The TSX30 is an annual rating of the 30 top-performing Canadian shares based mostly on dividend-adjusted share worth efficiency over a three-year interval. Vitality corporations accounted for practically 50% of the winners within the sixth version in 2024. Athabasca Oil (TSX:ATH) ranked sixth with a large plus-429% return over three years.
The $4 billion, liquids-weighted intermediate producer missed the record final yr, dominated by metals and mining shares. Nevertheless, this prime Canadian power inventory is about for main positive factors and will return to the highlight in 2026. A number of optimistic elements have but to mirror within the present share worth. At $8.36 per share, you’d be investing in a possible progress and buyback king.
Properly-rounded portfolio
Athabasca invests in high-margin tasks to maximise money move per share progress. The corporate operates within the Western Canadian Sedimentary Basin, specializing in thermal and light-weight oil sources. Liquids-weighted means extra oil and better margins.
The Thermal division, the expansion engine, makes use of Steam Assisted Gravity Drainage (SAGD) expertise to extract bitumen from oil sands. Leismer and Hangingstone, the lead tasks, boast a low-decline manufacturing base and generate important free money move (FCF).
Duvernay Vitality is a self-funded, pure play firm. Athabasca has a 70% majority stake, whereas Cenovus Vitality owns 30%. This second enterprise phase produces mild oil and liquids-rich pure fuel from unconventional reservoirs. It owns and operates strategic regional infrastructure within the Duvernay at Higher Kaybob.
Athabasca intends to capitalize on the long-term progress optionality in high-quality Thermal Oil tasks. Duvernay provides versatile growth alternatives. This portfolio is well-rounded, with a singular publicity to liquids-rich manufacturing and a deep stock of long-life reserves.
Worthwhile progress
Athabasca Oil is managing the enterprise for robust free money move (FCF). Thus, the 2026 funds will give attention to capital tasks inside its core property that might drive worthwhile progress. The mid-cap inventory is a non-dividend payer however commits to returning 100% of FCF to shareholders via buybacks.
Since 2021, the corporate has returned $1.1 billion to shareholders, $695 million for share buybacks and $386 million for debt discount. The maturity of its time period debt is 2029. Athabasca forecasts $1.1 billion in extra FCF over the subsequent 5 years whereas funding its progress initiatives.
Progressive enlargement is underway in within the thermal oil division. It should end in an exit charge of 43,000 barrels of oil equal per day (boe/d) on year-end 2026, from 28,000 boe/d in 2024. Notably, in 2025, Athabasca generates FCF at US$60 per barrel, whereas the working break-even is US$40 per barrel WTI.
If oil costs settle between US$60 and US$62 this yr, Athabasca will generate “extra” money. Final, the big useful resource base, long-life, low decline property and low sustaining capital necessities are Athabasca’s aggressive benefits.
Lengthy-term wager
Athabasca Oil is absurdly low-cost vis-à-vis its seen progress potential. Given the numerous multi-year FCF, clear stability sheet, low company break even, and limitless stock, ATH is an effective long-term wager. The return to the TSX30 Checklist in a yr or two is probably going. Purchase now earlier than the value soars.