Athabasca Oil Announces 2024 Year-end Results including Record Cash Flow, Strong Return of Capital and Significant Reserves Growth

2025-03-06

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

CALGARY, Alberta, March 05, 2025 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to report its audited 2024 year-end results and reserves. 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 that will continue to direct 100% of Free Cash Flow to share buybacks in 2025.

Year-end 2024 Consolidated Corporate Results

Production: Annual production of 36,815 boe/d (98% Liquids), representing 7% (14% per share) growth year over year. Strong production performance across all assets supported the Company achieving its upwardly revised annual guidance of 36,000 – 37,000 boe/d (July 2024). Record Cash Flow: Adjusted Funds Flow of $561 million ($1.02 per share), representing 102% per share growth year over year. Cash Flow from Operating Activities of $558 million. Free Cash Flow of $322 million from Athabasca (Thermal Oil). Capital Program: $268 million, within annual guidance of $270 million, highlighted by $164 million invested at Leismer for completing the 28,000 bbl/d expansion and advancing the 40,000 bbl/d expansion project and $73 million in Duvernay development. Pristine Balance Sheet: Net Cash position of $123 million; Liquidity of $481 million ($345 million of cash). Athabasca has $2.3 billion of tax pools (~80% high-value and immediately deductible).

Return of Capital Strategy

Achieved Return of Capital Commitment in 2024: Athabasca (Thermal Oil) allocated ~100% of its Free Cash Flow (“FCF”) to return of capital in 2024 completing $317 million in share repurchases. Cumulative Return of Capital of ~$900 million: Since 2021, the Company has delivered a deliberate return of capital strategy, prioritizing ~$400 million of debt reduction followed by share buybacks of ~$500 million to date. The Company has reduced its fully diluted share count by ~18% since Q1 2023. Continued 100% of Free Cash Flow (Thermal Oil) Return to Shareholders through buybacks in 2025: The Company expects to utilize ~100% of its Normal Course Issuer Bid (“NCIB”) for the second straight year. Following the expiry of its current NCIB on March 17, 2025 the Company will renew a third annual NCIB with the Toronto Stock Exchange.

2024 Year-end Consolidated Reserves 1

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). This represents $6.4 billion 2 NPV10 of 2P reserves ($12.44 per share), an increase of 35% per share from 2023, and includes $3.8 billion 2 of Total Proved (“1P”) reserves ($7.28 per share), an increase of 34% per share from 2023. Thermal Oil Underpins Deep Value: An $813 million increase in 2P NPV10 2 to $5.8 billion is supported by well design driving improved capital efficiencies, lower operating costs at both producing projects and constructive heavy oil pricing. These reserves represent a ~30 year 1P and ~90 year 2P reserve life. Duvernay Value Capture: Duvernay Energy Corporation (“DEC”) 2P reserves increased by 170% to 73 mmboe, representing a NPV10 2 value of $614 million. Strong growth is attributed to establishing development on the newly operated lands and accelerated development on previous land positions. DEC has an estimated 444 gross drilling locations (204 net) across its ~200,000 acre (gross) land base.

