Athabasca Oil Corporation Announces Closing Of Non-Core Light Oil Asset Sale, Reaffirms 2023 Guidance And Provides A Return Of Capital Update

(MENAFN- GlobeNewsWire - Nasdaq) CALGARY, Alberta, Sept. 14, 2023 (GLOBE NEWSWIRE) -- Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the“Company”) is pleased to announce that it has closed its previously announced sale of non-core Light Oil assets at Placid, Saxon and Simonette to a private company (the“Transaction”).

Transaction Overview

Athabasca has sold its 70% operated working interest in Placid targeting the Montney, its 30% 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 ~3,000 boe/d (~45% Liquids). The deal closed on September 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 the smaller scale, lower liquids content and lower relative returns vercore assets within the Company's portfolio.

The Company's Light Oil division now consists exclusively of the Duvernay in the Greater Kaybob area with ~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 multi-year free cash flow outlook. Athabasca is uniquely positioned in the liquids-rich oil window of the play with a de-risked inventory of ~500 gross wells.

Reaffirming 2023 Guidance

Athabasca expects its annual production to be within previguidance of 34,500 – 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's strong balancesheet
affords it significant flexibility for future capital allocation opportunities. The Company is forecasting Liquidity of ~$415 million, inclusive of ~$325 million of cash, at the end of September. The Company anticipates releasing its 2023 third quarter results on November 1 after market
close and its 2024 budget guidance in December.

Return of Capital Update

Athabasca is committed to executing on its 2023 return of capital commitment that will see a minimum of 75% of Excess Cash Flow (Adjusted Funds Flow less Sustaining Capital) in 2023 returned to shareholders
through share buybacks. Since April, the Company has completed ~$80 million in share buybacks (~25 million shares at an average price of $3.19 per share).

About 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”. For more information, visit .

For more information, please contact:
Matthew Taylor Robert Broen
Chief Financial Officer President and CEO
1-403-817-9104 1-403-817-9190

Reader Advisory:
This News Release contains forward-looking information that involves varirisks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words“anticipate”,“plan”,“project”,“continue”,“maintain”,“estimate”,“expect”,“will”,“target”,“forecast”,“could”,“intend”,“potential”,“guidance”,“outlook” and similar expressions suggesting future outcome are intended to identify forward-looking information. The forward-looking information is not historical fact, but rather is based on the Company's current plans, objectives, goals, strategies, estimates, assumptions and projections about the Company's industry
, business and future operating and financial
results. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. No assurance can be given that these expectations will prove to be correct and such forward-looking information included in this News Release should not be unduly relied upon. This information speaks only as of the date of this News Release. In particular, this News Release contains forward-looking information pertaining to, but not limited to, the following: our strategic plans; future debt levels and cash position; the allocation of future capital; anticipated additional development in the Duvernay play and timing thereof; timing and quantum for shareholder returns including share buybacks; Adjusted Funds Flow and Free Cash Flow in 2023 to 2025; forecasted daily production and the composition of production; our outlook in respect of the Corporation's business environment; and other matters.

In addition, information and statements in this News Release relating to "Reserves" and“Resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. With respect to forward-looking information contained in this News Release, assumptions have been made regarding, among other things: commodity prices; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which the Company conducts and will conduct business and the effects that such regulatory framework will have on the Company, including on the Company's financial
condition and results of operations; the Company's financial
and operational flexibility; the Company's financial
sustainability; Athabasca's cash flow break-even commodity price; the Company's ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the applicability of technologies for the recovery and production of the Company's reserves and resources; future capital expenditures to be made by the Company; future sources of funding for the Company's capital programs; the Company's future debt levels; future production levels; the Company's ability to obtain financing and/or enter into joint venture arrangements, on acceptable terms; operating costs; compliance of counterparties with the terms of contractual arrangements; impact of increasing competition globally; collection risk of outstanding accounts receivable from third parties; geological and engineering estimates in respect of the Company's reserves and resources; recoverability of reserves and resources; the geography of the areas in which the Company is conducting exploration and development activities and the quality of its assets. Certain other assumptions related to the Company's Reserves and Resources are contained in the report of McDaniel & Associates Consultants Ltd. (“McDaniel”) evaluating Athabasca's Proved Reserves, Probable Reserves and Contingent Resources as at December 31, 2022 (which is respectively referred to herein as the "McDaniel Report”).

