Athabasca Oil Announces 2025 Second Quarter Results Highlighted by Strong Operational Results, Continued Share Buybacks and a Pristine Financial Position
CALGARY, Alberta, July 24, 2025 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX:ATH) ("Athabasca" or the "Company") is pleased to report its second quarter results marked by strong operational performance, consistent financial results and execution on return of capital commitments. With low corporate break-evens, differentiated long-life assets and a pristine balance sheet, the Company is well positioned to advance its strategic priorities.
Q2 2025 Consolidated Corporate Results
Production: Average production of 39,088 boe/d (98% Liquids), representing 4% (15% per share) growth year-over-year.
Cash Flow: Adjusted Funds Flow of $128 million ($0.25 per share). Cash Flow from Operating Activities of $101 million. Free Cash Flow of $66 million from Athabasca (Thermal Oil).
Capital Program: $73 million total capital expenditures including $54 million at Leismer to support the 40,000 bbl/d phased growth project.
Shareholder Returns: Purchased 24 million shares through its buy-back program year-to-date. The Company is committed to returning 100% of Free Cash Flow (Thermal Oil) to shareholders in 2025 and has completed ~$600 million in share buybacks since March 31, 2023, reducing its fully diluted share count by 21%.
Operations Highlights
Leismer: Production currently ~28,000 bbl/d (June 2025) with four sustaining well pairs expected to be placed on production through the balance of the year. The progressive growth project remains on time and on budget. The Company expects production to stay flat until the next growth plateau of 32,000 bbl/d in H2 2026.
Hangingstone: Production currently ~8,900 bbl/d (June 2025) following the start-up of two extended reach well pairs which are outperforming management's expectations. The asset continues to deliver meaningful free cash flow generation.
Duvernay Energy ("DEC"): A four well pad (30% working interest) with ~5,000 meter laterals was completed in mid July and will be placed on production in August. Completion operations are expected to commence on a three well pad (100% working interest) in September. DEC is positioned for strong operational momentum into year end with an exit target of ~6,000 boe/d.
Resilient Producer
Pristine Financial Position: The Company has a Net Cash position of $119 million, Liquidity of $437 million (including $304 million cash) and a long-dated maturity of 2029 on its term debt. The Company also has $2.2 billion of tax pools (~80% high-value and immediately deductible).
Low Break-evens: Long-life, low decline assets afford Athabasca with a sustaining capital advantage. The Company's 2025 Thermal Oil capital program which includes growth initiatives is fully funded within cash flow below US$50/bbl WTI. Long term sustaining capital investment is estimated at ~C$8/bbl (five‐year annual average) to hold production flat.
2025 Corporate Guidance
Consolidated Production Outlook: The Company anticipates production at the upper end of guidance of 37,500, 39,500 boe/d with an exit rate of ~41,000 boe/d. Thermal Oil production is trending at the upper end of its prior guidance of 33,500, 35,500 bbl/d. Duvernay Energy is expected to average ~4,000 boe/d with an exit target of ~6,000 boe/d following the tie-in of two multi-well pads.
Thermal Capital: The forecast capital budget for Thermal oil is unchanged at ~$250 million, including sustaining capital and the Leismer expansion project. This $300 million expansion project (over three years) is highly economic (~$25,000/bbl/d capital efficiency) and provides flexibility with interim growth targets to ~32,000 bbl/d in H2 2026 and ~35,000 bbl/d in H1 2027 before achieving the regulatory approved 40,000 bbl/d capacity at the end of 2027. Athabasca's Thermal Oil capital projects are flexible, highly economic and have phased optionality on timing based on the macroeconomic environment. By year-end 2025, the Company anticipates being ~50% complete of total capital exposure for the expansion project.
Duvernay Energy Corporation Capital: The 2025 capital program of ~$75 million will drive production momentum in H2 2025. The capital program in DEC is flexible and designed to be self-funded. The Company has a deep inventory of ~444 gross future drilling locations with no near-term land expiries.
Free Cash Flow Focus: The Company forecasts consolidated Adjusted Funds Flow between $525 - $550 million1, including $475 - $500 million from its Thermal Oil assets. 2025 Thermal Oil Free Cash Flow is forecasted at ~$250 million and is planned to be returned to shareholders through share buybacks. 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.
Corporate Consolidated Strategy
Value Creation: The Company's Thermal Oil division provides a differentiated liquids weighted growth platform supported by financial resiliency to execute on return of capital initiatives. Athabasca's subsidiary company, Duvernay Energy Corporation, is designed to enhance value for Athabasca's shareholders by providing a clear path for self-funded production and cash flow growth in the Kaybob Duvernay resource play. Athabasca (Thermal Oil) and DEC have independent strategies and capital allocation frameworks.
Steadfast Focus on Cash Flow Per Share Growth: Athabasca's disciplined capital allocation framework is designed to unlock shareholder value by prioritizing multi-year cash flow per share growth. The Company forecasts ~20% compounded annual cash flow per share growth between 2025-2029 driven by investing in attractive capital projects and prioritizing share buybacks with 100% of Free Cash Flow. The Company sees significant intrinsic value not reflected in the current share price and intends to remain active with its share buyback strategy.
Athabasca (Thermal Oil) Strategy
Large Resource Base: Athabasca's top-tier assets underpin a strong Free Cash Flow outlook with low sustaining capital requirements. The long life, low decline asset base includes ~1.2 billion barrels of Proved plus Probable reserves and ~1 billion barrels of Contingent Resource.
