Athabasca Oil Corporation announced that it has entered into an agreement with Murphy Oil Company Ltd. to form a strategic joint venture to develop the Duvernay and Montney in the Kaybob area. Greater Kaybob Assets: Athabasca is selling a 70% working interest in production, acreage and infrastructure within the Greater Kaybob area. Murphy will assume operatorship under a Joint Development Agreement of these assets which includes approximately 200,000 acres of prospective Duvernay land across the condensate rich and volatile oil windows.

December gross production within this area averaged approximately 6,900 boe/d. Greater Placid Assets: Athabasca is selling a 30% working interest in production, acreage and infrastructure within the Greater Placid area. Athabasca will be operator of the Montney within this area under a JDA which includes approximately 60,000 acres of prospective Montney land. Specifically, Athabasca is establishing a core area at Placid where it has high graded 25,000 acres in the Montney in two separate intervals.

December gross production within this area averaged approximately 900 boe/d. CAD 475 million Net (CAD 800 million gross) Consideration: Murphy will pay approximately CAD 250 million in cash to Athabasca at closing. Additional consideration of CAD 225 million will be in the form of a capital carry in the Duvernay whereby Murphy will fund 75% of Athabasca's share of development capital up to a maximum five year period. Expected gross capital investment over this time period will be approximately CAD 1 billion in the Duvernay with flexibility on spending as commodity prices recover.

Midstream Infrastructure: Athabasca will retain operatorship of the regional midstream infrastructure in the near term. Key Dates: The effective date of the transaction is January 1, 2016. Closing is expected in late first quarter 2016 and is subject to meeting certain conditions and regulatory approvals.

Balance Sheet Strength: At closing, Athabasca forecasts approximately $900 million of liquidity (cash & equivalents and the last promissory note from Brion Energy) with a net cash position of approximately $80 million adjusted for debt. The balance sheet will be further bolstered by the $225 million capital carry in the Duvernay over the mid-term.