Athabasca Oil Corporation Announces Sale of Non-Core Light Oil Assets for $160 Million; Retains Strategic Duvernay Assets with 500 Future Drilling Locations

CALGARY, Alberta, July 31, 2023 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to announce that it has entered into a definitive agreement to sell non-core Light Oil assets for total cash proceeds of $160 million (the “Transaction”). The Transaction high-grades the Company’s deep resource portfolio, crystallizes value from a non-core asset at an attractive price and bolsters the Company’s strong financial position.

Transaction Overview

Athabasca has agreed to sell its 70% operated working interest in Placid targeting the Montney, its 30% non-operated working interest in Saxon and Simonette targeting the Duvernay and other associated non-core Placid Montney assets to a private company for $160 million in cash, prior to adjustments. During the first half of 2023, these assets collectively averaged ~3,000 boe/d (~45% Liquids).

The assets being sold generated significant Free Cash Flow following COVID, supporting Athabasca’s deleveraging goals. The Transaction is being completed at attractive and accretive metrics, and crystallizes the value of the assets that have become non-core due to the smaller scale, lower liquids content and lower relative returns versus core assets within the Company’s portfolio. The 2023 forecasted Transaction metrics are:

•	Transaction Value / Net Operating Income1:	7.9x Net Operating Income
•	Transaction Value / Production2:	$54,700/boe/d
•	Transaction Value / Proved Reserves3:	$6.93/boe

The effective date of the Transaction will be March 1, 2023 and closing is expected late in the third quarter of 2023. The Transaction is subject to the satisfaction of customary conditions, including receipt of regulatory approvals under the Competition Act (Canada).

The Transaction further strengthens the Company’s balance sheet with an enviable pro forma Net Cash position of ~$90 million⁵. The Transaction is not anticipated to materially impact the Company’s growth ambitions and ~$1 billion⁴ forecasted Free Cash Flow outlook during the three-year time frame of 2023-25. The strong cash flow outlook is supported by ~$3.1 billion of corporate tax pools available, and the Company does not forecast paying taxes for approximately seven years⁵. Athabasca is committed to its return of capital plans to shareholders and also has a deep inventory of development options. The Company will provide updated corporate guidance on closing of the Transaction.