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Obsidian Energy Ltd. (TSX: OBE, NYSE American: OBE) is a distinguished intermediate-sized oil and gas producer headquartered in Calgary, Alberta. Specializing in the exploration, development, and production of oil and natural gas in the Western Canada Sedimentary Basin, Obsidian Energy boasts a balanced portfolio of high-quality assets. The company produces approximately 30,000 barrels of oil equivalent (boe) per day, representing a significant player in the energy industry.
Originally established as Penn West Petroleum Ltd., the company underwent a transformative rebranding in June 2017 to become Obsidian Energy Ltd. This change was accompanied by a strategic overhaul that reinforced the company's commitment to operational discipline, accountability, and shareholder value.
Obsidian Energy operates primarily in Alberta, with notable assets in the Cardium, Viking, and Peace River Arch regions. The Cardium area, particularly the Pembina and Willesden Green fields, is a cornerstone of the company's light oil production, offering robust returns and low-decline assets. The Peace River assets, focused on heavy oil production from the Bluesky and Clearwater formations, provide substantial growth potential and diversification.
Recent achievements underscore Obsidian Energy's proactive approach to growth and optimization. In early 2024, the company successfully repurchased and canceled a portion of its Senior Unsecured Notes, reducing debt and enhancing financial flexibility. Additionally, Obsidian Energy renewed its normal course issuer bid (NCIB), allowing the repurchase of up to 10% of its public float, reflecting confidence in its underlying value.
Operational achievements include the development of the Willesden Green/Pembina (Cardium) assets and significant exploration and appraisal drilling in the Clearwater and Bluesky formations. These projects have led to increased production rates and enhanced the company's asset value. Notably, the Pembina four-well Pad achieved strong initial production rates, confirming the area's potential for additional development.
Financially, Obsidian Energy reported solid first-quarter results for 2024, with funds flow from operations (FFO) reaching $84.4 million, despite a challenging commodity price environment. The company continues to prioritize cost management, reporting lower net operating costs and maintaining a disciplined approach to capital expenditures.
Looking ahead, Obsidian Energy is poised to continue its growth trajectory. The company recently announced a strategic acquisition in the Peace River area, adding 1,700 boe/d of Clearwater production and 148 net sections of land. This acquisition enhances Obsidian Energy's already substantial land base and aligns with its three-year corporate growth plan aimed at creating significant shareholder value.
Obsidian Energy's shares are traded on both the Toronto Stock Exchange and the NYSE American exchange under the symbol 'OBE'. The company remains committed to disciplined growth, operational excellence, and creating long-term value for its stakeholders.
Obsidian Energy (TSX: OBE) has received TSX approval to renew its Normal Course Issuer Bid (NCIB), allowing the purchase of up to 7,144,408 common shares (10% of public float) over 12 months starting March 3, 2025. The program will expire on March 2, 2026.
Daily purchases on TSX are to 55,460 shares, with block purchase exceptions allowed weekly. Under the current NCIB expiring February 28, 2025, the company has already repurchased 4,164,820 shares at an average price of $9.32 per share.
The company believes its share price occasionally undervalues the business, making share repurchases an attractive opportunity to enhance per-share metrics. An automatic securities purchase plan has been established with a designated broker to facilitate purchases during blackout periods.
Obsidian Energy (TSX: OBE, NYSE American: OBE) has launched a cash offer to purchase up to $3.0 million of its outstanding 11.95% Senior Unsecured Notes due July 27, 2027. As of February 26, 2025, $114.2 million aggregate principal amount of Notes were outstanding.
The offer will expire on March 11, 2025, at 5:00 p.m. EDT. Holders of validly tendered and accepted Notes will receive $1,030 per $1,000 principal amount, plus accrued and unpaid interest. Settlement is expected on March 14, 2025.
If the aggregate purchase price exceeds the Maximum Purchase Consideration, the company will accept Notes on a pro rata basis. The offer is not conditional on any minimum amount of Notes being tendered, and Obsidian Energy may amend, extend, terminate, or increase the Maximum Purchase Consideration at its discretion.
Obsidian Energy (TSX: OBE) (NYSE American: OBE) has announced the filing of its 2024 year-end disclosure documents with Canadian securities regulatory authorities. The company has submitted its:
- Audited Consolidated Financial Statements for the year ended December 31, 2024
- Management's Discussion and Analysis (MD&A)
- Annual Information Form including reserves data and oil/gas information
- Annual Report on Form 40-F (to be filed with U.S. SEC)
These documents are accessible electronically through SEDAR+, EDGAR, and the company's website. Hard copies of the financial statements and MD&A are available upon request through Investor Relations.
Obsidian Energy announced its first half 2025 capital program and guidance, focusing on Peace River asset development with a plan of 38 net operated wells. The company will allocate $185-195 million in capital expenditures, including $24 million for exploration/appraisal drilling and $11 million for waterflood projects, plus $11-12 million for decommissioning.
