CALGARY, March 17, 2015 /CNW/ - Athabasca Oil Corporation
(TSX: ATH) ("Athabasca" or the "Company") announces the separation
of the Chair of the Board and Chief Executive Officer ("CEO") role
effective April 20, 2015.
Additionally, in conjunction with the strategic initiatives
outlined in the fall the Company has now also concluded a thorough
review and realignment of its corporate cost structure.
Executive Changes
On October 1, 2014 Mr.
Buchanan, Board Chair, was
appointed President and CEO of the Company replacing Sveinung
Svarte who retired on September 30,
2014. Mr. Buchanan's tenure
as CEO was intended to be short-term for the purpose of assessing
and implementing immediate changes, as required, to the strategic
direction, operation, management and business priorities of the
Company. Mr. Buchanan's objectives
included: (1) working with management to validate Athabasca's business strategy; (2) improving
the Company's cost structure; (3) considering and assessing
strategic opportunities to unlock the potential of Athabasca's substantial resource base and
enhance shareholder value; (4) working with the Compensation and
Governance Committee to enhance the Board's governance structure;
and (5) developing and mentoring Athabasca's talented executive team, including
assessing Mr. Broen's readiness to assume the CEO role. While the
ultimate timeframe needed to achieve these important objectives was
not determinable at the time of his appointment it was intended
that once Mr. Buchanan had
substantially progressed the objectives, Mr. Broen would be
appointed as CEO and Mr. Buchanan
would step back into the Chair role.
The Board believes that with Mr. Buchanan's oversight and guidance as CEO, the
Company has made significant progress on these objectives over the
past several months. The Company has focused its capital allocation
priorities toward its core growth areas of the Kaybob Duvernay in
its Light Oil Division and Hangingstone in the Thermal Oil
Division. In addition, a flexible capital program was
developed for the Light Oil Division to allow Athabasca to manage through market cycles,
preserve its balance sheet strength and better manage capital
resources. Athabasca has also completed a successful review
and realignment of its cost structure resulting in a significant
reduction of annualized general and administration ("G&A")
expense. The Company now has a cost structure that is properly
aligned with its strategic business plan and more competitively
aligned with its peers.
With the objectives largely achieved and in light of the Board's
assessment that Mr. Broen is ready to assume the responsibilities
of CEO, Mr. Buchanan is stepping
down as CEO effective April 20, 2015
and will remain as Chair to continue his focus on the Board's
renewal process. Mr. Broen will assume the President and CEO
role effective April 21, 2015. The
Board expresses its immense gratitude to Mr. Buchanan for having taken on the CEO role, for
his intelligent, astute leadership in guiding Athabasca through some challenging times and
for his commitment to acting in the best interests of the
Company.
Board Renewal Update
Mr. Buchanan played an
instrumental role in the Board renewal process which commenced in
the fall of 2014 and to date has included a full review of the
Board composition, skills assessment and relevant experience. In
January, Mr. Carlos Fierro and Mr.
Paul Haggis were appointed as
independent directors. Both individuals bring extensive financial
and energy sector experience that will be of great value to
shareholders. Effective March 11,
2015 Mr. Haggis was appointed Chair of the Governance and
Compensation Committee.
As Chair, Mr. Buchanan will
continue to play a key role in the ongoing renewal process on
behalf of the Compensation and Governance Committee. This
will include further review of the Board's governance and
leadership structure. The Board expects to conclude its
renewal process within 18 months, after which Mr. Buchanan will step down as Chair and a new
Independent Chair will be appointed.
Cost Realignment
In October 2014, the Company
undertook an initiative to complete a thorough cost structure
review with a goal to streamline costs and better align the
organization to the current operating environment, its capital
plans and growth objectives. The Company has now concluded
its review and has reduced costs in all areas including a reduction
in the size of its head office workforce by approximately 50% since
the beginning of 2014. The Company forecasts a significant
reduction in annualized G&A costs going forward and is
targeting gross G&A of approximately $60
million in 2016. The company also expects to realize
substantial cost savings through streamlining of operations and
lower related service costs.
About Athabasca Oil Corporation
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.
Athabasca's common shares trade on
the TSX under the symbol "ATH". For more information, visit
www.atha.com.
Reader Advisory:
This News Release contains forward-looking information that
involves various risks, uncertainties and other factors. All
information other than statements of historical fact is
forward-looking information. The use of any of the words
"anticipate", "forecast", "plan", "continue", "expect", "will",
"target", "believe", "pursue" and "potential" and similar
expressions are intended to identify forward-looking information.
The forward-looking information is not historical fact, but rather
is based on the Company's current plans, objectives, goals,
strategies, estimates, assumptions and projections about the
Company's business, board structure and future financial results.
This information involves known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information. No assurance can be given that these expectations will
prove to be correct and such forward-looking information included
in this News Release should not be unduly relied upon. This
information speaks only as of the date of this News Release. In
particular, this News Release contains forward-looking information
pertaining to the Company's expectations with respect to its
Board's renewal process, the results of its Board's review of its
governance and leadership structure; the reductions the Company
expects to realize in its general and administrative cost
structure; and the Company's 2016 general and administrative cost
target.
Actual results could differ materially from those anticipated in
this forward-looking information as a result of the risk factors
set forth in the Company's most recent Annual Information Form
("AIF") dated March 11, 2015,
available on SEDAR at www.sedar.com including, but not limited to
the potential for management estimates and assumptions to be
inaccurate.
The forward-looking statements included in this News Release are
expressly qualified by this cautionary statement. Athabasca does not undertake any obligation to
publicly update or revise any forward-looking statements except as
required by applicable securities laws.
SOURCE Athabasca Oil Corporation