Mr. Robert Broen reports

ATHABASCA OIL ANNOUNCES 2023 FIRST QUARTER RESULTS AND EXECUTION ON ITS RETURN OF CAPITAL COMMITMENT THROUGH INAUGURAL SHARE REPURCHASES

Athabasca Oil Corp. has released its first quarter results showcasing operational momentum at its cornerstone Leismer asset, continued debt reduction and execution on its return of capital commitment through inaugural share repurchases. Athabasca is uniquely positioned as a low leveraged company generating significant Free Cash Flow through its low-decline, oil weighted asset base.

Q1 2023 and Recent Corporate Highlights

Production: 34,683 barrels of oil equivalent per day (93% Liquids) consisting of 29,179 barrels per day in Thermal Oil and 5,504 barrels of oil equivalent per day in Light Oil. The company is maintaining annual guidance of 34,500 - 36,000 barrels of oil equivalent per day as Leismer production ramps up throughout the remainder of 2023.

Capital Program: $26 million focused on Leismer's expansion project in Thermal Oil. Capital guidance for the year remains at $145 million ($120 million Thermal Oil and $25 million Light Oil).

Leismer: Steaming commenced on five new well pairs, with production expected to ramp up to an exit rate of 24,000 barrels per day. An expansion project is underway, driving growth to 28,000 barrels per day by mid-2024, within existing capital guidance at a competitive capital efficiency of $14,000/barrels per day. This project is expected to drive margin expansion of approximately $5/bbl at Leismer through increased operating scale.

Operating Income: Operating Income of $57 million consisting of $42 million ($14.52/bbl) from Thermal Oil and $15 million ($30.35/boe) from Light Oil. Netbacks in the Thermal Oil division were impacted by wide Western Canadian Select ("WCS") heavy differentials following short-term headwinds, including the Keystone pipeline leak in December 2022. WCS differentials have tightened significantly to approximately US$15 currently compared with US$24.77 in the first quarter. Athabasca expects differentials to improve further into 2024 with the start-up of the Trans Mountain pipeline expansion.

Cash Flow: Cash Flow from Operating Activities of $21 million and Adjusted Funds Flow of ($9) million were impacted by $44 million of non-recurring financial adjustments. Deferred hedging premiums incurred as part of the Fall 2021 debt refinancing transaction have now fully expired. Additionally, as part of its efforts to maximize shareholder returns the company elected to cash settle a portion of its share based compensation, reducing dilution in advance of the share buyback program which commenced in April. The company's Thermal Oil assets are estimated to remain in a pre-payout Crown royalty structure until the end of 2027 and Athabasca is forecasting approximately $1 Billion in Free Cash Flow1 generation over a three year timeframe of 2023-25.

Balance Sheet: Opportunistically redeemed $18 million (US$13 million) in Term Debt and achieved the lowest level of total debt in corporate history of $219 million (US$162 million). Liquidity of $261 million, including cash of $173 million.

Return of Capital through Share Repurchases: The share buyback program commenced in April and to date the company has repurchased for cancellation 6.2 million common shares for total consideration of $20 million.

Resolution of Legacy Tax Appeal: Subsequent to the quarter, Athabasca has successfully appealed a 2012 tax reassessment and anticipates the return of a $12.6 million deposit in the near term. Athabasca has $3.1 Billion of corporate tax pools and does not forecast paying taxes for approximately seven years.

Strategic Update and Corporate Guidance

Return of Capital Commitment: Athabasca is committed to allocating a minimum of 75% of Excess Cash Flow (Adjusted Funds Flow less Sustaining Capital) in 2023 to shareholders through share buybacks. The buyback program commenced in April and to date the company has repurchased for cancellation 6.2 million common shares for total consideration of $20 million. Additional Excess Cash Flow allocation will be commodity price dependent and could include additional share repurchases dependent on valuation, further debt reduction or high return growth projects.

Capital Guidance: The company is executing a approximately $145 million capital program this year ($120 million Thermal and $25 million Light Oil) with activity focused on advancing the expansion project at Leismer.

