Athabasca Oil Corp.: Operations update

Athabasca Oil Corporation has provided an update on recent operational activities. Athabasca achieved first oil at Hangingstone in July and the company now has 15 well pairs on production with an additional six well pairs on circulation.

Bitumen production has averaged 3200 bbl/d to date in September with current production in excess of 4000 bbl/d. Reservoir response, plant reliability and initial production ramp-up continues to meet management's expectations. Athabasca has already achieved the low-end of its 2015 year-end Thermal Oil exit guidance of 3000 - 6000 bbl/d (December average). Production is expected to ramp up to the planned 12000 bbl/d in 4Q16 with no additional development capital required.

In the Duvernay, Athabasca resumed drilling operations in early September on a two well pad in the volatile oil window at Kaybob East (Section 5-65-18W5). Completions operations are expected in October with an on-stream date in 1Q16. The purpose of this pad is to test higher completion proppant loading and continue validation of the potential of the volatile oil window where Athabasca holds a significant land position.

The company expects to see significant cost improvements through multi-well pad efficiencies, utilisation of a new fit for purpose rig and reductions from the current service cost environment. The company has also spud a Montney well at Placid 11-17-60-23W5 to follow up on two successful wells drilled in winter 2015. Athabasca expects that this limited Montney development will provide economic returns in today's market while ensuring the Placid area is set up for development in the future when commodity prices improve.

Edited from press release by Angharad Lock

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