Athabasca Oil Corporation Halts 2020 Capital Program

CALGARY, Alberta – Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is taking swift action in response to the significant decline in global oil prices to bolster balance sheet strength and corporate resiliency, including a $30 million reduction to its 2020 capital program and proactively curtailing heavy oil production at Hangingstone.

$30 million Reduction to 2020 Capital Budget and Operations Update

Athabasca has immediately cancelled $30 million of capital expenditures, representing a 25% reduction from the previously announced 2020 budget. The revised $95 million budget primarily includes the completion of the winter program. The Company already had a minimal capital program in place with market uncertainty and has low capital requirements to sustain its liquids weighted production base.

The Company has completed the tie-in of 10 Placid Montney wells and intends to bring production on-stream in Q2 2020. The Kaybob Duvernay program is nearing completion with 16 wells expected to be placed on-stream in H1 2020. Athabasca’s working interest remains protected by the capital carry through Q1 2020 with no activity planned for the balance of the year.

In Thermal Oil, the Company has temporarily deferred long lead projects for Leismer. At Hangingstone, the Company has self-curtailed production by approximately 50% to maximize corporate funds flow and liquidity. The Company is making plans to defer the Hangingstone turnaround to 2021.

Athabasca expects 2020 annual production of 32,500 – 34,000 boe/d, which reflects a self-curtailment at Hangingstone for the balance of the year.

The Company has released all non-essential contract staff effective immediately and is also taking further actions to optimize operating costs in the near-term.

Balance Sheet and Risk Management

As at year-end 2019, Athabasca had liquidity of $340 million ($255 million cash equivalents & $85 million available credit facilities) providing business flexibility during commodity price volatility and market egress constraints. Athabasca’s existing high yield debt has term until February 2022 with no financial or maintenance covenants. The Company has a $120 million reserve based credit facility ($80 million undrawn) with a term out date of May 31, 2020, which has been routinely extended with bi-annual reviews, and has a current maturity date of May 31, 2021.

The Company’s risk management program will mitigate near term pricing volatility. The current 2020 hedge book has market to market gains of approximately $50 million (Mar. 19).

Athabasca intends to maintain maximum liquidity through this volatile macro environment.

COVID-19 Update

Athabasca has implemented its Business Continuity Plan in response to the global pandemic to ensure the safety of all staff and to mitigate potential risk to operations. The Company is following Alberta Health Guidelines as it manages its internal policies.

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 common shares trade on the TSX under the symbol “ATH”. For more information, visit www.atha.com.