• 2023 capital expenditures includes development and exploration/appraisal programs with optionality for second half expansion
• 46 well development program across all core areas in 2023 expected to generate seven percent growth in production over 2022 and significant free cash flow at WTI US$80/bbl
• Board approves share buyback program for up to 10 percent of shares outstanding
• Reserve replacement of 144 percent, 214 percent and 393 percent of 2022 production on a proved developed producing, total proved, and total proved plus probable basis, respectively
Calgary, Alberta–(Newsfile Corp. – January 30, 2023) – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to announce our 2023 guidance that builds on our successful 2022 drilling results across all three areas, the introduction of a share buyback program, and the results of our independent reserves evaluation for the year ended December 31, 2022 (the “2022 Reserve Report“).
“Our 2022 drilling success positions us to continue to deliver both year-over-year production growth and strong free-cash flow generation in 2023,” said Stephen Loukas, Obsidian Energy’s Interim President and CEO. “Since introducing our 2023 preliminary forecast, we have seen a decline in oil prices, continued service cost inflation, and widening of heavy oil differentials, as well as a decline in our share price such that it trades materially below intrinsic value. Accordingly, our 2023 strategy now focuses on a balance between several components, including capital for development and exploration/appraisal wells, continued debt reduction and return of capital to shareholders via a share buyback, while also preserving acquisition optionality. The majority of our 2023 capital is allocated to core development but includes a component to further delineate our large land base, mainly in the Clearwater formation in the Peace River area. Our program optionality allows us to quickly adjust depending on well results, changes in commodity prices, and acquisition opportunities. We look forward to executing on our plans to create future value for our shareholders and the Company.”
Stephen Loukas continued, “We had an active year in 2022 with a successful capital program that was expanded mid-year and includes the acquisition of additional land in the Peace River area. These results, combined with higher commodity price forecasts, led to a substantial increase in our reserve values and volumes over 2021, replacing reserves across all categories. This represents the sixth year in a row of greater than 100 percent reserve replacement on total proved (“1P“) reserves and total proved plus probable (“2P“) reserves, excluding acquisitions and dispositions, and economic factors. As a result, our proved developed producing (“PDP“) and 1P reserve net present values increased by $438 million to $1.6 billion, and $700 million to $2.1 billion, respectively, at December 31, 2022 (before tax, discounted at 10 percent).”
2023 GUIDANCE
With a strong start to our 2023 development program, Obsidian Energy expects to grow average production to approximately 32,000 to 33,500 boe/d in 2023 – a seven percent increase from 2022 at the mid-point. While still growing production, we are electing to moderate our capital spending and growth profile in this environment of increasing service costs and WTI crude oil prices, which are approximately US$20 per barrel lower from mid-year 2022 levels. At this time, we prefer to redirect capital previously earmarked for development towards the initiation of a normal course issuer bid (“NCIB“).
We are pleased with our 2022 results, which will be announced in February and are reflected in the increases in our 2022 Reserve Report. Our fourth quarter 2022 capital program remained active despite extreme cold weather in December that hampered operations and production. Fourth quarter capital was approximately $97 million, bringing full year capital slightly below our 2022 guidance at $319 million (including the Peace River gas plant acquisition in September). Production averaged 31,742 boe/d for the fourth quarter, bringing full year 2022 production to 30,682 boe/d, which is slightly below the low end of guidance of 30,800 boe/d due to the impact of the cold weather on operations and facilities. Concerning wells spud in 2022, three wells (2.9 net) were rig released in January 2023 and eight (7.8) net wells are expected to be brought on production in 2023.
During 2023, the Company is planning between $260 and $270 million in capital expenditures for development and exploration/appraisal activities, plus an additional $26 to $28 million in decommissioning expenditures that accelerates our asset retirement obligations (decommissioning expenditures are higher in 2023 than in 2022 as the Alberta Energy Regulator increased industry spend targets for oil and gas companies in Alberta). Capital expenditures are primarily focused on development wells in all areas and incorporate the impact of inflationary pressures on drilling consumables and service costs, which were approximately 30 percent higher at the end of 2022 compared to 2021. Obsidian Energy has contracted rigs and services for the first half 2023 program to minimize the impact of future inflation. Our active first quarter 2023 development program will continue the momentum from the 2022 program, resulting in production growth and expected strong free cash flow. Should commodity prices be favourable, we are well positioned to act on opportunities and adjust the program upward during the second half of the year.
