Athabasca Oil Corporation is reducing its corporate staff count by 15 per cent and suspending its Hangingstone SAGD operation “due to the significant decline in oil prices combined with the economic uncertainty associated to the ongoing COVID crisis.”
“This suspension was initiated on April 2, 2020 and will involve shutting in the well pairs, halting steam injection to the reservoir, and taking measures to preserve the processing facility and pipelines in a safe manner so that it could be re-started at a future date when the economy has recovered,” said the company in a news release.
“The Hangingstone asset has an operating break-even of approximately US$37.50 Western Canadian Select and this action is expected to significantly improve corporate resiliency in the current environment.
“Hangingstone was Athabasca’s first operated oil sands project that began construction in 2013 and was commissioned in 2015. The Company would like to thank all staff that have worked hard over the years to bring this asset on stream. It is unfortunate that made-in-Alberta assets like Hangingstone cannot continue operations under current prices.”
On Friday morning, Western Canadian Select was about $10.
Athabasca did not say how many people were affected by the corporate staff reduction.
“Athabasca has now cancelled a total of $40 million of capital expenditures, representing a 30 per cent reduction from the original 2020 budget. The revised $85 million budget includes the recent completion of its winter Light Oil program (10 Montney wells and 16 Duvernay wells). The Company has no additional Light Oil activity planned for the balance of the year. The Company already had a minimal capital program in place and has no additional capital requirements to sustain its remaining liquids weighted production base,” it said.
Athabasca Oil Corporation is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. Situated in Alberta’s Western Canadian Sedimentary Basin, the company has amassed a significant land base of extensive, high quality resources, it said.
