Calgary, Alberta – OBSIDIAN ENERGY LTD. (TSX: OBE) (OTCQX: OBELF) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to announce that we expect to start our 23 well, second half 2021 development program two weeks earlier than anticipated. In addition, following our upcoming Annual and Special Meeting on June 16, 2021, we will hold a webcast presentation that provides a corporate update from our Interim President and CEO, Mr. Stephen Loukas, and other members of management.
Our second half 2021 development program will begin with our Cardium 1-33 Open Creek two-well pad in our East Crimson asset, with our first well expected to spud on June 16. By constructing padsites earlier in the year, we are able to capitalize on the favourable ground and weather conditions this spring and begin our second half development program two weeks earlier than anticipated.
“We’re excited to start our second half program early,” said Mr. Loukas. “Our two-rig continuous drilling program will build on the strong results of our first half program that includes some new drilling records and pacesetter wells. The continued strength in commodity prices and recent market dynamics are highly encouraging, providing additional potential value to the Company through our significant capability to scale our development drilling, pay down debt and act on opportunities as we identify them.”
We expect to drill 23 wells (20.6 net) in our two-rig continuous drilling program in the remainder of 2021, predominantly in our Willesden Green and Pembina Cardium assets. Combined with the nine (9.0 net) wells drilled in our first half 2021 program (including one well rig-released in December 2020), we expect to bring 25 wells (22.8 net) on production in 2021 with the remaining seven wells (6.8 net) expected on production early in the first quarter of 2022.
In addition, we brought the first of three Cardium wells on stream today at our four-well 6-21 Faraway pad in our East Crimson area. The other two wells are expected to be brought on stream this week. The fourth well on this pad is expected on production by mid-June, delayed by an investigation of a downhole mechanical issue. With these four wells active, our entire nine-well first half program will be on production.
The Company has the following financial oil and gas contracts in place on a weighted average basis:
|Oil – WTI|
|April 2021||5,525 bbl/d||$77.90/bbl|
|May 2021||5,956 bbl/d||$79.67/bbl|
|June 2021||5,483 bbl/d||$80.64/bbl|
|Natural Gas – AECO|
|April 2021||26,065 mcf/d||$2.83/mcf|
|May 2021||21,326 mcf/d||$2.68/mcf|
|June 2021||21,326 mcf/d||$2.67/mcf|
|July – October 2021||21,326 mcf/d||$2.57/mcf|
Additionally, the Company has the following physical contracts in place:
|Physical Oil Contracts1|
|WTI||571 bbl/d||Apr – Jun 2021||$59.04/bbl|
|Light Oil Differential2 3|
|1,245 bbl/d||Apr – Jun 2021||$5.51/bbl|
|1,280 bbl/d||Jul – Sep 2021||$5.82/bbl|
|Light Oil Differential – USD2|
|1,556 bbl/d||Apr – Jun 2021||US$4.00/bbl|
|1,539 bbl/d||Jul – Sep 2021||US$4.42/bbl|
|Heavy Oil Differential4|
|564 bbl/d||Jul – Sep 2021||$14.85/bbl|
|Heavy Oil Differential5 – USD|
|550 bbl/d||Jul – Sept 2021||US$26.00/bbl|
(1) WTI, differentials and foreign exchange hedged to lock-in positive net operating income on certain heavy oil properties.
(2) Differentials completed on a WTI – MSW basis.
(3) USD transactions completed on a US$ WTI – US$ MSW basis and converted to Canadian dollars using a fixed foreign exchange ratio of CAD/USD $1.281 in the second quarter of 2021 and $1.279 in the third quarter of 2021.
(4) Differentials completed on a WTI – WCS basis.
(5) Hedged on a USD basis and inclusive of WCS differential, quality and transportation charges.
ANNUAL AND SPECIAL MEETING
The Company’s Annual and Special Meeting (“Meeting“) is scheduled for Wednesday, June 16, 2021 at 9:00 am (Mountain Daylight Time) at the offices of Obsidian Energy. Access to the Meeting will, subject to Company’s by-laws, be limited to essential personnel and registered shareholders and proxyholders entitled to attend and vote at the Meeting.
Due to restrictions on gatherings implemented by the Government of Alberta in response to the COVID-19 (Coronavirus) outbreak, guidelines issued with respect to social distancing and out of concern for the wellbeing of all participants, we strongly recommend that registered shareholders not attend the meeting in-person. Any person attending the Meeting in person will be required to follow the Company’s health and safety measures, which will include physical distancing, use of personal protective equipment (including facemasks) and completion of a health-assessment. The precautionary measures being taken by the Company are intended to reduce the potential risks associated with the COVID-19 pandemic, and they may be further updated as necessary to incorporate evolving recommendations and directives of public health authorities.
Additional information about the Meeting can be found on our website.
YOUR VOTE IS IMPORTANT – PLEASE VOTE TODAY
The Board of Directors recommend that Shareholders vote FOR the proposed resolutions. Submit your vote in advance of the proxy deposit deadline of 9 a.m. (Mountain Daylight Time) on Monday, June 14, 2021.
UPDATED CORPORATE PRESENTATION AND WEBCAST
In association with the Meeting, our Interim President and CEO, Mr. Stephen Loukas and other members of management will host a webcast presentation online on Wednesday, June 16, 2021 at 10:30 am Mountain Daylight Time (12:30 p.m. Eastern Daylight Time) (the “Presentation“).
The Presentation will be broadcast live on the Internet and may be accessed either through our website or directly at the webcast portal. Those who wish to listen to the Presentation should connect five to 10 minutes prior to the scheduled start time through the following numbers:
Canada / USA: 1-800-319-4610 (toll-free)
A question and answer session will be held following the Presentation. If you wish to submit a question to the Company, participants can do so ahead of time after registering on the webcast portal on the Intranet or by emailing questions to email@example.com. The updated corporate presentation and Presentation will be available for replay on our website, www.obsidianenergy.com.