Athabasca Oil (ATH) Q2 2024 earnings summary

Executive summary

• Q2 2024 production averaged 37,621 boe/d (98% liquids), with 2024 guidance raised to 36,000–37,000 boe/d, reflecting strong operational execution and record free cash flow.

• Adjusted funds flow reached $166MM in Q2, with 2024e adjusted funds flow of ~$590MM and record operational milestones at Leismer and Duvernay Energy.

• Year-to-date, $173MM was returned to shareholders via buybacks, with 34.7 million shares repurchased by July 24.

• Net cash position stands at $125MM and liquidity at $429MM as of June 30, 2024.

• 100% of free cash flow to be returned to shareholders in 2024 through buybacks.

Financial highlights

• Q2 2024 production averaged 37,621 boe/d (98% liquids), up from 33,971 boe/d in Q2 2023.

• Petroleum, natural gas, and midstream sales reached $401.7MM in Q2 2024, up from $282.6MM year-over-year.

• Adjusted funds flow was $165.7MM in Q2 2024, compared to $81.7MM in Q2 2023.

• Free cash flow for Q2 2024 was $117.3MM, with 2024 projected at ~$350MM and $1.4 billion expected over 2024–2027.

• Q2 2024 capital expenditures totaled $48.5MM.

Outlook and guidance

• 2024 production guidance raised to 36,000–37,000 boe/d, with Thermal Oil at 33,000–34,000 boe/d and Duvernay Energy at ~3,000 boe/d.

• 2024 capital program: $193MM for Thermal Oil, $82MM for Duvernay Energy.

• Leismer expansion to 40,000 bbl/d sanctioned, targeting full capacity by H1 2028, with incremental production in 2026 and 2027.

• Multi-year outlook targets 13% net annual production growth and >20% net adjusted funds flow per share CAGR to 2027.

• No cash taxes expected for approximately seven years due to $2.5 billion in tax pools.