | $ | 0.24 | | | $ | 0.32 | | | $ | 0.73 | | | $ | 0.76 | | | | Adjusted Funds Flow(2) | $ | 160,988 | | | $ | 129,197 | | | $ | 412,038 | | | $ | 386,463 | | | | per share - basic | $ | 0.33 | | | $ | 0.26 | | | $ | 0.85 | | | $ | 0.77 | | | | ATHABASCA (THERMAL OIL) | | | | | | | | | | | | | | | | | | Bitumen production (bbl/d)(2) | | 34,319 | | | | 36,590 | | | | 32,368 | | | | 35,942 | | | | Petroleum, natural gas and midstream sales | $ | 455,514 | | | $ | 329,542 | | | $ | 1,179,120 | | | $ | 1,047,077 | | | | Operating Income(2) | $ | 195,583 | | | $ | 142,631 | | | $ | 457,216 | | | $ | 413,750 | | | | Operating Netback ($/bbl)(2) | $ | 59.08 | | | $ | 43.28 | | | $ | 51.49 | | | $ | 42.46 | | | | Capital expenditures | $ | 73,685 | | | $ | 64,965 | | | $ | 243,170 | | | $ | 171,451 | | | | Adjusted Funds Flow(2) | $ | 145,084 | | | $ | 121,131 | | | $ | 361,195 | | | $ | 364,581 | | | | Free Cash Flow(2) | $ | 71,399 | | | $ | 56,166 | | | $ | 118,025 | | | $ | 193,130 | | | | DUVERNAY ENERGY(1) | | | | | | | | | | | | | | | | | | Petroleum and natural gas production (boe/d)(2) | | 4,283 | | | | 3,009 | | | | 4,610 | | | | 2,865 | | | | Percentage Liquids (%)(2) | 77 | % | | 75 | % | | 80 | % | | 73 | % | | | | | | | Petroleum, natural gas and midstream sales | $ | 31,848 | | | $ | 15,840 | | | $ | 103,032 | | | $ | 46,985 | | | | Operating Income(2) | $ | 21,698 | | | $ | 9,204 | | | $ | 72,677 | | | $ | 25,382 | | | | Operating Netback ($/boe)(2) | $ | 55.07 | | | $ | 33.25 | | | $ | 57.76 | | | $ | 32.45 | | | | Capital expenditures | $ | 37,998 | | | $ | 31,225 | | | $ | 66,581 | | | $ | 61,138 | | | | Adjusted Funds Flow(2) | $ | 15,904 | | | $ | 8,066 | | | $ | 50,843 | | | $ | 21,882 | | | | Free Cash Flow(2) | $ | (22,094 | ) | | $ | (23,159 | ) | | $ | (15,738 | ) | | $ | (39,256 | ) | | | NET INCOME AND COMPREHENSIVE INCOME | | | | | | | | | | | | | | | | | | Net income and comprehensive income(4) | $ | 77,809 | | | $ | 69,640 | | | $ | 190,266 | | | $ | 198,514 | | | | per share - basic(4) | $ | 0.16 | | | $ | 0.14 | | | $ | 0.39 | | | $ | 0.39 | | | | per share - diluted(4) | $ | 0.16 | | | $ | 0.14 | | | $ | 0.39 | | | $ | 0.39 | | | | COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | | | Weighted average shares outstanding - basic | | 481,270,751 | | | | 494,509,594 | | | | 482,261,343 | | | | 503,714,495 | | | | Weighted average shares outstanding - diluted | | 484,874,847 | | | | 497,929,426 | | | | 486,109,732 | | | | 507,263,981 | | |

| | September 30, | | December 31, | | | | | As at ($ Thousands) | 2026 | | 2025 | | | | | LIQUIDITY AND BALANCE SHEET (CONSOLIDATED) | | | | | | | | Cash and cash equivalents | $ | 305,007 | | $ | 316,366 | | | Available credit facilities(5) | $ | 532,862 | | $ | 126,595 | | | Face value of long-term debt | $ | 216,128 | | $ | 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 $44.7 million and $57.4 million for the three and nine months ended September 30, 2026 (three and nine months ended September 30, 2025 – loss of $7.2 million and $8.4 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) Q3 2026 Highlights and Operations Update

Production: Third quarter production of 34,319 bbl/d (25,020 bbl/d at Leismer and 9,299 bbl/d at Hangingstone). Cash Flow:Operating Income of $195.6 million with an Operating Netback of $59.08/bbl. Adjusted Funds Flow of $145.1 million. Capital: $73.7 million of capital expenditures in Q3, with $54.1 million at Leismer.

Leismer

The Company’s expansion project continues to advance. Two new steam generators were commissioned in October, and will provide steam generation capacity for the full ramp-up to 40,000 bbl/d. Seven well pairs are currently being steamed. An additional five well pairs will commence steaming in Q4.

The winter drilling program commenced in September and will include nine well pairs and three redevelopment well pairs. A total new well count of 24 well pairs along with commissioning of additional facility equipment through H1 2027 will support growth to 40,000 bbl/d by year-end 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. The project remains on budget and on schedule with the original sanction plans announced in July 2024.