Actual results could differ materially from those anticipated in this forward-looking information as a result of the risk factors set forth in the Company's Revised Annual Information Form (“AIF”) dated May 11, 2023 available on SEDAR at including, but not limited to: weakness in the oil and gas
; exploration, development and production risks; prices, market
s and market
ing; market
conditions; climate change and carbon pricing risk; statutes and regulations regarding the environment; regulatory environment and changes in applicable law; gathering and processing facilities, pipeline systems and rail; reputation and public perception of the oil and gas
sector; environment, social and governance goals; political uncertainty; state of capital market
s; ability to finance capital requirements; access to capital and insurance; abandonment and reclamation costs; continued impact of the COVID-19
pandemic; changing demand for oil and natural gas
products; anticipated benefits of acquisitions and dispositions; royalty regimes; foreign exchange rates and interest rates; reserves; hedging; operational dependence; operating costs; project risks; supplychain
disruption; labour supply, financial
assurances; diluent supply; third party credit risk; Indigenclaims; reliance on key personnel and operators; income tax; cybersecurity; advanced technologies; hydraulic fracturing; liability management; seasonality and weather conditions; unexpected events; internal controls; limitations of insurance; litigation; natural gas
overlying bitumen resources; competition; chain of title and expiration of licenses and leases; breaches of confidentiality; new industry
related activities or new geographical areas; and risks related to our debt and securities, including level of indebtedness, restrictions in our debt instruments, additional indebtedness and issuance of additional securities. Readers are cautioned that the foregoing list of factors is not exhaustive. Unpredictable or unknown factors not discussed in this News Release could also have adverse effects on forward-looking statements. Although the Company believes that the expectations conveyed by the forward-looking information are reasonable based on information available to it on the date such forward-looking information are made, no assurances can be given as to future results, levels of activity and achievements. All subsequent forward-looking information, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

Also included in this News Release are estimates of Athabasca's 2023 and 2023-25 outlook which are based on the variassumptions as to production levels, commodity prices, currency exchange rates and other assumptions disclosed in this News Release. To the extent any such estimate constitutes a financial
outlook, it was approved by management and the Board of Directors of Athabasca and is included to provide readers with an understanding of the Company's outlook. Management does not have firm commitments for all of the costs, expenditures, prices or other financial
assumptions used to prepare the financial
outlook or assurance that such operating results will be achieved and, accordingly, the complete financial
effects of all of those costs, expenditures, prices and operating results are not objectively determinable. The actual results of operations of the Company and the resulting financial
results may vary from the amounts set forth herein, and such variations may be material. The outlook and forward-looking information contained in this New Release was made as of the date of this News release and the Company disclaims any intention or obligations to update or revise such outlook and/or forward-looking information, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.

Oil and Gas Information

“BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas
to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy
equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas
and crude
oil based on the current prices of natural gas
and crude
oil is significantly different from the energy
equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Reserves Information

The McDaniel Report was prepared using the assumptions and methodology guidelines outlined in the COGE Handbook and in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities, effective December 31, 2022. There are numeruncertainties inherent in estimating quantities of bitumen, light crude
oil and medium crude
oil, tight oil, conventional natural gas
, shale gas
and natural gas
liquids reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. In general, estimates of economically recoverable reserves and the futurecash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, market
ability of oil and natural gas
, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, estimates of the economically recoverable reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of futurerevenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary. The Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. Reserves figures described herein have been rounded to the nearest MMbbl or MMboe. For additional information regarding the consolidated reserves and information concerning the resources of the Company as evaluated by McDaniel in the McDaniel Report, please refer to the Company's Revised Annual Information Form.

The 500 gross total Duvernay drilling
locations referenced include: 5 proved undeveloped locations and 77 probable undeveloped locations for a total of 82 booked locations with the balance being unbooked locations. Proved undeveloped locations and probable undeveloped locations are booked and derived from the Company's most recent independent reserves evaluation as prepared by McDaniel as of December 31, 2022 and account for drilling
locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are internal management estimates. Unbooked locations do not have attributed reserves or resources (including contingent or prospective). Unbooked locations have been identified by management as an estimation of Athabasca's multi-year drilling
activities expected to occur over the next two decades based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling
locations and if drilled there is no certainty that such locations will result in additional oil and gas
reserves, resources or production. The drilling
locations on which the Company will actually drill wells, including the number and timing thereof is ultimately dependent upon the availability of funding, commodity prices, provincial fiscal and royalty policies, costs, actual drilling
results, additional reservoir information that is obtained and other factors.

Non-GAAP and Other Financial Measures Disclosure

The“Free Cash Flow”,“Excess Cash Flow”,“Sustaining Capital” and“Liquidity” financial
measures contained in this News Release do not have standardized meanings which are prescribed by IFRS and they are considered to be non-GAAP financial
measures or ratios. These measures may not be comparable to similar measures presented by other issuers and should not be considered in isolation with measures that are prepared in accordance with IFRS. N Liquidity is a supplementary financial

Free Cash Flow is defined as Adjusted Funds Flow less Capital Expenditures.

The Excess Cash Flow and Sustaining Capital measures allow management and others to evaluate the Company's ability to return capital to Shareholders. Sustaining Capital is managements assumption of the required capital to maintain the Company's production base. The Excess Cash Flow measure is calculated by Adjusted Funds Flow less Sustaining Capital.

Liquidity is defined as cash and cash equivalents pavailable credit capacity.

Footnote: Refer to the“Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures


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