Athabasca Oil Corporation Achieves Record Outcomes and Advances Strategic Growth
Athabasca Oil Corporation has announced a significant achievement in its third-quarter results, demonstrating record Adjusted Funds Flow and Free Cash Flow, coupled with operational progress at its Leismer project. The company’s commitment to capital return is evident through substantial share repurchases, underlining its robust financial standing and substantial generation.
In the third quarter, the corporation reported a production rate of approximately 36,200 barrels of oil equivalent per day, with a 95% liquids composition. Its Thermal Oil operations contributed around 31,700 barrels per day, complemented by Light Oil’s production of about 4,500 barrels of oil equivalent per day. The Leismer project, a key asset in the company’s portfolio, achieved a record production of 24,232 barrels per day following the successful ramp-up of Pad L8M. This project is on a trajectory to reach 28,000 barrels per day by mid-2024, promising to enhance margins significantly.
Financially, the company has reported a Consolidated Operating Income of $168 million and a record Adjusted Funds Flow of $141 million. These figures are supported by robust heavy oil prices and an impressive operating netback of $50.84 per barrel, which includes $55.17 per barrel at Leismer. The capital program, totaling $33 million, has been strategically allocated to the Leismer expansion, contributing to a record Free Cash Flow of $108 million and underlining the company’s commitment to capital return.
Strategic divestitures have also been a part of the company’s recent activities, with the sale of non-core assets in Placid, Saxon, and Simonette for $160 million in cash. This move has fortified the balance sheet and contributed to a net cash position of $155 million at the quarter’s end, with robust liquidity of $425 million, including cash of $337 million. The company has effectively reduced its fully diluted share count by approximately 7% year to date, with $113 million spent on share buybacks since April.
Looking forward, the company is poised to deliver shareholder value through a robust multi-year cash flow per share growth. The asset base is well-positioned to support profitable liquids-weighted growth, with a financial resilience that is commendable. The company has outlined a capital program of roughly $145 million, with expected average production of around 34,500 barrels of oil equivalent per day. This projection accounts for the impact of the non-core asset disposition and recent growth at Leismer.
The strategic focus remains on capital-efficient growth at Leismer, with the expansion project set to significantly boost future Free Cash Flow through improved margins. The company is preparing for growth in 2024, anticipating advantages from the Trans Mountain pipeline expansion and narrower heavy oil differentials. With an estimated $1 billion in projected over the 2023-25 period, the company showcases strong performance and operational excellence.
The third-quarter results of Athabasca Oil Corporation paint a picture of a company not just reaching new financial and operational heights, but also strategically positioning itself for sustained growth and efficiency. As Athabasca forges ahead with its project advancements and asset optimization, it continues to stand out in its sector, delivering value through its disciplined approach and strategic endeavors.
Source link
