Athabasca Oil increases share buybacks amid strong cash flow

Athabasca Oil Corporation reported an average production of 39,599 barrels of oil equivalent per day in the third quarter, up 2% from the previous year. This performance generated adjusted funds flow of $129mn and free cash flow of $56mn from thermal oil operations. The Canadian company strengthened its capital return policy with 34 million shares repurchased since the beginning of the year, for a total of $192mn.

Targeted investments in Leismer and sustained financial discipline

Capital expenditures reached $96mn, including $61mn allocated to the Leismer site, where the expansion project to a 40,000 barrel-per-day capacity is underway. Athabasca expects to complete approximately 50% of the total $300mn investment by the end of 2025. The company continues to focus on capital allocation aimed at profitability, flexibility and cash generation, while maintaining a net cash position of $93mn and total liquidity of $466mn.

Mixed performance for Duvernay Energy Corporation

Subsidiary Duvernay Energy Corporation, 70% owned by Athabasca, produced 3,009 barrels of oil equivalent per day in the third quarter, with a liquids share of 75%. The activity generated negative cash flow of $23mn despite strong initial results from a newly drilled four-well pad in the Kaybob region. Athabasca expects DEC’s production to accelerate in the fourth quarter, with a year-end target of 5,500 to 6,000 barrels per day.

Unchanged 2025 outlook and price sensitivity

Athabasca maintains its full-year production guidance between 37,500 and 39,500 barrels of oil equivalent per day, with thermal oil contributing an expected average of 35,500 barrels per day. The 2025 capital investment plan remains unchanged at $250mn for thermal activities and $75mn for DEC. Each $1 change in West Texas Intermediate (WTI) crude prices affects annual adjusted funds flow by approximately $10mn, while a $1 change in the Western Canadian Select (WCS) differential impacts it by $17mn.

Focus on shareholder value creation

Athabasca expects more than 20% compound annual growth in cash flow per share between 2025 and 2029. This rate is expected to be supported by a mix of high-return projects and a full capital return policy, funded entirely by cash generated from thermal oil assets. Since March 2023, the company has returned approximately $675mn to shareholders through buybacks, maintaining an active strategy despite a valuation seen as below intrinsic value.