Net operating expenses are expected to be slightly lower than 2022 levels as higher production helps offset the impacts of inflationary pressures and planned facility turnaround activity during the year. Free cash flow (“FCF“) generated in 2023 will be directed toward further debt reduction and to shareholders through the NCIB, resulting in a 2023 net debt to funds flow from operations (“FFO“) of approximately 0.5 times (prior to any shares repurchased under an NCIB). Any FCF above expected guidance levels could be allocated towards additional development and exploration/appraisal activities, potential acquisitions and/or additional shareholder return of capital. Our full year 2023 guidance is presented below.
2023E Guidance | ||||
Production1 | boe/d | 32,000 – 33,500 | ||
% Oil and NGLs | % | 67% | ||
Capital expenditures2 | $ millions | 260 – 270 | ||
Decommissioning expenditures | $ millions | 26 – 28 | ||
Net operating costs | $/boe | 13.50 – 14.40 | ||
General & administrative | $/boe | 1.60 – 1.70 | ||
Based on midpoint of above guidance | ||||
WTI Range | US$/bbl | 80.00 | ||
AECO | CAD$/GJ | 3.00 | ||
FFO3 | $ millions | 395 | ||
FCF (prior to NCIB) | $ millions | 105 | ||
Net debt (prior to NCIB)4 | $ millions | 215 | ||
Net debt to FFO4 | times | 0.5 |
(1) Mid-point of guidance range: 12,330 bbl/d light oil, 6,885 bbl/d heavy oil, 2,565 bbl/d NGLs and 65.8 mmcf/d natural gas. Average production volumes include a minimal amount of forecasted production associated with exploratory capital expenditures.
(2) Capital expenditures include approximately $25 million for exploration/appraisal well activity with minimal impact on forecasted production volumes.
(3) Pricing assumptions outlined are forecasted for the full year of 2023 and include risk management (hedging) adjustments as of January 27, 2023. Guidance FFO and FCF includes approximately $6 million of estimated charges for full year 2023 related to the deferred share units, performance share units and non-treasury incentive plan cash compensation amounts which are based on a share price of $9.00 per share.
(4) Net debt figures estimated as at December 31, 2023, prior to the impact of any share purchased under the NCIB.
Guidance Sensitivity Table | |||
Variable | Range | Change in 2023 FFO ($ millions) | |
WTI (US$/bbl) | +/- $1.00/bbl | 8.6 | |
MSW light oil differential (US$/bbl) | +/- $1.00/bbl | 5.5 | |
WCS heavy oil differential (US$/bbl) | +/- $1.00/bbl | 3.1 | |
Change in AECO ($/GJ) | +/- $0.25/GJ | 3.2 |
2023 CAPITAL PROGRAM
Our 2023 program incorporates activity in all three areas, including first quarter 2023 development drilling in Viking following the successful step-out well in 2022 and an expanded Clearwater exploration/appraisal program in Peace River to further assess our extensive land position. With rigs and services contracted, the first half 2023 program is well underway with five rigs in the process of drilling 25 wells (24.8 net) of our 46 well (44.2 net) operated program that includes:
- Seven Cardium wells (6.8 net) in Willesden Green and Pembina
- Three Bluesky development wells (3.0 net) and two (2.0 net) exploration/appraisal wells in Peace River
- Two Clearwater exploration/appraisal wells (2.0 net) in Peace River
- 11 wells (11.0 net) in the Viking area
Obsidian Energy also plans to drill up to four vertical non-productive oil sands exploration wells to collect additional reservoir data in the Peace River area. In addition to the 2023 program wells, three wells (2.9 net) from our 2022 development program were rig-released in 2023, and eight wells (7.8 net) are expected to come on production in early 2023. We expect to further optimize the second half 2023 program as new results from offset wells and first half exploration/appraisal drilling provide additional information.
