Athabasca Oil Stock

Athabasca Oil Corporation operates as an intermediate liquids weighted producer.

The company has a position in three of Alberta’s major resource plays, including the oil sands, Montney and Duvernay.

Divisions

The company operates through Light Oil and Thermal Oil divisions.

As of December 31, 2020, the company’s principal properties in the Light Oil division were in the Greater Placid area and in the Greater Kaybob area near the Town of Fox Creek in northwestern Alberta.

The Thermal Oil division includes various major project areas in the Athabasca region of northeastern Alberta and, as of December 31, 2020, its producing properties included its Leismer and Hangingstone Projects.

Light Oil division

Within its Light Oil division, the company produces light oil and liquids-rich natural gas from unconventional reservoirs. The company's principal development properties are located in the Greater Placid and Greater Kaybob areas. The company holds a 70% operated working interest in the Placid assets and a 30% non-operated interest in the Kaybob assets.

As of December 31, 2020, the company held approximately 242,000 net acres of petroleum and natural gas rights in its Light Oil division, which primarily included rights in the Duvernay and Montney formations. Production from the Light Oil division for the year ended December 31, 2020, averaged 9,738 barrels of oil equivalent per day.

The company sells all of its oil and condensate produced from the Light Oil division into the Pembina Pipeline system and receives Edmonton prices. Majority of the company’s natural gas is sent to Keyera Corp.’s Simonette Gas Plant where it is processed and sold into the TC Energy Pipeline and Alliance Pipeline systems. Natural gas liquids that are separated at this gas plant are transported through the Pembina Pipeline system and receive Edmonton prices. The company’s Kaybob assets are also connected to SemCAM’s Kaybob amalgamated gas plant.

Placid Assets

The company holds an operated 70% interest in the Placid assets, primarily targeting the development of the Montney Formation. As of December 31, 2020, the company held approximately 69,000 net acres in the Placid asset area.

McDaniel & Associates Consultants Ltd. (McDaniel) has assigned approximately 30 MMboe (million barrels of oil equivalent) of Proved Reserves and 49 MMboe of total proved plus probable reserves on a gross reserves basis to the company’s interests in the Placid asset area, as of December 31, 2020.

Kaybob Assets

The company holds a non-operated 30% interest in the Kaybob assets, primarily targeting the development of the Duvernay Formation. The Kaybob Carry Commitment was completed in 2020, parties would proceed on a go-forward as working interest partners.

As of December 31, 2020, the company held approximately 78,000 net acres in the Kaybob assets. McDaniel had assigned approximately 8 MMboe of proved reserves and 25 MMboe of proved plus probable reserves on a gross reserves basis to its interests in the Kaybob assets, as of December 31, 2020.

Thermal Oil division

The company’s Thermal Oil division consists of two operating oil sands steam assisted gravity drainage (SAGD) projects and a major resource base of exploration areas in the Athabasca region of northeastern Alberta.

As of December 31, 2020, the company’s Thermal Oil division held approximately 608,000 net acres of oil sands rights in the Athabasca region of northeastern Alberta. Sales from the Thermal Oil division, for the year ended December 31, 2020, averaged 22,745 barrels per day (bbl/d) of bitumen.

Leismer Corner Assets

In 2017, the company acquired the Leismer assets, which include approximately 78,000 net acres of oil sands leases and an approximately 100% working interest in the operating Leismer Project. In the same transaction, the company acquired approximately 44,000 net acres of oil sands leases in the delineated Corner asset area. Collectively, the company calls these assets the Leismer Corner assets and they are located in northeastern Alberta (‘Leismer Corner Assets’).

McDaniel has assigned approximately 333 MMboe of proved reserves and 694 MMboe of proved plus probable reserves on a gross reserves basis to the Leismer assets and 319 MMboe of risked (354 MMboe unrisked) best estimate contingent resources on a company interest basis to the Leismer assets as at December 31, 2020.

The Leismer Project is a SAGD project that was commissioned in 2010 with regulatory approval for expanding capacity to 40,000 bbl/d. The Leismer Project averaged 18,264 bbl/d of bitumen production in 2020 with volumes impacted by voluntary curtailments early in the year.

The Leismer Project has additional planned SAGD phases, including a Leismer Project 2 phase with regulatory approvals and capacity to add 15,000 bbl/d and a further planned expansion phase, Leismer Project 3, with the ability to add another 40,000 bbl/d, which would take the Leismer assets to total planned capacity of approximately 80,000 bbl/d.

Future SAGD development for the delineated Corner assets includes two phases to take the assets of approximately 90,000 bbl/d of capacity. Development of the Corner assets is contingent upon various factors.

McDaniel has assigned approximately 353 MMboe of proved plus probable reserves on a gross reserves basis to the Corner assets and 416 MMboe of risked (520 MMboe unrisked) best estimate contingent resources on a company interest basis to the corner assets as at December 31, 2020.

Hangingstone Assets

The Hangingstone assets are located approximately 20 kilometers southwest of the city of Fort McMurray in northeastern Alberta and include a concentrated, contiguous land base of approximately 86,000 net acres. The company owns a 100% working interest.

McDaniel had assigned approximately 32 MMboe of proved reserves and 36 MMboe of proved plus probable reserves on a gross reserves basis to the Hangingstone assets as of December 31, 2020.

The Hangingstone SAGD Project has a facility capacity of 12,000 bbl/d and the assets have expansion capability of approximately 80,000 bbl/d. The Hangingstone Project averaged 4,481 bbl/d of bitumen production in 2020 with volumes impacted by the suspension of operations in the second and third quarter.

Thermal Oil Exploration Areas

Dover West Assets

The company has a 100% working interest in its Dover West assets, which are located 90 kilometers north of Fort McMurray. As of December 31, 2020, the Dover West assets included a major contiguous land base of approximately 156,000 net acres.

Birch Assets

As of December 31,2020, the company held a 100% working interest in the Birch assets. The Birch assets were located within the Athabasca oil sands fairway of northeastern Alberta, approximately 95 kilometers northwest of the city of Fort McMurray and include a contiguous land base of approximately 134,000 net acres. The mineral interest lands have subsequently been relinquished on these long-dated assets.

Grosmont Assets

As of December 31, 2020, the company held a 50% operated working interest in the Grosmont assets, which were located within the Athabasca oil sands fairway of northeastern Alberta. The Grosmont assets include approximately 110,000 net acres and are prospective for development in carbonate reservoirs. The mineral interest lands have subsequently been relinquished on these long-dated assets.

History

Athabasca Oil Corporation was founded in 2006. The company was incorporated in 2006. It was formerly known as Athabasca Oil Sands Corp. and changed its name to Athabasca Oil Corporation in May 2012.