First half production is expected to average approximately 33,800 boe/d, a 3% decrease from H1 2024 primarily due to the disposition of operated Pembina assets to InPlay Oil Corp., resulting in the net sale of approximately 10,000 boe/d of production. The company's strategy remains focused on driving heavy oil production growth at Peace River to approximately 25,000 boe/d in 2026.
The capital program includes Clearwater waterflood initiatives to support future growth, with six drilling rigs currently active. Peace River production grew substantially in 2024, with Clearwater output increasing from 447 boe/d in January 2024 to over 4,500 boe/d in December 2024. The company expects to provide full-year guidance in June after evaluating development plans for the second half of 2025.
Obsidian Energy (TSX: OBE) (NYSE American: OBE) announced strong results for Q4 and full-year 2024, with funds flow from operations (FFO) increasing 14% to $432.0 million ($5.69 per share) compared to 2023. Average production grew 16% to 37,474 boe/d, exceeding the company's guidance.
The company executed a $343.1 million capital program in 2024, focusing on developing its Peace River heavy oil assets while maintaining production in light oil assets. This resulted in substantial reserve increases across all categories, replacing 148% of 2024 production on a proved developed producing basis.
Obsidian remained active in its share buyback program, repurchasing and cancelling 4.5 million shares (6% of outstanding) for $41.7 million in 2024. The company also reduced operating costs to $13.85 per boe (down from $14.21 in 2023) and G&A costs to $1.50 per boe (down from $1.61).
In February 2025, Obsidian announced the sale of its Pembina assets to InPlay Oil Corp. for approximately $320 million, with proceeds expected to pay down debt. Net debt increased to $411.7 million at year-end 2024, primarily due to the $80.5 million Peace River Clearwater Acquisition.
Obsidian Energy (TSX: OBE, NYSE: OBE) has announced a definitive agreement to sell its operated Pembina assets to InPlay Oil Corp. for approximately $320 million, comprising $220 million in cash, $85 million in InPlay shares, and InPlay's 34.6% interest in the Willesden Green Cardium Unit #2 field valued at $15 million.
The transaction will significantly reduce Obsidian's debt from $412 million to approximately $192 million. Post-transaction, Obsidian will maintain a production base of over 29,000 boe/d, with Peace River becoming its largest asset. The company will retain its non-operated holdings in Pembina Cardium Unit #11.
The deal represents approximately 2.7x 2024E net operating income and involves the sale of approximately 10,300 boe/d average production. The transaction is expected to close in early Q2 2025, subject to regulatory approvals and other conditions.
Obsidian Energy (TSX: OBE) (NYSE American: OBE) announced significant reserves growth for 2024, with reserve replacement of 146%, 229%, and 296% of production across PDP, 1P, and 2P reserves respectively. The company's 1P reserve value increased 23% per share to $2.3 billion (before-tax, discounted at 10%).
Key achievements include adding 107 new locations to Peace River reserves, bringing the total to 160 net locations. The company's before-tax net present value (NPV10) showed strong growth: PDP increased 9% to $1.6 billion, 1P increased 17% to $2.3 billion, and 2P increased 20% to $3.1 billion.
The company demonstrated improved efficiency with F&D costs including FDC at $19.55/boe for PDP, $19.27/boe for 1P, and $16.31/boe for 2P. Recycle ratios were strong at 1.7x for PDP, 1.8x for 1P, and 2.1x for 2P, based on expected 2024 operating netback of $33.86/boe.
Obsidian Energy (TSX: OBE, NYSE: OBE) reports strong operational results for 2024, with estimated average production of 37,450 boe/d exceeding guidance range and representing a 16% increase over 2023. Fourth quarter 2024 production averaged approximately 40,000 boe/d.
The company completed 66 operated wells in 2024, with significant success in Peace River's Clearwater formation, where production grew from 99 boe/d in January 2023 to over 4,500 boe/d in December 2024. Notable achievements include the Peavine 8-13 Pad achieving an average 30-day initial production rate of 302 boe/d per well, and strong performance from the Pembina two-well 12-19 Pad producing over 1,100 boe/d.
The company currently has six drilling rigs in operation and plans to announce its first half 2025 capital program and guidance on February 5, 2025, as it progresses toward its goal of achieving 50,000 boe/d of production during 2026.
Obsidian Energy (OBE) reported strong Q3 2024 results with funds flow from operations of $124.7 million ($1.64 per share), a 34% increase per share compared to Q3 2023. Average production grew 21% year-over-year to 39,714 boe/d, driven by 64 wells brought online in the first nine months. The company achieved milestone production of over 40,000 boe/d in September. Net income was $33.2 million ($0.44 per share). The company maintained its share buyback program, repurchasing 1.0 million shares for $9.3 million in Q3. Capital expenditures were $85.5 million, focused on Peace River and Pembina development.
Obsidian Energy (TSX: OBE) (NYSE American: OBE) announced it will release its third quarter 2024 financial and operational results before North American markets open on Thursday, October 31, 2024. The company will make available its third quarter management's discussion and analysis and unaudited consolidated financial statements on their website, SEDAR+, and EDGAR platforms.
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