Athabasca Oil Announces 2024 Second Quarter Results highlighted by Record Free Cash Flow, 28,000 bbl/d Milestone at Leismer and Strong Duvernay Well Results; Sanctioning Progressive Growth to 40,000 bbl/d at Leismer

Press Release

July 24, 2024

CALGARY – Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to report its second quarter results highlighted by record Free Cash Flow, operational milestones and the continued execution on return of capital commitments.

Corporate Consolidated Q2 2024 Highlights

• Production: Average production of 37,621 boe/d (98% Liquids). The Company is increasing its annual corporate guidance by 1,000 boe/d to 36,000 – 37,000 boe/d, including both Duvernay Energy and Athabasca (Thermal Oil) production.
• Record Cash Flow: Record Adjusted Funds Flow of $166 million and cash flow from operating activities of $135 million. In 2024, the Company forecasts Adjusted Funds Flow of ~$590 million¹, supported by increased operating scale and strong oil pricing for the balance of the year.
• Balance Sheet: Net Cash of $125 million; Liquidity of $429 million (including $303 million cash).

Athabasca (Thermal Oil) Quarterly Highlights

• Production: Second quarter production of 33,765 bbl/d (26,423 bbl/d at Leismer & 7,342 bbl/d at Hangingstone). In June, Leismer successfully ramped up to a record ~28,000 bbl/d.
• Cash Flow: Adjusted Funds Flow of $149 million with an Operating Netback of $52.59/bbl. Athabasca (Thermal Oil) expects to generate $1.4 billion of Free Cash Flow¹ during the timeframe of 2024‐27.
• Capital Program: $34 million of capital focused on sustaining operations at Leismer and Hangingstone. Revised 2024 capital program of $193 million (previously $135 million) now incorporates progressive growth plans at Leismer.
• Record Free Cash Flow: $115 million of Free Cash Flow supporting return of capital commitments.

Duvernay Energy Quarterly Highlights

• Production: Second quarter production of 3,856 boe/d (80% Liquids), up ~100% from the first quarter and supported by production from new wells. Strong production results with restricted IP90s averaging ~1,000 boe/d (86% Liquids) for each well on the 2‐well 100% working interest (“WI”) pad and approximate IP60s averaging ~1,000 boe/d (87% Liquids) for each well on the 3‐well 30% WI pad.
• Cash Flow: Adjusted Funds Flow of $16 million with an Operating Netback of $51.46/boe.
• Capital Program: $14 million focused on drilling, completions and readiness for upcoming drilling.

Sanctioning of Leismer Expansion to 40,000 bbl/d

• Progressive Growth: The Company is sanctioning progressive growth to 40,000 bbl/d at Leismer in stages over the next three years. Estimated capital cost is $300 million (~$25,000/bbl/d capital efficiency). The Company expects incremental production in 2026 and 2027, reaching 40,000 bbl/d in

2028. Regulatory approvals are in place.

Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Net Cash, Liquidity) and production disclosure.

• Pricing Assumptions: H1 2024 prices actualized and flat pricing of US$80 WTI, US$15 WCS heavy differential, C$67/MWh, C$1.48 AECO, and 0.73 C$/US$ FX for the balance of the year. 2025‐26 US$80 WTI, US$12.50 WCS heavy differential, C$3 AECO, and 0.75 C$/US$ FX.

² The Company’s illustrative multi‐year outlook assumes a 10% annual share buyback program at an implied share price of 4.5x EV/Debt Adjusted Cash flow in 2025 and beyond.

• Maximize Long‐term Free Cash Flow Generation: Expanded scale is expected to drive additional margin growth. The Company can maintain 40,000 bbl/d for approximately fifty years (Proved plus Probable Reserves) at an estimated annual sustaining capital of ~$6/bbl, maximizing long‐term Free Cash Flow generation.
• Financial Capacity for Growth and Continued Return of Capital: The Company expects incremental growth capital to be funded well within cash flow while continuing to allocate 100% of Free Cash Flow through its return of capital commitment.

