Athabasca Oil Corporation announced it has entered into transaction agreements to create Duvernay Energy Corporation with Cenovus Energy Inc. Duvernay Energy will be a standalone self-funded entity that will drive strong, high netback cash flow and production growth and is expected to unlock significant value. The transaction is aligned with Athabasca?s strategy to maximize cash flow per share growth and return capital to shareholders. Athabasca and Cenovus will jointly contribute assets into Duvernay Energy.

Athabasca will own a 70% equity interest in Duvernay Energy with Cenovus owning the remaining 30% equity interest. Athabasca will manage Duvernay Energy through a management and operating services agreement. Duvernay Energy?s Board of Directors will include three members nominated by Athabasca and one member nominated by Cenovus.

On inception, Duvernay Energy will have strong Liquidity including seed capital of $40 million and a $50 million new credit facility led by ATB Financial. Athabasca?s $22 million seed capital contribution to Duvernay Energy will be within its previous $175 million 2024 capital guidance ($135 million Thermal Oil and $40 million Light Oil). Athabasca is also contributing ~$20 million in expenditures related to Fourth Quarter 2023 drilling operations on a 100% working interest multi-well pad and long lead inventory for future activity.

The Transaction will have an effective date of January 1, 2024, is expected to close in the first quarter of 2024 and is subject to customary closing conditions and regulatory approvals, including Competition Act approval. On closing the Company will provide updated guidance for Duvernay Energy and Athabasca.