Production Guidance. Overall production is expected to grow by 5 - 7% through expansion plans at Leismer and modest investment in the Light Oil assets. 2023 Guidance remains unchanged at 34,500 - 36,000 barrels of oil equivalent per day (93% Liquids). The portfolio of long life assets underpin a low corporate decline of approximately 5% annually.

Capital Efficient Growth at Leismer: Leismer is expected to exit 2023 with production of approximately 24,000 barrels per day. A facility expansion and additional drilling will support sustainable growth to approximately 28,000 barrels per day by mid-2024 at a competitive capital efficiency of approximately $14,000/barrels per day. This project is on-track with previous guidance, will not impact the return of capital strategy and is expected to bolster future Free Cash Flow generation through enhanced margins.

Managing for Free Cash Flow: Athabasca is positioned for continued margin growth in 2024 with the Leismer expansion and expected narrower WCS heavy differentials following the expected start-up of the Trans Mountain Pipeline Expansion project in 2024. The company expects to generate approximately $1 Billion in Free Cash Flow1 during the three-year timeframe of 2023-25.

Thermal Oil Differentiation: Strong margins and Free Cash Flow are supported by a Thermal Oil pre-payout Crown royalty structure, with royalty rates between 5 - 9%. Leismer is estimated to remain pre-payout until the end of 2027 and Hangingstone well into the 2030s (US$85 WTI, US$12.50 WCS differential). This results in maximum cash flow at current commodity prices and creates a significant advantage over the majority of industry oil sands projects.

Excellent Exposure to Commodity Upside: Athabasca has excellent exposure to upside in commodity prices with 25% of forecasted 2023 production volumes hedged through collars, providing upside to approximately US$106 WTI. Every $5/bbl WTI change impacts annual cash flow by approximately $50 million (unhedged) and every US$5/bbl WCS differential change impacts annual cash flow by approximately $80 million (unhedged).

Alberta Wildfire Update

Minimal Impact: The company's Light Oil operations were temporarily affected by the Alberta wildfires. As a precautionary measure Athabasca shut-in two of its facilities last weekend which are currently resuming operations with no damage to well sites or infrastructure. The company estimates approximately 300 barrels of oil equivalent per day of current downtime and anticipates minimal impact to its annual corporate production guidance. There has been no impact to the company's Thermal Oil operations.

Operations Update

Thermal Oil

Bitumen production for the first quarter of 2023 averaged 29,179 barrels per day. The Thermal Oil division generated Operating Income of $41.5 million ($14.52/bbl) during the period with capital expenditures of $22.8 million, primarily related to sustaining operations at Leismer.

Leismer

In the first quarter of 2023, the company drilled two observation wells at L8 South and a disposal well. Steam circulation is underway on the five additional new well pairs at Pad L8 with first production expected mid-year. Leismer is expected to exit 2023 with production of approximately 24,000 barrels per day with contribution of approximately 6,000 barrels per day of stable production from the new well pairs.

A facility expansion project has been sanctioned and will support sustainable growth up to approximately 28,000 barrels per day by mid-2024. This production level can be held with modest sustaining capital (approximately $6/bbl) for many years into the future. Capital scope in 2023 includes the expansion project along with drilling four additional sustaining well pairs at Pad L8 and four infill wells at Pad L7. The company anticipates a drilling rig to commence operations in June. The company is able to leverage existing excess steam capacity and has been proactive in acquiring long lead equipment. The project is budgeted at a competitive capital efficiency of approximately $14,000/barrels per day and is expected to enhance margins by approximately $5/bbl from current levels through increased operating scale.

Leismer has a significant unrecovered capital balance of approximately $1.4 billion (2022 year-end) which ensures a low Crown royalty framework as the asset is estimated to remain pre-payout until the end of 2027 (US$85 WTI, US$12.50 WCS differential).

Hangingstone

Non-condensable gas co-injection has aided in pressure support and reduced energy usage. Hangingstone's steam oil ratio averaged 3.6x year to date. The company is preparing for operational readiness to drill sustaining well pairs in 2024 and beyond to maintain production levels.

Light Oil

Production for the first quarter of 2023 averaged 5,504 barrels of oil equivalent per day (57% Liquids). The Light Oil division generated Operating Income of $15.0 million ($30.35/boe) during the period with capital expenditures of $1.9 million.

Three Duvernay wells at Two Creeks were completed early in 2022 with IP180's averaging approximately 500 barrels of oil equivalent per day (94% Liquids). In the oil window at Kaybob East and Two Creeks the company has extended production history from 27 wells de-risking an inventory of 290 gross future locations. The wells have consistently supported the company's type curve expectations with IP365's averaging approximately 550 barrels of oil equivalent per day per well, approximately 85% Liquids (latest 12 wells since 2020), demonstrating the significant potential of the asset.

The Light Oil land position has no near-term expiries and is ready for future development with approximately 850 gross Montney and Duvernay locations.

Light Oil operations were temporarily affected by the Alberta wildfires. As a precautionary measure Athabasca shut-in two of its facilities last weekend which are currently resuming operations with no damage to well sites or infrastructure. The company estimates approximately 300 barrels of oil equivalent per day of current downtime and anticipates minimal impact to its annual corporate production guidance.

Business Environment & Outlook

Global oil benchmarks have been supported by improving demand and structural supply deficits. The war in Ukraine has amplified the emphasis on energy security and sanctions continue to alter energy flows across the globe. Athabasca maintains a constructive outlook on oil prices supported by years of industry underinvestment and demand trends moving higher led by China emerging from COVID restrictions.

Canadian WCS heavy differentials temporarily widened through the latter half of 2022 and early in 2023 as a result of unprecedented US Strategic Petroleum Reserve ("SPR") heavy barrel releases, TC Energy's Keystone pipeline leak in December 2022, the war in Ukraine impacting global heavy crude oil flows and significant unplanned US refinery outages. Pricing has significantly improved as these transitory headwinds have eased. Differentials are currently trading at approximately US$15 compared with an average of US$24.77 in the first quarter of 2023. The supply-demand outlook for heavy barrels is expected to be supported by additional OPEC+ production cuts, the start-up of the Trans Mountain pipeline expansion (590,000 barrels per day) and the start-up of new global heavy oil refining capacity. These factors are expected to strengthen WCS prices into the back half of 2023 and 2024.

ESG Annual Report

Athabasca is proud to publish its third ESG report, aligning to leading ESG standards and frameworks including Global Reporting Initiative ("GRI"), Sustainability Accounting Standards Board ("SASB") and Task Force for Climate Disclosure ("TCFD") guidelines. The report is available on the company's website (https://www.atha.com/esg.html) and SEDAR (https://www.sedar.com).

The company is on track to achieve its stated target of a 30% reduction in emissions intensity by 2025. Athabasca has also partnered with Entropy Inc. to implement carbon capture and storage ("CCS") at Leismer, using Entropy's proprietary CCS technology. This project is expected to be sanctioned once government fiscal and regulatory policy for CCS projects are fully in place.

The company's safety culture is deeply embedded and total recordable injury frequency (TRIF) averaged 0.08 in 2022, well below our target of 0.5 and building on our excellent safety record.

The ESG strategy and performance is reviewed, considered and fully integrated at the Board level.

Annual General Meeting

Athabasca will be hosting a virtual Annual General Meeting ("Meeting") on Thursday, May 11, 2023 at 9:00 am (MT). Ms. Marnie Smith will stand for election as a new independent director. Ms. Smith is a Managing Director at Russell Reynolds Associates, a global organizational consulting firm, where she leads the Western Canadian team and Canadian energy platform. Prior thereto, she served as a Senior Client Partner with Korn Ferry and as Managing Director & Head of Canadian Energy at Macquarie Group.

Mr. Thomas Ebbern is retiring from the Board after approximately five years of service and valuable contributions as a member of the Compensation & Governance and Audit Committees. The Board would like to thank Mr. Ebbern for his longstanding commitment to the company and its shareholders.

Shareholders and guests can listen to the Meeting via live webcast with details available at: https://www.atha.com/investors/presentation-events.html

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.

We seek Safe Harbor.