2025 Guidance Maintained

Athabasca (Thermal Oil): The Thermal Oil division underpins the Company’s strong Free Cash Flow outlook, with unchanged production guidance of 33,500 – 35,500 bbl/d and an unchanged ~$250 million capital budget. The program at Leismer includes the tie-in of six redrills and four new sustaining well pairs on Pad 10 early in 2025, along with continued pad and facility expansion work for the progressive expansion to 40,000 bbl/d. At Hangingstone two extended reach sustaining well pairs (~1,400 meter average laterals) that were drilled in 2024 will be placed on production in March. Duvernay Energy Corporation: The 2025 capital program of ~$85 million includes the completion of a 100% working interest (“WI”) three-well pad that was drilled in 2024 and the drilling and completion of a 30% WI four-well pad. Activity will also include spudding two additional multi-well pads in H2 2025 (one operated 100% WI pad and one 30% WI pad) with completions to follow in 2026. DEC is constructing gathering system infrastructure on its operated assets that will support exit production of ~5,500 boe/d this year and momentum into 2026. Significant Free Cash Flow: The Company forecasts consolidated Adjusted Funds Flow between $525 – $550 million 3 , including $475 - $500 million from its Thermal Oil assets. Every +US$1/bbl move in West Texas Intermediate (“WTI”) and Western Canadian Select (“WCS”) heavy oil impacts annual Adjusted Funds Flow by ~$10 million and ~$17 million, respectively. Athabasca forecasts generating ~$1.8 billion of Free Cash Flow 3 from its Thermal Oil assets over five years (2025-29), representing ~70% of its current equity market capitalization. Competitive and Resilient Break-evens. Thermal Oil is competitively positioned with sustaining capital to hold production flat funded within cash flow at ~US$50/bbl WTI 1 and growth initiatives fully funded within cash flow below US$60/bbl WTI 1 . The Company’s operating break-even is estimated at ~US$40/bbl WTI 3 . Every $0.01 change in the Canada/US exchange rate is ~$10 million in annual Adjusted Funds Flow, and a weakened Canadian dollar would help cushion the impact that any potential US tariffs may have on commodity pricing. Steadfast Focus on Cash Flow Per Share Growth: The Company forecasts ~20% compounded annual cash flow per share 3 growth between 2025 – 2029 driven by investing in attractive capital projects and prioritizing share buybacks with Free Cash Flow.

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, Net Cash, Liquidity) 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 2024 is based on an average of McDaniel, Sproule and GLJ pricing as at January 1, 202 5 . 3 Pricing Assumptions: 2025 US$70 WTI, US$12.50 WCS heavy differential, C$2 AECO, and 0.7 25 C$/US$ FX; 2026-29 US$70 WTI, US$12.50 WCS heavy differential, C$3 AECO, and 0.725 C$/US$ FX.

