Athabasca Oil Corporation (ATHOF)
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Athabasca Oil Corporation: Strong Cash Flow, Low Valuation, High Upside
Athabasca Oil Corporation remains a top value investment with a strong balance sheet, low capital needs, and 90+ years of reserves, even at $60 oil. The company generates free cash flow at $60 per barrel, maintains high activity margins, and has a break-even point of $40 WTI. Athabasca has returned over $400 million in debt, repurchased $317 million in shares, and promises to return 100% of free cash flow to shareholders in 2025.
Athabasca: 100% Of Free Cash Flow Allocated To Share Buybacks
Athabasca Oil Corporation plans to return 100% of free cash flow to investors through share buybacks, with a forecasted 20% cash flow per share CAGR from 2025 to 2029. The company is expanding production by 80% over five years, diversifying its liquids mix to include more light crude, and investing heavily in its Duvernay assets. Trading at a 37% discount to its 5-year average EV/CF, Athabasca offers an attractive opportunity for investors bullish on oil prices.
Athabasca Oil: 2025 Guidance
Athabasca Oil provides two budgets: a self-funding joint venture with Cenovus Energy and a strategy for its own acreage. The company maintains a net cash position but carries significant debt. Management plans to return all free cash flow to shareholders despite the debt. That is an aggressive balance sheet strategy.
Athabasca Oil: Big Improvement, But Still Risky
Distributing 100% of free cash flow to shareholders instead of repaying debt is risky. Thermal earnings are much more volatile than the unconventional business. The new joint venture with Cenovus Energy aims to increase light oil production.