Development gross (net) wells |
Exploration/Appraisal gross (net) wells |
Total 2023 |
|||||
H1 | H2 | Total | H1 | H2 | Total | Program | |
Willesden Green (Cardium) | 5 (5.0) | 6 (6.0) | 11 (11.0) | – | – | – | 11 (11.0) |
Pembina (Cardium / Devonian) | 2 (1.8) | 6 (4.4) | 8 (6.2) | – | – | – | 8 (6.2) |
Peace River (Bluesky) | 3 (3.0) | 7 (7.0) | 10 (10.0) | 2 (2.0) | – | 2 (2.0) | 12 (12.0) |
Peace River (Clearwater) | – | – | – | 2 (2.0) | 2 (2.0) | 4 (4.0) | 4 (4.0) |
Viking | 11 (11.0) | – | 11 (11.0) | – | – | – | 11 (11.0) |
TOTAL | 21 (20.8) | 19 (17.4) | 40 (38.2) | 4 (4.0) | 2 (2.0) | 6 (6.0) | 46 (44.2) |
(1) Three wells (2.9 net) were spud in 2022 and rig-released in 2023; they are included in these totals.
(2) 45 wells (43.0 net) rig-released in 2023 are expected to be brought on production by the end of 2023 with one well expected in early 2024.
Additional detail regarding our planned 2023 activity is as follows:
- Peace River: Continuing on the success of our development of the Bluesky formation, we plan to drill an additional 12 Bluesky wells (12.0 net) in 2023. Two wells (2.0 net) are exploration/appraisal wells planned for the first quarter of 2023 to delineate and further expand our Bluesky play. The first well on the Walrus 16-20 Pad was successfully rig-released in mid-January; it encountered excellent reservoir quality and is being brought on production. A second well is currently being drilled to further delineate the South Walrus area. This provides the opportunity for additional follow up locations in the area, including on land purchased in 2022.With approximately 500 sections of prospective Clearwater and Bluesky formation rights, Obsidian Energy plans exploration/appraisal drilling in both formations to further delineate the multizone heavy oil potential in the area. Spud in mid-December 2022, the Dawson Clearwater well (1.0 net) encountered good quality reservoir with oil quality of 12.4o API, providing key information for our 2023 program. The Company currently plans to drill four Clearwater wells (4.0 net) in 2023, following up on the information gained from our 2022 activity.
- Willesden Green: We plan to drill 11 wells (11.0 net) targeting the Cardium formation in Willesden Green to follow up on the success of our 2022 program, which exceeded expectations and achieved notable top Alberta production rates at our 3-03 Pad and 4-17 Pad. Willesden Green continues to provide strong high quality economic results for the Company.In 2023, we will also focus on managing facility capacity from new production additions across our Cardium areas (Willesden Green and Pembina). At the same time, we will be utilizing existing pads to lower capital and help mitigate the impact of inflation and higher service costs.
- Pembina: In late December 2022, we brought on a strong three-well pad at Lodgepole in the Pembina area. We will continue our successful development in this area with eight wells (6.2 net) planned for 2023, including two low-cost Devonian vertical wells in the second half of the year on new land acquired in 2022.
- Viking: Continuing the success of our re-entry into Viking in 2022, we plan to drill 11 wells (11.0 net) in the first half of 2023 prior to spring break-up. These wells will follow-up the 2022 step-out well that tested the western extent of the play and displayed strong production rates with a shallower decline, resulting in faster payouts and strong economic returns. The 2023 program will extend our Viking footprint to the west, offsetting the step-out well with a full development program and associated infrastructure. Future producing locations in the western portion of the field will be refined and developed as we incorporate the results of our early 2023 drilling program, which is expected to be brought on production towards the end of the first quarter.
RETURN OF CAPITAL
Obsidian Energy is committed to returning capital to our shareholders. Execution of our corporate plans over the last several years and our 2023 guidance is expected to generate FCF and liquidity to allow us to achieve this goal. Based on our guidance, net debt to FFO is expected to be well below 1.0 times in 2023, and the strength of our 2022 Reserves Report and operations provides us the opportunity to further enhance our liquidity position.
