Athabasca Oil to shut down Hangingstone oilsands project and cut staff

Athabasca Oil Corp. is suspending operations at its Hangingstone SAGD oilsands project due to the drop in oil prices and the COVID-19 pandemic.

The Calgary-based company says it's also reducing its corporate staff by 15 per cent.

The shutting down of Hangingstone involves shutting-in the well pairs and halting steam injection to the reservoir as well as ensuring that the processing facility and pipelines can be restarted in the future.

Athabasca says the project has an operating break-even price of approximately $37.50 US per barrel for Western Canadian Select, which was trading for $9.92 per barrel midday.

The company says it now expects to produce 30,000 to 31,500 barrel of oil equivalent per day this year, down by about 2,500 barrels related to the shut-in.

Hangingstone began construction in 2013 and was commissioned in 2015.