Financial and Operational Highlights

| | Three months ended December 31, | | Year ended December 31, | | | | | | | | | | | | | | ($ Thousands, unless otherwise noted) | 2024 | | 2023 | | 2024 | | | 2023 | | | | | | | | | CORPORATE CONSOLIDATED (1) | | | | | | | | | | | | | | | | | Petroleum and natural gas production (boe/d) (2) | | 37,236 | | | | 33,127 | | | | 36,815 | | | | 34,490 | | | Petroleum, natural gas and midstream sales | $ | 352,456 | | | $ | 315,929 | | | $ | 1,442,091 | | | $ | 1,268,525 | | | Operating Income (2) | $ | 155,022 | | | $ | 96,960 | | | $ | 620,092 | | | $ | 417,023 | | | Operating Income Net of Realized Hedging (2)(3) | $ | 153,119 | | | $ | 91,443 | | | $ | 613,630 | | | $ | 381,088 | | | Operating Netback ($/boe) (2) | $ | 45.53 | | | $ | 30.44 | | | $ | 46.14 | | | $ | 32.57 | | | Operating Netback Net of Realized Hedging ($/boe) (2)(3) | $ | 44.97 | | | $ | 28.71 | | | $ | 45.66 | | | $ | 29.76 | | | Capital expenditures | $ | 92,944 | | | $ | 38,752 | | | $ | 268,042 | | | $ | 139,832 | | | Cash flow from operating activities | $ | 158,677 | | | $ | 103,196 | | | $ | 557,541 | | | $ | 305,526 | | | per share - basic | $ | 0.30 | | | $ | 0.18 | | | $ | 1.02 | | | $ | 0.52 | | | Adjusted Funds Flow (2) | $ | 143,737 | | | $ | 81,830 | | | $ | 560,935 | | | $ | 295,236 | | | per share - basic | $ | 0.27 | | | $ | 0.14 | | | $ | 1.02 | | | $ | 0.51 | | | ATHABASCA (THERMAL OIL) | | | | | | | | | | | | | | | | | Bitumen production (bbl/d) (2) | | 33,849 | | | | 31,059 | | | | 33,505 | | | | 30,246 | | | Petroleum, natural gas and midstream sales | $ | 346,716 | | | $ | 309,078 | | | $ | 1,419,670 | | | $ | 1,204,245 | | | Operating Income (2) | $ | 143,246 | | | $ | 92,199 | | | $ | 569,083 | | | $ | 370,732 | | | Operating Netback ($/bbl) (2) | $ | 46.30 | | | $ | 30.78 | | | $ | 46.54 | | | $ | 32.93 | | | Capital expenditures | $ | 74,268 | | | $ | 29,371 | | | $ | 194,902 | | | $ | 118,975 | | | Adjusted Funds Flow (2) | $ | 133,398 | | | | | $ | 516,612 | | | | | | | | | Free Cash Flow (2) | $ | 59,130 | | | | | $ | 321,710 | | | | | | | | | DUVERNAY ENERGY (1) | | | | | | | | | | | | | | | | | Petroleum and natural gas production (boe/d) (2) | | 3,387 | | | | 2,068 | | | | 3,310 | | | | 4,244 | | | Percentage Liquids (%) (2) | 75 | % | | 71 | % | | 76 | % | | 58 | % | | | | | | Petroleum, natural gas and midstream sales | $ | 20,179 | | | $ | 12,659 | | | $ | 83,194 | | | $ | 91,062 | | | Operating Income (2) | $ | 11,776 | | | $ | 4,761 | | | $ | 51,009 | | | $ | 46,291 | | | Operating Netback ($/boe) (2) | $ | 37.79 | | | $ | 25.02 | | | $ | 42.10 | | | $ | 29.89 | | | Capital expenditures | $ | 18,676 | | | $ | 9,381 | | | $ | 73,140 | | | $ | 20,857 | | | Adjusted Funds Flow (2) | $ | 10,339 | | | | | $ | 44,323 | | | | | | | | | Free Cash Flow (2) | $ | (8,337 | ) | | | | $ | (28,817 | ) | | | | | | | | NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) | | | | | | | | | | | | | | | | | Net income (loss) and comprehensive income (loss) (4) | $ | 264,336 | | | $ | 27,506 | | | $ | 467,743 | | | $ | (51,220 | ) | | per share - basic (4) | $ | 0.50 | | | $ | 0.05 | | | $ | 0.85 | | | $ | (0.09 | ) | | per share - diluted (4) | $ | 0.50 | | | $ | 0.03 | | | $ | 0.85 | | | $ | (0.09 | ) | | COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | | Weighted average shares outstanding - basic | | 526,233,362 | | | | 574,412,564 | | | | 547,795,407 | | | | 583,757,575 | | | Weighted average shares outstanding - diluted | | 530,796,068 | | | | 588,498,448 | | | | 553,382,675 | | | | 583,757,575 | |

| | | | December 31, | | December 31, | | | | | | As at ($ Thousands) | | | 2024 | | 2023 | | | | | | LIQUIDITY AND BALANCE SHEET | | | | | | | | | | | Cash and cash equivalents | | | $ | 344,836 | | | $ | 343,309 | | | Available credit facilities (5) | | | $ | 136,324 | | | $ | 85,488 | | | Face value of term debt (6) | | | $ | 200,000 | | | $ | 207,648 | |

(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 “Advisories and Other Guidance” section within this News Release for additional information on Non-GAAP Financial Measures and production disclosure. (3) Includes realized commodity risk management loss of $1.9 million and $6.5 million for the three months and year ended December 31, 2024 (three months and year ended December 31, 2023 – loss of $5.5 million and $35.9 million). (4) Net income (loss) and comprehensive income (loss) per share amounts are based on net income (loss) and comprehensive income (loss) attributable to shareholders of the Parent Company. In the calculation of diluted earnings per share for the three months ended December 31, 2023 earnings were reduced by $11.3 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. (6) The face value of the term debt at December 31, 2023 was US$157.0 million translated into Canadian dollars at the December 31, 2023 exchange rate of US$1.00 = C$1.3226.