Return of Capital

• 2024 Return of Capital Commitment: Athabasca (Thermal Oil) is allocating 100% of Free Cash Flow (not including Duvernay Energy) to share buybacks in 2024. Year to date the Company has completed $173 million in share buybacks (34.7 million shares at an average price of $4.99/sh) and forecasts 2024 Free Cash Flow of ~$350 million¹.
• Focus on Per Share Metrics: A steadfast commitment to return of capital has driven an ~88 million reduction (~14%) in the Company’s fully diluted share count since March 31, 2023.

Corporate Consolidated – Strategic Update

• Value Creation: The Company’s Thermal Oil division provides a differentiated liquids weighted growth platform supported by financial resiliency to execute on return of capital initiatives. Athabasca’s subsidiary company, Duvernay Energy Corporation, is designed to enhance value for Athabasca’s shareholders by providing a clear path for self‐funded production and cashflow growth in the Kaybob Duvernay resource play. Athabasca (Thermal Oil) and Duvernay Energy have independent strategies and capital allocation frameworks.
• Consolidated Free Cash Flow Growth: Athabasca’s capital allocation framework is designed to unlock shareholder value by prioritizing multi‐year cash flow per share growth. In 2024, Athabasca forecasts Corporate Consolidated Adjusted Funds Flow of ~$590 million or $1.07/sh, representing ~100% per share growth over 2022 when the Company sanctioned growth to 28,000 bbl/d at Leismer. The Company’s updated outlook targets a 13% net annual production growth (23% per share) and a >20% net Adjusted Funds Flow per share compound annual growth rate during the three‐year time to 2027².

Athabasca (Thermal Oil) – Strategic Update

• Large Resource Base: Athabasca’s top‐tier assets underpin a strong Free Cash Flow outlook with low sustaining capital requirements. The long life, low decline asset base includes ~1.2 Billion barrels of Proved plus Probable reserves and ~1 Billion barrels of Contingent Resource.
• Strong Financial Position: Prudent long‐term balance sheet management is a core tenet of Athabasca’s strategy. The Company has peer leading credit metrics including a Net Cash position of $125 million with Liquidity of $429 million (including $303 million cash). The Company intends to proactively refinance its existing term debt due in late 2026 (US$157 million outstanding) supported by strong business fundamentals and attractive credit markets. Maintaining a similar level of outstanding debt is expected to provide strategic flexibility and business resiliency throughout commodity price cycles.

Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Net Cash, Liquidity) and production disclosure.

• Pricing Assumptions: H1 2024 prices actualized and flat pricing of US$80 WTI, US$15 WCS heavy differential, C$67/MWh, C$1.48 AECO, and 0.73 C$/US$ FX for the balance of the year. 2025‐26 US$80 WTI, US$12.50 WCS heavy differential, C$3 AECO, and 0.75 C$/US$ FX.

² The Company’s illustrative multi‐year outlook assumes a 10% annual share buyback program at an implied share price of 4.5x EV/Debt Adjusted Cash flow in 2025 and beyond.