Our Board of Directors have authorized a NCIB of up to 10 percent of our public float, which we are applying to the Toronto Stock Exchange (“TSX“) for approval. To enhance our liquidity, we are pursuing increasing our debt capacity, which will facilitate execution under a NCIB. Any NCIB purchases will be subject to the Company maintaining at least $65.0 million of liquidity and complying with the terms and positions of our current credit facilities. In addition, our July 2027 Senior Unsecured Notes (the “Notes“) have a provision whereby we are required to make an offer to noteholders to repurchase their Notes, subject to a cap of $63.8 million, based on the amount of excess FCF (calculated on a semi-annual basis) and the amount of liquidity available to the Company. Based off current strip pricing and our projected first half 2023 results, we expect that we would be able to make such an offer in addition to continuing to execute our NCIB. Further details regarding the NCIB will be provided when it has been approved by the TSX.
Considering the Company’s current production profile, our net debt target is $225 million, which we expect to achieve in the second half of 2023 based on our guidance (and subject to shares purchased under an NCIB). As we approach this debt level while maintaining our liquidity threshold, we will evaluate additional return of capital plans. The NCIB is initially being implemented as we believe the intrinsic value of our shares far exceeds our current trading price as evidenced, in part, by the net present value, before-tax, discounted at 10 percent (“NPV10“) of our 2022 PDP reserves less net debt (at September 30, 2022), which exceeds $15 per share.
2022 RESERVES REPORT
We are pleased to announce our independent reserves evaluation for the year ended December 31, 2022, prepared by GLJ Ltd. (“GLJ“).
“The strength of the Company’s high-quality assets and successful 2022 capital program combined with improved pricing are shown in the results of our 2022 Reserves Report,” said Stephen Loukas. “The future price deck increased roughly 30 percent from year-end 2021, helping to mitigate the impact of inflation and rising expenses on finding and development costs. We also aligned our future development capital in our reserve book to reflect our expected future capital activity, increasing our five-year program to approximately $250 million per year. With the addition of over 80 new locations (primarily in the Cardium and Viking areas), we are well positioned to further enhance our reserve book through development and exploration/appraisal activities in 2023 as we further develop our strong land base.”
HIGHLIGHTS
With the largest development program undertaken in several years, Obsidian Energy drilled wells in all three core areas in 2022. Focused on delineating our substantial land position and expanding our opportunity base, we renewed activity in Viking and Peace River and increased our reserve base through extensions, step-out wells, and new exploration/appraisal drilling. We also increased our Peace River land position during the year, providing additional potential Bluesky locations to our portfolio. These activities, combined with significantly improved commodity price forecasts compared to 2021, had a significant impact on our reserve evaluation.
- Reserves NPV10 increased over 2021 levels as follows:
- PDP: 38 percent increase to $1.6 billion.
- 1P: 49 percent increase to $2.1 billion.
- 2P: 54 percent increase to $2.8 billion.
- We replaced 144 percent of 2022 production on a PDP basis, 214 percent on a 1P basis and 393 percent on a 2P basis.
- Our drilling program combined with technical revisions generated reserves replacement of 2022 production of 113 percent for PDP, 177 percent for 1P and 347 percent for 2P, excluding the effects of acquisition and disposition activity and commodity price changes from year-end 2021.
- Our optimization capital program continued to deliver strong results for the fourth year in a row, successfully adding 2.3 mmboe of PDP reserves through capital expenditures of $13.3 million, providing a compelling PDP reserve addition cost of $5.74 per boe.
- Future development capital (“FDC“) was added to appropriately adjust the undeveloped reserves and generate a five-year program of approximately $250 million per year.
- Finding and development (“F&D“) costs including changes in FDC were $20.48/boe for PDP, $26.88/boe for 1P and $19.21/boe for 2P.
- Development and acquisition (“FD&A“) costs including changes in FDC were $20.53/boe (PDP), $26.63/boe (1P) and $19.06/boe (2P).
- The strength and profitability of our assets was demonstrated through 2022 recycle ratios of 2.4x for PDP, 1.9x for 1P and 2.6x for 2P, based on our expected 2022 operating netback of $49.82/boe and F&D costs (including changes in FDC).