Athabasca (Thermal Oil) Year-end 2024 Highlights and Operations Update

Production: Bitumen production averaged 33,505 bbl/d in 2024 representing 11% growth year over year (18% per share) supported by the Leismer facility expansion mid-year and Hangingstone’s resilient production base. Record Cash Flow: Adjusted Funds Flow of $517 million with an Operating Netback of $46.54/bbl. Operating Income of $569 million. Capital Program: $195 million of capital expenditures in 2024 focused on expansion projects at Leismer and sustaining operations at Hangingstone. Free Cash Flow: $322 million of Free Cash Flow supporting 100% return of capital commitment.

Leismer

Bitumen production for 2024 averaged 26,103 bbl/d, up 16% year over year (18% per share).

In Q4 2024, the Company completed drilling six extended redrills on Pad L1 and four well pairs at Pad L10. The redrills were placed onstream in February and support production of ~28,000 bbl/d. Steaming of the Pad L10 well pairs is expected to start in April with first production mid-year. Another six well pairs will be drilled in H2 2025.

Activity at Leismer continues to be focused on advancing progressive growth to 40,000 bbl/d by the end of 2027. The project cost is estimated at $300 million generating a capital efficiency of approximately $25,000/bbl/d. The $300 million includes an estimated $190 million for facility capital (majority spread over 2025 and 2026) and an estimated $110 million for growth wells. To date the Company has procured ~80% of the project and remains on budget and on schedule with the original sanction plans announced in July 2024. This winter the Company completed regional infrastructure to Pad L10 and L11 including lease site construction, delineation drilling and pipeline looping. Major facility equipment has been purchased and the Company is preparing to install two previously acquired steam generators in 2027.

Leismer is forecasted to remain pre-payout from a crown royalty perspective until late 2027 3 .

Hangingstone

Bitumen production for 2024 averaged 7,402 bbl/d and experienced no decline during the year. Non-condensable gas co-injection has aided in pressure support and reduced energy usage. Hangingstone’s steam oil ratio averaged 3.4 for 2024.

At Hangingstone two extended reach sustaining well pairs (~1,400 meter average laterals) were drilled in 2024. These wells commenced steaming in December and will be placed on production in March. These well pairs are expected to enhance the current production level and support base production long term.

Hangingstone continues to deliver meaningful cash flow contributions with minimal capital to the Company and also has a pre-payout crown royalty structure to beyond 2030 3 .

Corner

The Company’s Corner asset is a large de-risked top-tier oil sands asset adjacent to Leismer with 351 million barrels of 2P reserves and 520 million barrels of Contingent Resource (Best Estimate Unrisked). There are over 300 delineation wells and ~80% seismic coverage with reservoir qualities similar or better than Leismer. The asset has a 40,000 bbl/d regulatory approval for development with the existing pipeline corridor passing through the Corner lease. The Company is updating its development plans and is finalizing facility cost estimates, including modular optionality. Athabasca intends to explore external funding options and does not plan to fund an expansion utilizing existing cash flow or balance sheet resources.

Duvernay Energy Corporation Year-end 2024 Highlights and Operations Update

Production: Production averaged 3,310 boe/d (76% Liquids) in 2024, supported by two pads (5 gross, 2.9 net wells) placed on production. Cash Flow: Adjusted Funds Flow of $44 million in 2024 with an Operating Netback of $42.10/boe. Operating Income was $51 million in 2024. DEC has no long-term debt and ended the year with a cash position of $26 million. Capital Program: $73 million of capital, fully funded within cash flow and cash on hand in DEC.

Production from wells drilled in 2024 continue to validate DEC’s type curve expectations. The five new wells placed on production have average IP30’s of ~1,200 boe/d per well (86% liquids) and IP90s of ~940 boe/d (86% Liquids) per well.

