Mr. Robert Broen reports

ATHABASCA OIL CORPORATION ANNOUNCES CLOSING OF NON-CORE LIGHT OIL ASSET SALE, REAFFIRMS 2023 GUIDANCE AND PROVIDES A RETURN OF CAPITAL UPDATE

Athabasca Oil Corp. has closed its previously announced sale of non-core light oil assets at Placid, Saxon and Simonette to a private company.

Transaction overview

Athabasca Oil has sold its 70-per-cent operated working interest in Placid targeting the Montney, its 30-per-cent 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 before closing adjustments. During the first half of 2023, these assets collectively averaged approximately 3,000 barrels of oil equivalent per day (approximately 45 per cent liquids). The deal closed on Sept. 14, 2023, with an effective date of March 1, 2023.

The transaction was completed at attractive and accretive metrics, and crystallizes the value of the assets that have become non-core due to smaller scale, lower liquids content and lower relative returns versus core assets within the company's portfolio.

The company's light oil division consists exclusively of the Duvernay in the greater Kaybob area with approximately 155,000 gross acres across Kaybob West, Kaybob North, Kaybob East and Two Creeks. The company is planning Duvernay activity that is expected to offset production from the transaction and support the company's multiyear free cash flow outlook. Athabasca Oil is uniquely positioned in the liquids-rich oil window of the play with a derisked inventory of approximately 500 gross wells.

Reaffirming 2023 guidance

Athabasca Oil expects its annual production to be within previous guidance of 34,500 to 36,000 boe/d. Strong performance of the company's assets year to date, including the recent ramp-up of the five new sustaining well pairs at Leismer, is anticipated to offset production associated with the transaction in the company's original guidance.

Athabasca Oil's strong balance sheet affords it significant flexibility for future capital allocation opportunities. The company is forecasting liquidity of approximately $415-million, inclusive of approximately $325-million of cash, at the end of September. The company anticipates releasing its third quarter 2023 results on Nov. 1 after market close and its 2024 budget guidance in December.

Return of capital update

Athabasca Oil is committed to executing on its 2023 return of capital commitment that will see a minimum of 75 per cent of excess cash flow (adjusted funds flow less sustaining capital) in 2023 returned to shareholders through share buybacks. Since April, the company has completed approximately $80-million in share buybacks (approximately 25 million shares at an average price of $3.19 per share).

About Athabasca Oil Corp.

Athabasca Oil 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 Oil's common shares trade on the Toronto Stock Exchange under the symbol ATH.

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