- Our total undeveloped proved plus probable reserve locations increased by over 80 new net locations to 311 total net locations booked (including 236 net locations in the Cardium, 22 net locations in the Bluesky, 2 net locations in the Clearwater, 49 in the Viking, one Devonian and one Mannville).
- These locations are booked with a highly achievable total FDC of $1,255 million (approximately $250 million per year).
- Obsidian Energy maintains a strong reserve life index (“RLI“) of approximately 6.8, 9.9 and 13.3 years on a PDP, 1P, and 2P basis, respectively.
SUMMARY OF 2022 RESERVES
GLJ conducted an independent reserves evaluation of 100 percent of our reserves effective December 31, 2022, using a four-consultant average (“IC4“) of forecast commodity prices and assumptions at December 31, 2022. This evaluation was prepared in accordance with definitions, standards, and procedures set out in the Canadian Oil and gas Evaluation Handbook and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101“). Reserves included below are company share gross reserves which are the Company’s total working interest reserves before the deduction of any royalties and excluding any royalty interests payable to the Company. The numbers in the tables below may not add due to rounding.
Summary of Reserves1
As at December 31, 2022
Light & Medium Oil |
Heavy Oil & Bitumen |
Natural Gas Liquids |
Conventional Natural Gas |
Barrel of Oil Equivalent |
|
Reserve Category | (mmbbl) | (mmbbl) | (mmbbl) | (bcf) | (mmboe) |
Proved | |||||
Developed producing | 31.2 | 8.5 | 7.3 | 175.3 | 76.2 |
Developed non-producing | 0.3 | – | 0.1 | 2.3 | 0.8 |
Undeveloped | 25.1 | 1.8 | 4.7 | 107.4 | 49.5 |
Total Proved | 56.6 | 10.3 | 12.1 | 285.0 | 126.5 |
Total Probable | 23.3 | 5.1 | 5.0 | 123.6 | 54.1 |
Total Proved plus Probable | 79.9 | 15.5 | 17.1 | 408.6 | 180.6 |
(1) Reserves are shown on a gross working interest basis.
Reserves Reconciliation – Total Proved
Light & Medium Oil |
Heavy Oil & Bitumen |
Natural Gas Liquids |
Conventional Natural Gas |
Barrel of Oil Equivalent |
|
Reconciliation Category | (mmbbl) | (mmbbl) | (mmbbl) | (bcf) | (mmboe) |
Total Proved | |||||
December 31, 2021 | 55.4 | 11.3 | 9.6 | 224.4 | 113.7 |
Discoveries | – | – | – | – | – |
Extensions | 7.3 | 1.0 | 1.8 | 47.4 | 18.0 |
Infill Drilling | 0.5 | 0.3 | – | 1.2 | 1.1 |
Improved Recovery | 0.2 | 0.1 | – | 0.2 | 0.3 |
Technical Revisions | (4.0) | (0.8) | 1.1 | 25.1 | 0.5 |
Acquisitions | – | – | 0.1 | 2.0 | 0.4 |
Dispositions | (0.1) | – | – | (0.4) | (0.2) |
Economic Factors | 1.5 | 0.7 | 0.3 | 8.4 | 4.0 |
Production | (4.3) | (2.2) | (0.9) | (23.3) | (11.2) |
December 31, 2022 | 56.6 | 10.3 | 12.1 | 285.0 | 126.5 |
Reserves Reconciliation – Total Proved Plus Probable
Light & Medium Oil |
Heavy Oil & Bitumen |
Natural Gas Liquids |
Conventional Natural Gas |
Barrel of Oil Equivalent |
|
Reconciliation Category | (mmbbl) | (mmbbl) | (mmbbl) | (bcf) | (mmboe) |
Total Proved Plus Probable | |||||
December 31, 2021 | 69.5 | 15.8 | 12.8 | 297.5 | 147.8 |
Discoveries | – | – | – | – | – |
Extensions | 14.1 | 2.1 | 2.5 | 70.4 | 30.4 |
Infill Drilling | 2.4 | 0.4 | 0.2 | 5.4 | 3.9 |
Improved Recovery | 0.3 | 0.1 | – | – | 0.3 |