DEC drilled a three-well 100% working interest pad at 4-18-64-16W5 in Q4 2024. The wells were cased with average laterals of ~4,100 meters per well. This operated pad of wells is expected to be completed post-breakup in 2025. Winter activity has been focused on strategic gathering system investments connecting its newly operated assets with its existing operated infrastructure on the joint venture acreage supporting near-term development plans. DEC has secured a regional term water license and is commencing water sourcing in advance of the completion activities this summer.

Marketing Access Strategy and Resilience to United States (“US”) Trade Tariffs

Long Term Market Access: Athabasca has diversified its long term end market access which includes ~7,200 bbl/d of capacity on the Keystone pipeline by 2028, providing direct exposure to the US Gulf Coast. The Company has recently contracted, through an intermediary, 10,000 bbl/d of capacity on the Enbridge Express system, providing capacity to PADD II with no associated balance sheet commitments. The start-up of the Trans Mountain pipeline expansion has provided excess egress capacity out of Canada, driving tighter and less volatile WCS heavy differentials. Industry market access is expected to be further supported by expansions on the Enbridge and Trans Mountain Pipeline systems along with the possible revival of new pipeline projects. Athabasca is Resilient: The Company is well positioned to withstand macro volatility including proposed US Trade Tariffs with operational flexibility, financial durability and a robust cash flow outlook. Athabasca’s capital program is designed to provide flexible growth at Leismer and DEC has no near-term land expiries with flexible development plans. The Company’s balance sheet is in a $123 million Net Cash position with tenure on Canadian denominated term debt until 2029. Every $0.01 change in the Canada/US exchange rate is ~$10 million in annual Adjusted Funds Flow, and a weakened Canadian dollar would help cushion the impact that any potential US tariffs may have on commodity pricing.

Differentiated Long-life Reserves 1

Strong Reserve Growth: 22% increase year over year in 2P reserve value to $6.4 billion NPV10 2 ($12.44 per share, 35% increase) and 21% increase in 1P reserves to $3.8 billion 2 ($7.28 per share, 34% increase). Athabasca maintains a deep inventory with a ~30 year 1P and ~90 year 2P reserve life. Massive Resource Base: 1.3 billion boe of 2P reserves, anchored by 1.2 billion barrels of 2P Thermal Reserves, plus an additional ~1 billion barrels of Contingent Resources (best estimate). Duvernay Energy: Significant reserve additions from ~46,000 acres of 100% working interest land, driving a 128% year over year increase in 2P reserve value to $614 million NPV10 2 .

Athabasca’s independent reserves evaluator, McDaniel & Associates Consultants Ltd. (“McDaniel”), prepared the year-end reserves evaluation effective December 31, 2024. Reserves are reported on a consolidated basis and reflecting gross reserves and financial metrics before taking into account Athabasca’s 70% equity interest in Duvernay Energy.

| | Duvernay Energy 1 | Thermal Oil | Corporate | | | | | | | | | | | | | | | | | | | | | | | 2023 | | 2024 | | | | 2023 | | | | 2024 | | | | 2023 | | | | 2024 | | | | | | Reserves (mmboe) | | | | | | | | | | | | | | | | | | | | | | | | | Proved Developed Producing | | 4 | | | | 6 | | | | 77 | | | | 74 | | | | 82 | | | | 80 | | | Total Proved | | 11 | | | | 41 | | | | 404 | | | | 404 | | | | 415 | | | | 445 | | | Proved Plus Probable | | 27 | | | | 73 | | | | 1,216 | | | | 1,209 | | | | 1,243 | | | | 1,282 | | | | | | | | | | | | | | | | | | | | | | | | | | | | NPV10 BT ($million) 2 | | | | | | | | | | | | | | | | | | | | | | | | | Proved Developed Producing | $58 | | | $ 81 | | | $1,713 | | | $ 1,749 | | | $1,771 | | | $ 1,830 | | | | | | | | | Total Proved | $142 | | | $ 345 | | | $2,969 | | | $ 3,421 | | | $3,111 | | | $ 3,766 | | | | | | | | | Proved Plus Probable | $269 | | | $ 614 | | | $5,011 | | | $ 5,824 | | | $5,280 | | | $ 6,438 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |