Calgary, Alberta – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) announces that it has entered into an underwriting agreement to sell, on a private placement basis, $127.6 million aggregate principal amount of 11.95 percent five-year senior unsecured notes due July 27, 2027 (the “Notes“). The Notes will be issued at a price of $980.00 per $1,000.00 principal amount to receive aggregate gross proceeds of approximately $125 million. The Notes will be direct senior unsecured obligations of Obsidian Energy ranking equal with all other present and future senior unsecured indebtedness of the Company. The Notes were offered in each of the provinces of Canada and in the United States on a private placement basis without the filing of a prospectus or registration statement (the “Offering“). Closing of the Offering is expected to occur on or about July 27, 2022, subject to satisfaction of customary closing conditions. Certain directors, officers and employees of Obsidian Energy have elected to purchase approximately $6.4 million of the Notes.
Subject to completion of the Offering, the net proceeds of the Offering, together with all initial draws on new credit facilities to be entered into by the Company, will be used to repay all of our existing senior secured notes, in accordance with the terms thereof, repay the outstanding balances under our existing credit facilities, and repay the PROP limited recourse loan due on December 31, 2022, which was incurred by the Company in connection with our 2021 acquisition of the remaining 45 percent interest in the Peace River Oil Partnership.
RBC Capital Markets and BMO Capital Markets are acting as joint bookrunners for the Offering. The Notes are not qualified for distribution to the public or registered under the securities laws of any province or territory of Canada or in the United States. They are only offered in the provinces of Canada and in the United States pursuant to applicable exemptions from the prospectus and registration requirements thereunder.