Strong Financial Position: Prudent balance sheet management is a core tenet of Athabasca's strategy. The Company has a Net Cash position of $119 million, Liquidity of $437 million (including $304 million cash) and a long-dated maturity of 2029 on its term debt.
Leismer Progressive Growth: This $300 million expansion project (over three years) is highly economic (~$25,000/bbl/d capital efficiency) and provides flexibility with interim growth targets to ~32,000 bbl/d in H2 2026 and ~35,000 bbl/d in H1 2027 before achieving the regulatory approved 40,000 bbl/d capacity at the end of 2027. On completion of the expansion project, the Company can maintain Leismer at 40,000 bbl/d for approximately fifty years (Proved plus Probable Reserves).
Sustaining Hangingstone: The Hangingstone asset is very competitive and continues to deliver meaningful cash flow contributions to the Company. The objective is to sustain production and maintain competitive netbacks ($36.51/bbl H1 2025 Operating Netback).
Corner, Future Optionality: The Company's Corner asset is a large de-risked oil sands asset adjacent to Leismer with 351 million barrels of Proved plus Probable reserves and 520 million barrels Contingent Resource (Best Estimate Unrisked). There are over 300 delineation wells and ~80% seismic coverage, with reservoir qualities similar to 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 has updated its development plans and is finalizing facility cost estimates, with a focus on capital efficient modular design.
Significant Multi-Year Free Cash Flow: Inclusive of the progressive growth at Leismer, Athabasca (Thermal Oil) expects to generate in excess of $1.8 billion of Free Cash Flow1 during the five-year time frame of 2025-29. Free Cash Flow will continue to support the Company's return of capital initiatives.
Sound Heavy Oil Fundamentals: Canadian heavy oil markets remain strong supported by the Trans Mountain Expansion pipeline and sustained global refining demand. This has resulted in tighter and less volatile WCS heavy differentials with August index pricing at ~US$10/bbl. Athabasca is a direct beneficiary of structurally tighter differentials that are forecasted to hold in the coming years.
Thermal Oil Royalty Advantage: Athabasca has significant unrecovered capital balances on its Thermal Oil Assets that ensure a low Crown royalty framework (~6%1). Leismer is forecasted to remain pre-payout until late 20271 and Hangingstone is forecasted to remain pre-payout beyond 20301.
Tax Free Horizon Advantage: Athabasca (Thermal Oil) has $2.2 billion of valuable tax pools and does not forecast paying cash taxes this decade.
Duvernay Energy Strategy
Accelerating Value: DEC is an operated, private subsidiary of Athabasca (owned 70% by Athabasca and 30% by Cenovus Energy). DEC accelerates value realization for Athabasca's shareholders by providing a clear path for self-funded production and cash flow growth without compromising Athabasca's capacity to fund its Thermal Oil assets or its return of capital strategy.
Kaybob Duvernay Focused: Exposure to ~200,000 gross acres in the liquids rich and oil windows with ~444 gross future well locations, including ~46,000 gross acres with 100% working interest.
Self-Funded Growth: Near-term activity will be funded within Adjusted Funds Flow, initial seed capital and the DEC credit facility. The Company has growth potential to in excess of ~20,000 boe/d (75% Liquids) by the late 2020s1.
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 Pricing assumptions: H1 2025 actualized and US$65 WTI, US$12.50 WCS heavy differential, C$2 AECO, and 0.725 C$/US$ FX for H2 2025. 2026+ 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 June 30,
Six months ended June 30,
($ Thousands, unless otherwise noted)
2025
2024
2025
2024
CORPORATE CONSOLIDATED(1)
Petroleum and natural gas production (boe/d)(2)
39,088
37,621
38,404
35,546
Petroleum, natural gas and midstream sales
$
360,070
$
401,738
$
727,914
$
712,854
Operating Income(2)
$
141,707
$
179,751
$
287,297
$
284,886
Operating Income Net of Realized Hedging(2)(3)
$
142,101
$
178,176
$
286,048
$
284,756
Operating Netback ($/boe)(2)
$
38.81
$
52.46
$
41.30
$
44.77
Operating Netback Net of Realized Hedging ($/boe)(2)(3)
$
38.92
$
52.00
$
41.12
$
44.75
Capital expenditures
$
73,066
$
48,453
$
136,399
$
124,464
Cash flow from operating activities
$
101,432
$
135,083
$
224,785
$
211,721
per share - basic
$
0.20
$
0.24
$
0.44
$
0.38
Adjusted Funds Flow(2)
$
127,591
$
165,746
$
257,266
$
253,518
per share - basic
$
0.25
$
0.30
$
0.51
$
0.45
ATHABASCA (THERMAL OIL)
Bitumen production (bbl/d)(2)
36,476
33,765
35,613
32,651
Petroleum, natural gas and midstream sales
$
355,160
$
395,279
$
717,535
$
700,320
Operating Income(2)
$
135,803
$
161,694
$
271,119
$
262,143
Operating Netback ($/bbl)(2)
$
39.79
$
52.59
$
42.02
$
44.91
Capital expenditures
$
56,110
$
34,084
$
106,486
$
76,203
Adjusted Funds Flow(2)
$
122,097
$
149,413
$
243,450
$
233,126
Free Cash Flow(2)
$
65,987
$
115,329
$
136,964
$
156,923
DUVERNAY ENERGY(1)
Petroleum and natural gas production (boe/d)(2)
2,612
3,856
2,791
2,895
Percentage Liquids (%)(2)
72
%
80
%
73
%
77
%
Petroleum, natural gas and midstream sales
$
13,526
$
26,749
$
31,145
$
38,287
Operating Income(2)
$
5,904
$
18,057
