When Matt Taylor joined Athabasca Oil in May 2014 as VP Capital Markets & Communications after a decade in equity research and investment banking roles, he knew he was in the right place.

“I was attracted to Athabasca Oil as the company was embarking on an exciting growth vision,” he says. “The company had established a significant footprint in the Kaybob Duvernay, alongside a number of supermajors. It was an exciting time for the oil sands, with significant industry projects underway and an active M&A landscape.” 

By November 2019, Matt was promoted to CFO of the mid-sized energy company. Within four months, the COVID pandemic and OPEC+ price war would see Alberta’s oil and gas sector facing its toughest challenge yet – weathering a global “black swan” event. Western Canadian Select (WCS) oil was selling at a record-low of around $5 per barrel by the end of March 2020. 

By April, Athabasca took swift action to ensure survival during unprecedented times. The indefinite suspension of operations at its Hangingstone oil sands project in the spring included shuttering the facility and well pairs for startup into a price recovery. Oil sands players made extraordinary moves not seen in prior price cycles and production proved to be resilient following temporary curtailment measures.

“We are in a cyclical business,” shares Taylor, “We have to be prepared for commodity volatility and periods of extended market dislocation. The pandemic taught our industry longstanding lessons. Athabasca is now optimized as a low cost producer with an enviable balance sheet, a net cash position affords us strategic flexibility.” 

With a clear strategy that prioritizes profitable growth and durable shareholder returns, Athabasca Oil’s longevity is underpinned by financial resilience. 

Today, Athabasca has built a solid reputation as a sustainable thermal oil producer with the bulk of their production coming from two key assets, Leismer and Hangingstone, in the Fort McMurray area. They are a nimble company with a proven track record for operational execution and prudent balance sheet management. 

“Our asset base boasts exposure to large oil weighted resources. In fact, we have more than two billion barrels of reserves and contingent resources within our portfolio today,” Taylor explains. 

Established oil sands operations are well-positioned in comparison to shale plays as the production base is predictable and has low decline with relatively low sustaining capital requirements. 

“We are growing our cornerstone Leismer asset to 40,000 bbl/d over the next three years. We acquired this world class asset from Equinor (formerly Statoil) back in 2017 and have been focused on progressive brownfield growth projects that are more short cycle in nature,” says Taylor. 

Athabasca also has a new private subsidiary created earlier this year, Duvernay Energy. It is owned 70 per cent by Athabasca and 30 per cent by Cenovus. The company was formed with a newly operated land base through lands strategically acquired at crown sales, an asset contribution from Cenovus, and Athabasca’s existing joint venture assets with Murphy. 

“Duvernay Energy is positioned as a high growth vehicle with its own balance sheet and capital allocation strategy. We are operating in the active Kaybob Duvernay fairway with development revitalized following a change in hands from supermajors to active mid-cap producers,” explains Taylor. 

“Our strategy is aimed at driving top line production and cash flow growth. We have a steadfast commitment to shareholder returns. Once we hit our debt target in 2022, we pivoted to share buybacks, which have been funded with free cash flow. This recipe amplifies cash flow per share growth and, in our view, is the best path to drive shareholder value.” 

Among the many energy companies in the industry, Athabasca Oil ensures it stands out in several ways. “We maintain a deep runway of high-quality projects,” shares Taylor “Our existing asset base can drive organic growth in excess of 100,000 boe/d oil weighted production. We have a history of creative deals that has driven significant value for our shareholders.” 

Partnering with ATB Financial has helped Athabasca Oil meet its goals. “ATB has been a strong financial partner for Athabasca Oil, and they are the lead bank in our credit facility,” says Taylor.

“Athabasca changed our perception on how an oil sands company could react to sustained low oil prices. Their team made some tough decisions early on, and were able to skillfully navigate the turmoil,” shared Matthew Littlejohn, Director, Corporate Banking at ATB Capital Markets. “They build and retain excellent relationships with their financial partners, which has contributed to the enviable position they now hold.” 

Taylor sees a bright and prosperous future for Alberta’s oil sector. 

“Recent egress developments will allow our industry to help fulfill increasing global energy demand with responsible resource development.” 

On the heels of a recent TSX30 win (third place) within the 30 top performing companies on the Toronto Stock Exchange over a three year period, Taylor, on behalf of the shareholders and management team, thanked “our dedicated employees in Calgary and in the field. They are instrumental in Athabasca’s success. Our field teams always put safety first and have done an exceptional job navigating the threat of wildfires the past few seasons.” 

He concludes about the company’s future, “It’s an exciting time to be working at Athabasca. We are executing a clear strategy aimed at driving shareholder value. We have a high-quality asset base with a deep inventory and have the ability to capitalize on these opportunities. 

Learn more at www.atha.com.

From the November 2024 edition of Business in Calgary, and Business in Edmonton. Shared with permission.