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".

Athabasca Oil Corporation
TypePublic
TSX: ATH
IndustryOil & Gas
FoundedCanada (2006)
HeadquartersCalgary, Alberta, Canada
Key people
Rob Broen (President & CEO)
Number of employees
60 (2010)[1]
Websitewww.atha.com

Operations

As of December 2009, Athabasca Oil Corporation owns leases and permits on 1,570,000 acres (6,400 km2) in the Athabasca oil sands, but does not operate any commercial developments.[2] As of June 2010, the company's reserves included an estimated 8.6 billion barrels (1.37×109 m3) of contingent resource (potentially recoverable oil) and 114 million barrels (18,100,000 m3) of probable reserves.[3] AOC sold 60% of two assets, included above, to PetroChina in 2009.

AOC intends to produce oil through the steam-assisted gravity drainage (SAGD) method rather than through open-pit mining as older oil sands mines have.[4] SAGD projects require less surface area than open-pit, but must consume additional energy for steam generation.[4]

Ownership

The company's highly anticipated[5] initial public offering (IPO) in early 2010 was the largest Canadian IPO since that of Manulife Financial in 1999, and North America's largest in 2010 (as of March 31).[6] The sale, selling a 19% stake at Can$18 per share, valued the company at around Can$7,000,000,000.[6]

The IPO's initial success was attributed in part to AOSC's 2009 asset sale to PetroChina, divesting 60% working interest in its Mackay River and Dover projects for Can$1,900,000,000.[5][7][8]

Following the IPO, AOC's share price dropped 33% in the first month of trading, making it Canada's worst-performing IPO since 2007.[9]

In 2017, Athabasca purchased the entirety of Statoil's oil sands assets as the Norwegian giant exited the oil sands, including a producing plant, an undeveloped project, and some midstream assets.[10] AOC sold the midstream assets to Enbridge in 2018.[11]

Duvernay Formation

AOC's share price rose dramatically following the announcement of a $US1.2 billion Duvernay Formation acreage joint venture between Encana and PetroChina. Athabasca Oil Corporation holds the largest publicly disclosed Duvernay Formation acreage rights (640,000 acres).[12][notes 1]

Notes
  1. This was the first oil sands joint venture between a Canadian company and a foreign state-owned company since Prime Minister Stephen Harper changed regulations in December 2012 making it almost impossible for state-owned companies to purchase controlling interests in oil sands projects. The success of this joint venture, which is within the new rules and regulations, is encouraging for overseas investors who want to access Canadian oil and natural gas resources and for companies like Athabasca Oil Corp. (ATH), Talisman Energy Inc. and Canadian Natural Resources Ltd. (CNQ) that need funds for drilling and development costs (Penty, Rebecca. December 17, 2012. Encanas PetroChina Partnership May Be First of Many. China Institute.

References
  1. "Athabasca Oil Sands Corporation (Public, TSE:ATH)". Google Finance Canada. Archived from the original on February 25, 2012. Retrieved June 12, 2010.
  2. "Company Profile for Athabasca Oil Sands Corporation". Reuters. Archived from the original on September 27, 2012. Retrieved June 12, 2010.
  3. Healing, Dan (June 11, 2010). "Athabasca Oil Sands boosts resource estimate". Calgary Herald. Retrieved June 12, 2010.
  4. Tait, Carrie (March 31, 2010). "Athabasca IPO sign of oil sands endorsement". Financial Post. Archived from the original on April 4, 2010. Retrieved June 12, 2010.
  5. Milstead, David (March 22, 2010). "Pre-IPO bonanza for Athabasca backers". The Globe and Mail. Archived from the original on February 21, 2011. Retrieved June 12, 2010.
  6. Alexander, Doug (March 31, 2010). "Athabasca Oil Sands Raises C$1.35 Billion in IPO (Update2)". Bloomberg. Archived from the original on August 5, 2011. Retrieved June 12, 2010.
  7. Tait, Carrie (August 31, 2009). "PetroChina takes $1.9-billion stake in oil sands". Financial Post. Retrieved June 12, 2010.
  8. "PetroChina offers $2B for oilsands stake". CBC News. August 31, 2009. Retrieved June 12, 2010.
  9. Alexander, Doug (May 12, 2010). "Athabasca Oil Sands Is Worst Performing Canadian IPO Since 2007". Bloomberg Businessweek. Archived from the original on May 20, 2010. Retrieved June 12, 2010.
  10. "Statoil completes the sale of its oil sands business" (Press release). Equinor (formerly Statoil). January 31, 2017. Retrieved February 16, 2020.
  11. Jaremko, Deborah (December 12, 2018). "Athabasca selling oilsands midstream assets to Enbridge for $265 million". JWN Energy. Retrieved February 16, 2020.
  12. Rebecca Penty (December 17, 2012). "Encanas PetroChina Partnership May Be First of Many". Edmonton, AB: China Institute, University of Alberta. Archived from the original on December 3, 2013. Retrieved February 1, 2013.
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