Ninepoint Partners Achieves 6,500% Return on Athabasca Oil Stake

Ninepoint Partners LP achieved a remarkable 6,500% return on its investment in Athabasca Oil Corp. after the company was acquired by Cenovus Energy Inc. in a deal valued at approximately $1.1 billion. Ninepoint Partners initially acquired a nearly 10% stake in Athabasca Oil in early 2021, at a time when crude oil prices were around $50 per barrel and Athabasca's stock was trading at penny-stock levels due to its significant debt. The investment firm's strategic timing and foresight allowed it to capitalize on the subsequent recovery and eventual acquisition of Athabasca Oil.

The acquisition by Cenovus Energy, announced in March 2024, saw Athabasca shareholders receive $1.32 per share in cash, representing a substantial premium over the company's trading price prior to the announcement. For Ninepoint Partners, this translated into a significant profit, underscoring the success of its contrarian investment strategy. The fund manager had accumulated its position in Athabasca Oil when the company was facing considerable financial challenges, including a high debt load and depressed commodity prices. This period of distress presented an opportunity for Ninepoint to acquire shares at a significantly discounted valuation.

Athabasca Oil Corp. is an energy company focused on the exploration and production of heavy crude oil in Alberta, Canada. Prior to its acquisition, the company was known for its assets in the MacKay River and Hangingstone areas of Alberta. The company had been working to deleverage its balance sheet and improve operational efficiency in the years leading up to the Cenovus deal. The acquisition by Cenovus Energy, a larger and more financially robust energy producer, was seen as a logical consolidation within the Canadian oil sector, creating a more streamlined and competitive entity.

Ninepoint Partners LP is a Canadian alternative asset manager that specializes in providing investors with access to a diverse range of investment strategies, including private equity, venture capital, and hedge funds. The firm is known for its active management approach and its ability to identify undervalued assets in various market conditions. The substantial return generated from the Athabasca Oil investment highlights the firm's expertise in identifying distressed opportunities and its capacity to generate significant alpha for its investors. The deal with Cenovus Energy is expected to close in the second quarter of 2024, subject to customary closing conditions and regulatory approvals.