• Leismer Expansions: Athabasca recently completed an expansion to 28,000 bbl/d at a competitive capital efficiency of $14,000/bbl/d. Following the success of this project and with the constructive commodity price environment, the Company has sanctioned a further expansion to 40,000 bbl/d. This will be completed utilizing a progressive build strategy that adds incremental production in 2026 and 2027 with the full 40,000 bbl/d achieved in 2028. The total capital for this project is estimated at $300 million for a capital efficiency of ~$25,000/bbl/d. The Company can maintain 40,000 bbl/d for approximately fifty years (Proved plus Probable Reserves).
• Hangingstone Activity: The Company recently spud the first of two ~1,400 meter well pairs. Well design with extended reach laterals is expected to drive project capital efficiencies of ~$15,000/bbl/d and will leverage off available infrastructure capacity. These sustaining well pairs will support base production in 2025 and beyond with the objective of ensuring Hangingstone continues to deliver meaningful cash flow contributions to the Company and maintaining competitive netbacks ($51.89/bbl Q2 2024 Operating Netback).
• Corner – Future Growth: The Company’s Corner asset is a large de‐risked oil sands asset adjacent to Leismer with 351 million barrels of Proved plus Probable reserves and 520 million barrels Contingent Resource (Best Estimate Unrisked). There are over 300 delineation wells and ~80% seismic coverage, with reservoir qualities similar or better than Leismer. The asset has a 40,000 bbl/d regulatory approval for development with the existing pipeline corridor passing through the Corner lease. The Company has updated its development plans and is finalizing facility cost estimates. Athabasca intends to explore external funding options and does not plan to fund an expansion utilizing existing cash flow or balance sheet resources.
• Significant Multi‐Year Free Cash Flow: Inclusive of the progressive growth at Leismer, Athabasca (Thermal Oil) expects to generate $1.4 billion of Free Cash Flow¹ during the timeframe of 2024‐27. Beyond 2028, the Company can maintain its production base for approximately fifty years (Proved plus Probable Reserves) at an estimated annual sustaining capital of ~$6/bbl, maximizing long‐term Free Cash Flow generation. Free Cash Flow will continue to support the Company’s growth and return of capital initiatives.
• Thermal Oil Royalty Advantage: Athabasca has significant unrecovered capital balances on its Thermal Oil Assets that ensure a low Crown royalty framework (~7%¹). Leismer is forecasted to remain pre‐payout until 2027¹ and Hangingstone is forecasted to remain pre‐payout beyond 2030¹.
• Exposure to Improving Heavy Oil Pricing: With the start‐up of the Trans Mountain pipeline expansion (590,000 bbl/d) in early May, spare pipeline capacity is expected to drive tighter and less volatile WCS heavy differentials. Every $5/bbl WCS change impacts Athabasca (Thermal Oil) Adjusted Funds Flow by ~$85 million annually.
• Tax Free Horizon: Athabasca (Thermal Oil) has $2.5 billion of valuable tax pools and does not forecast paying cash taxes for approximately seven years.

Duvernay Energy – Strategic Update

• Value Creation: Duvernay Energy (“DEC”) is an operated, private subsidiary of Athabasca (owned 70% by Athabasca and 30% by Cenovus Energy). DEC accelerates value realization for Athabasca’s

Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Net Cash, Liquidity) and production disclosure.

• Pricing Assumptions: H1 2024 prices actualized and flat pricing of US$80 WTI, US$15 WCS heavy differential, C$67/MWh, C$1.48 AECO, and 0.73 C$/US$ FX for the balance of the year. 2025‐26 US$80 WTI, US$12.50 WCS heavy differential, C$3 AECO, and 0.75 C$/US$ FX.

² The Company’s illustrative multi‐year outlook assumes a 10% annual share buyback program at an implied share price of 4.5x EV/Debt Adjusted Cash flow in 2025 and beyond.

shareholders by providing a clear path for self‐funded production and cash flow growth without compromising Athabasca’s capacity to fund its Thermal Oil assets or its return of capital strategy.

• Kaybob Duvernay Assets: Exposure to ~200,000 gross acres in the liquids rich and oil windows with ~500 gross future well locations, including ~46,000 gross acres with 100% working interest.
• Self‐Funded Growth: Near‐term activity will be funded within Adjusted Funds Flow and initial seed The 2024 program includes drilling and completions of a two‐well 100% WI pad and a three‐ well 30% WI pad along with spudding two additional multi‐well pads in the Fall of 2024. The Company has self‐funded growth potential to in excess of ~20,000 boe/d (75% Liquids) by the late 2020s¹.

Corporate Guidance

Athabasca (Thermal Oil) guidance: Increased production guidance on strong performance year to date. The $193 million capital budget incorporates sustaining

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