ATHOF - Athabasca Oil: Expect A Free Cash Flow Of In Excess Of C$0.20 Per Share
- Athabasca Oil has successfully refinanced its 2022 debt, but at less favorable terms than I had hoped for.
- The warrants that were issued as a 'sweetener' will increase the share count by 15%, but will bring in more cash - if exercised.
- 75% of the free cash flow will be used to retire the new senior notes, which will cause the interest expenses to decrease very fast.
- Once half of the senior notes will have been retired, the impact of the higher share count (upon the exercise of the warrants) will have been neutralized.
- Athabasca Oil needs US$50 oil to break even but offers excellent leverage if you believe in higher oil prices.
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Athabasca Oil: Expect A Free Cash Flow Of In Excess Of C$0.20 Per Share