Light Oil Division

World Class Light Oil Asset Structured for Growth

Athabasca is targeting its production of light oil and natural gas with associated natural gas liquids (NGLs) to ramp up to between 100,000 boe/day and 130,000 boe/day by 2020.

Athabasca has over 2.7 million acres of Petroleum and Natural Gas rights situated within several prolific geological trends in the province of Alberta. We have strategically positioned our land holdings to target oil and liquids-rich natural gas development in the Montney, Duvernay, Nordegg and Charlie Lake formations.

Consistent with current industry practices, these unconventional resources will be developed utilizing state-of-the-art horizontal drilling and multi-stage fracturing technologies. Characterized by multiple stacked hydrocarbon-bearing zones, the development of these assets involves drilling multiple horizontal wells from common surface facilities. Athabasca is focused on efficiently developing its Light Oil assets, and in delivering value to our shareholders by achieving lower development and operational costs. The Light Oil value-add is illustrated by the scalability, repeatability and potential of this asset.

First light oil production commenced in late 2011. Athabasca expects to complete the tie-in of three batteries during Q4 2012, for an expected exit rate of 10,000 to 11,000 boe/d.

A mid-year review of the Company's drilling, completion and testing program, effective April 30, 2012, resulted in an increase in the Light Oil Division’s total proved plus probable reserves to 20 million boe, comprised of 45% oil and NGLs.*

Athabasca's 2012 multi-well drilling program tested the prospectivity of the Montney, Duvernay and Charlie lake Formations utilizing horizontal drilling and multi-stage fracture technology. The Company drilled 14 wells in the first quarter and completed 16 wells. Results of the Q1 2012 drilling program are excellent, highlighted by the discovery of a potentially prolific Duvernay oil pool at the Company’s Kaybob property.

During Q2 2012, Athabasca conducted multi-stage hydraulic fracture completions on one Montney and one Nordegg well, both with successful results. The Kaybob East 100/04-26-64-18W5M horizontal Montney well was flow tested for 72 hours, producing at a final stabilized rate of approximately 965 boe/d (20% oil) at a flowing pressure of 12,500 kPag, reaffirming the presence of high quality Montney reservoir rock in Athabasca's Kaybob East area.

In Q2 2012, the Company re-tested its previously announced Kaybob Duvernay horizontal oil well at 100/08-18-064-17W5M (previously denoted as 102/07-18-064-17W5M). The well was flowed for another 90 hours, achieving final stabilized rates of 800 boe/d (650 bbl/d of 43° API oil plus 65 bbl/d of NGLs) at a flowing pressure of approximately 7,000 kPag. This production test result represents a significant increase in rates from the original test results (70% increase in oil rate) and a tenfold increase in flowing pressure.

Given positive drilling and production testing results, the Company has increased the capacity of certain facilities and has accelerated infrastructure construction, adding $60-million to its 2012 Light Oil capital budget.

*Based on third party estimates, pro forma, April 30, 2012