Athabasca Oil (TSE:ATH) Stock Jumps 13.9% – Here’s Why

Athabasca Oil Co. (TSE:ATH) shot up 13.9% during mid-day trading on Monday. The company traded as high as C$12.23 and last traded at C$12.05. 12,065,697 shares changed hands during mid-day trading, an increase of 383% from the average daily volume of 2,498,698 shares. The stock had previously closed at C$10.58.

Key Athabasca Oil News

Here are the key news stories impacting Athabasca Oil this week:

• Positive Sentiment: Takeover premium supports ATH: The C$12.00-per-share offer is the primary catalyst for the stock’s increase, as investors revalue Athabasca toward the proposed transaction price. Consideration will consist of approximately 65% cash and 35% Cenovus shares, with shareholders able to elect their preferred mix, subject to allocation limits. Athabasca Oil Announces Agreement to Be Acquired by Cenovus Energy
• Positive Sentiment: Strategic value for Cenovus: The transaction has an implied enterprise value of roughly C$5.7 billion, with media reports citing an equity value near C$4 billion. Cenovus would add approximately 45,000 barrels of oil equivalent per day and expand its Canadian oil-sands footprint, creating potential economies of scale and operating synergies. Cenovus to Buy Athabasca Oil in C$5.7 Billion Cash-and-Stock Deal
• Neutral Sentiment: Transaction structure and timing: The acquisition remains subject to customary shareholder, court and regulatory approvals. ATH shareholders receiving Cenovus shares will retain exposure to oil prices and Cenovus’s future performance rather than receiving entirely cash proceeds. Cenovus Energy Agrees to Acquire Athabasca Oil
• Negative Sentiment: Limited upside may remain: Because ATH is trading near the offer value, further gains may depend largely on deal completion. Cenovus shares reportedly weakened on the announcement, reflecting investor concerns about acquisition costs, dilution and integration risk. Cenovus Bets $4 Billion on Athabasca

Wall Street Analysts Forecast Growth

ATH has been the subject of a number of research analyst reports. BMO Capital Markets lowered Athabasca Oil from an “outperform” rating to a “hold” rating and set a C$12.50 target price for the company. in a research note on Wednesday, September 16th. Desjardins set a C$12.50 price target on Athabasca Oil and gave the company a “hold” rating in a research note on Friday, July 17th. Finally, Royal Bank Of Canada set a C$12.00 price objective on Athabasca Oil and gave the company a “sector perform” rating in a report on Thursday, September 10th. Three investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and an average price target of C$11.56.

Athabasca Oil Stock Performance

The company has a quick ratio of 1.24, a current ratio of 1.90 and a debt-to-equity ratio of 10.95. The firm has a market cap of C$5.81 billion, a price-to-earnings ratio of 25.68, a P/E/G ratio of -0.51 and a beta of -0.17. The business’s 50-day simple moving average is C$10.57 and its two-hundred day simple moving average is C$10.83.

Athabasca Oil (TSE:ATH) last released its quarterly earnings results on Thursday, July 30th. The oil and gas exploration company reported C$0.13 earnings per share for the quarter. The company had revenue of C$306.54 million during the quarter. Athabasca Oil had a return on equity of 12.57% and a net margin of 17.68%. As a group, sell-side analysts expect that Athabasca Oil Co. will post 0.5403473 earnings per share for the current fiscal year.

Insider Transactions at Athabasca Oil

In related news, insider Athabasca Oil Corporation purchased 48,700 shares of the business’s stock in a transaction that occurred on Tuesday, September 29th. The stock was bought at an average price of C$10.28 per share, with a total value of C$500,636.00. Following the acquisition, the insider owned 985,700 shares in the company, valued at C$10,132,996. The trade was a 5.20% increase in their ownership of the stock. Over the last 90 days, insiders have acquired 1,150,600 shares of company stock valued at $12,167,863. 0.24% of the stock is currently owned by company insiders.

About Athabasca Oil

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 light oil assets are held in a private subsidiary (Duvernay Energy Corporation) in which Athabasca owns a 70% equity interest. Athabasca’s common shares trade on the TSX under the symbol ‘ATH’.