DBRS Comments on Athabasca Oil Corporation Reaching an Agreement with Fort McKay First Nation

DBRS today notes that Athabasca Oil Corporation (Athabasca or the Company) has reached an agreement with Fort McKay First Nation (FMFN) with regards to the Dover Commercial Project (the Project). In light of the agreement, FMFN has removed all their objections for the Project to move ahead which paves the way for Athabasca to exercise its put option and sell the remaining 40% of the Dover assets to PetroChina for the agreed $1.3 billion. DBRS views this as a positive development since this agreement will likely smooth the remaining regulatory process.

With the FMFN settlement now secured, the remaining two steps in exercising the put option include (1) obtaining receipt of Order in Council, and (2) approval from Alberta Environment. The timing of the Dover option being exercised remains critical for Athabasca to maintain its liquidity.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Companies in the Oil and Gas Industry, which can be found on our website under Methodologies.

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