Hangingstone

Hangingstone production continues to be stable at ~9,300 bbl/d, delivering meaningful cash flow contributions to the Company.

Corner

The Company continues to progress the 15,000 bbl/d Phase 1 project including site preparation, access road construction and detailed engineering work. Sanction timing remains subject to assessment of the Government of Alberta’s new fiscal framework and the pending transaction with Cenovus.

Duvernay Energy Corporation Q3 2026 Highlights and Operations Update

Production: Production of 4,283 boe/d (77% Liquids). Cash Flow:Operating Income of $21.7 million with an Operating Netback of $55.07/boe. Adjusted Funds Flow of $15.9 million. Capital: $38.0 million of capital expenditures including drilling and completions on a three-well pad (100% working interest), and construction of regional infrastructure.

During the quarter the Company drilled and completed a three-well pad at 5-17-64-16W5 (100% working interest). Production from the pad is expected to commence in early November. The Company is advancing readiness for an additional operated multi-well pad for this winter.

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.

| For more information, please contact: | | | Matthew Taylor | Robert Broen | | Chief Financial Officer | President and CEO | | 1-403-817-9104 | 1-403-817-9190 | | mtaylor@atha.com | rbroen@atha.com |

Reader Advisory:

This News Release contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words “anticipate”, “plan”, “project”, “continue”, “maintain”, “may”, “estimate”, “expect”, “will”, “target”, “forecast”, “could”, “intend”, “potential”, “guidance”, “outlook” and similar expressions suggesting future outcome are intended to identify forward-looking information. The forward-looking information is not historical fact, but rather is based on the Company’s current plans, objectives, goals, strategies, estimates, assumptions and projections about the Company’s industry, business and future operating and financial results. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. No assurance can be given that these expectations will prove to be correct and such forward-looking information included in this News Release should not be unduly relied upon. This information speaks only as of the date of this News Release. In particular, this News Release contains forward-looking information pertaining to, but not limited to, the following: the Purchase Price per Athabasca share to be received pursuant to the Transaction; the anticipated benefits of the Transaction to Athabasca shareholders, including but not limited to near-term liquidity and value certainty and participation in future upside of Cenovus; the form of consideration and elections under the Transaction; the implied value of the Transaction and Athabasca management’s 2026 exit production and Debt Adjusted Funds Flow forecast; the anticipated timing for closing of the Transaction; the expectation that Cenovus is better positioned to manage ongoing fiscal, regulatory and market-access risk; the expectation that the Transaction provides significant and immediate recognition of the value embedded in Athabasca's standalone growth plans; the anticipated accelerated development of Athabasca’s assets under Cenovus’s ownership, including the advancement of Corner Phases 2 and 3 and further Leismer expansions relative to the timelines contemplated in Athabasca’s standalone plans; the anticipated ramp-up of production at Leismer, including the timing of steaming of well pairs, the winter drilling program and the expectation that the Leismer expansion will remain on budget and on schedule; the development of the Corner Phase 1 project; Duvernay Energy's development plans, including the timing of production from new well pads and the construction of regional infrastructure; the expectations that consolidating Cenovus and Athabasca assets in the McMurray fairway will generate significant operational and development synergies to enhance asset value; the expectations that the consolidated ownership of Duvernay Energy under Cenovus as a result of the Transaction will simplify development planning, accelerate development, drive growth, capture value and complement Cenovus’s conventional business; the anticipated timing for holding of the shareholder meeting; the expected timing of the mailing of the management information circular; and other similar statements.

In addition, information and statements in this News Release relating to "Reserves" and “Resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. With respect to forward-looking information contained in this News Release, assumptions have been made regarding, among other things: the timely completion of the Transaction and the satisfaction of the conditions to which the Transaction is subject to; the approval of the Transaction at the shareholder meeting; Athabasca’s standalone plan; regulatory and government approvals for the Transaction, including approval of the Court of King’s Bench of Alberta and receipt of applicable regulatory and stock exchange approvals, in each case on the anticipated timelines; the realization of anticipated benefits of the Transaction including significant operational and development synergies; commodity prices; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which the Company conducts and will conduct business and the effects that such regulatory framework will have on the Company, including on the Company’s financial condition and results of operations; the Company’s financial and operational flexibility; the Company’s financial sustainability; Athabasca's cash flow break-even commodity prices; the Company’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the applicability of technologies for the recovery and production of the Company’s reserves and resources; future capital expenditures to be made by the Company; future production levels; the Company’s ability to obtain financing and/or enter into joint venture arrangements, on acceptable terms as permitted under the Agreement; operating costs; compliance of counterparties with the terms of contractual arrangements; impact of increasing competition globally; collection risk of outstanding accounts receivable from third parties; geological and engineering estimates in respect of the Company’s reserves and resources; recoverability of reserves and resources; the geography of the areas in which the Company is conducting exploration and development activities and the quality of its assets. Certain other assumptions related to the Company’s Reserves and Resources are contained in the report of McDaniel & Associates Consultants Ltd. (“McDaniel”) evaluating Athabasca’s Proved Reserves, Probable Reserves and Contingent Resources as at December 31, 2025 (which is referred to herein as the "McDaniel Report”).