Athabasca Oil’s Alberta Thermal and Light Oil Operations Are Nice Assets. But is it Canadian Enough?

By Will Ashworth

I began writing this piece before last week’s selloff. I took the weekend to assess the damage to the markets. Regrettbly, I expect more losses to come. I would take your time making moves to your investment portfolios. There is plenty of evidence that markets bounce back nicely after significant corrections. Stay calm, and you’ll get through this.   

Athabasca Oil (ATH) is a Calgary-based oil and gas exploration and development company focusing on producing thermal and light oil from its operations in Northern Alberta.

The name made it into my Canadian SMID-Cap 30, a collection of 30 small- and mid-cap stocks that trade on the Toronto Stock Exchange or TSX Venture Exchange. It is one of three energy stocks in the Canadian SMID-Cap 30. I selected ATH and two other stocks held by the RBC Canadian Mid-Cap Equity A (0P0001MVJA.TO) mutual fund.

As I said in October, I don’t think you can own a portfolio of TSX-focused stocks and not have an energy bet or two. Before the selloff, ATH was up nearly 9% over the five months since my Oct. 23 post about Athabasca. While I see gains over the long haul, it has lost almost 20% over the five days ending April 8. 

But in the meantime, let’s look at Athabasca’s Canadianness. Does it have enough Canadian content to be considered for the Buy Canadian Index? You’ll find out shortly. 

My last selection was Dollarama (DOL). It passed with flying colours, scoring 36 out of 40 points. 

There are four criteria for evaluating Buy Canadian Index candidates. A company must get at least 28 out of 40 points, on 1-10 for each criteria, to qualify. 

• Is it listed on the TSX or TSX Venture?

• How much revenue is from Canada?

• What percentage of its stock is held by Canadians? and 

• What percentage of its employees are located in Canada?

Athabasca Went Public on TSX in April 2010

The company went public as the Athabasca Oil Sands Corp. on April 8, 2010, selling 75 million shares at $18 for gross proceeds of $1.35 billion. The company’s projected daily production was more than 500,000 barrels at the time. In 2024, its annual production was 36,815 boe/d (barrels of oil equivalent per day), 7% higher than in 2023.   

While it hasn’t gotten close to the estimate, its 2024 results show that Athabasca’s business is very healthy, and that’s the most important thing.

• 10 points - A stock is listed only on a Canadian stock exchange.

• 6 points - A stock is dual-listed on a Canadian and foreign exchange. 

• 3 points - A stock is only listed on a stock exchange outside Canada.

Athabasca only trades on the TSX; On this criterion, it gets 10 points. 

Athabasca Revenues 

Athabasca finished 2024 with $1.37 billion in revenue, up 16.1% from $1.18 billion in 2023. Most of the revenue (95%) is from its thermal oil business in the Athabasca region of Northern Alberta. 

However, it also owns 70% of Duvernay Energy, a light oil producer that operates in partnership with Cenovus Energy (CVE), which owns 30% of the company. The two companies created Duvernay by combining their Kaybob assets northwest of Edmonton.

The company generates 100% of its revenue within Canada. 

• 10 points - A stock generates 75% of its revenue in Canada. 

• 6 points - A stock generates 50.1% to 74.9% of its revenue in Canada.

• 3 points - A stock generates 50.0% or less of its revenue in Canada. 

On this criterion, Athabasca gets 10 points. 

Athabasca’s Canadian Ownership 

According to S&P Global Market Intelligence, Fidelity is the company’s largest shareholder, with 12.03% of its stock as of Dec. 31. Insiders control an additional 1.82%, including CEO Robert Broen, who has 4.21 million shares, or 0.82% of Athabasca’s outstanding shares.  

Still, retail investors account for 71.67% of its stock, institutions another 26.50%, and insiders the remainder. Assuming that a significant percentage of the retail investors are Canadian and a decent number of the institutional investors are, it’s safe to say Canadians hold over 75% of their outstanding shares.   

• 10 points - Canadian investors hold 75% of its shares or more.  

• 6 points - Canadian investors hold 50.1% to 74.9% of its shares.

• 3 points - Canadian investors hold 50.0% or less of its shares.

On this criterion, Athabasca gets 10 points. 

How Many of Athabasca’s Employees Are Located in Canada?

As of Dec. 31, 2024, Athabasca had 181 employees. Of those, 101 worked in the field, while 80 were at its head office in Calgary. While it’s not a huge workforce, all 181 are in Canada. 

• 10 points - 75% of its employees are based in Canada. 

• 6 points - 50.1% to 74.9% of its employees are based in Canada. 

• 3 points - Less than 50.0% of its employees are based in Canada. 

On this criterion, Athabasca gets 10 points. 

 Does Athabasca Qualify for the Buy Canadian Index? 

With 40 points, it gets a perfect score. It’s Canadian to the core.  

Disclaimer: The author did not hold a position in any of the securities mentioned above. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research or consult with a licensed financial professional before making any investment decisions. Past performance is not indicative of future results.

Will Ashworth is currently ranked 718 out of 30,957 financial bloggers analyzed by TipRanks, with a 9.7% return on his buy and sell ratings. He is one of the founding contributors to this newsletter.

Will has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.