Technical Revisions | (4.0) | (1.4) | 2.0 | 45.4 | 4.2 |
Acquisitions | – | – | 0.1 | 2.8 | 0.6 |
Dispositions | (0.1) | – | – | (0.5) | (0.2) |
Economic Factors | 1.9 | 0.6 | 0.4 | 10.8 | 4.8 |
Production | (4.3) | (2.2) | (0.9) | (23.3) | (11.2) |
December 31, 2022 | 79.9 | 15.5 | 17.1 | 408.6 | 180.6 |
Summary of Before Tax Net Present Values
As at December 31, 2022(1)
Net Present Values | Discount Rate | ||||
$ millions | Undiscounted | 5 Percent | 10 Percent | 15 Percent | 20 Percent |
Proved | |||||
Developed producing | 1,994 | 1,881 | 1,579 | 1,354 | 1,193 |
Developed non-producing | 22 | 17 | 14 | 11 | 10 |
Undeveloped | 1,321 | 828 | 549 | 379 | 267 |
Total Proved | 3,338 | 2,726 | 2,142 | 1,745 | 1,470 |
Total Probable | 1,991 | 1,046 | 653 | 451 | 333 |
Total Proved plus Probable | 5,328 | 3,772 | 2,794 | 2,196 | 1,803 |
(1) The December 31, 2022, reserve net present values include only active Obsidian Energy existing well, facility, and pipeline decommissioning liability estimates, which totals $28 million NPV10 (2021 – $22 million).
Future Development Capital
As at December 31, 2022
$ millions | Total Proved | Total Proved Plus Probable |
2023 | 173 | 202 |
2024 | 197 | 256 |
2025 | 245 | 261 |
2026 | 183 | 267 |
2027 | 173 | 260 |
2028 and subsequent | 9 | 9 |
Total, Undiscounted | 980 | 1,255 |
Total, Discounted @ 10% | 769 | 979 |
F&D and FD&A Costs
As at December 31, 2022
($ millions, except as noted) | Proved Developed Producing |
Total Proved | Total Proved Plus Probable |
Exploration and development capital expenditures | 314.8 | 314.8 | 314.8 |
Total change in FDC | 11.3 | 324.1 | 523.5 |
F&D capital, including total change in FDC | 326.1 | 639.0 | 838.3 |
Reserve additions, including revisions (mmboe) | 15.9 | 23.8 | 43.6 |
F&D per boe | 20.48 | 26.88 | 19.21 |
($ millions, except as noted) | Proved Developed Producing |
Total Proved | Total Proved Plus Probable |
F&D capital, including total change in FDC | 326.1 | 639.0 | 838.3 |
Acquisitions, net of dispositions | 4.6 | 4.6 | 4.6 |
Acquisitions, FDC | – | – | – |
Dispositions, FDC | – | (4.3) | (4.3) |
FD&A capital, including total change in FDC | 330.7 | 639.2 | 838.6 |
Reserve additions, including revisions and | |||
acquisitions (mmboe) | 16.1 | 24.0 | 44.0 |
FD&A per boe | 20.53 | 26.63 | 19.06 |
(1) Capital expenditures are unaudited.
F&D Costs by Year
($/boe) | 2022 | 2021 | 2020 | 3-Year Average |
F&D costs, including total change in FDC1 | ||||
Proved developed producing | 20.48 | 9.57 | 9.41 | 13.74 |
Total proved | 26.88 | 13.68 | 3.32 | 17.29 |
Total proved plus probable | 19.21 | 10.27 | 11.19 | 15.51 |
FD&A costs, including total change in FDC2 | ||||
Proved developed producing | 20.53 | 9.07 | 9.77 | 13.70 |
Total proved | 26.63 | 12.87 | 3.39 | 16.63 |
Total proved plus probable | 19.06 | 9.62 | 11.50 | 14.84 |
(1) The calculation of F&D includes the change in FDC and excludes the effects of acquisitions and depositions.
(2) The calculation of FD&A includes the change in FDC and includes the effects of acquisitions and dispositions.
Summary of Pricing and Inflation Rate Assumptions
As at December 31, 2022(1)
Canadian Light | Natural Gas | |||||||
WTI | Sweet Crude | AECO-C | Exchange Rate | |||||
IC4 | Cushing, Oklahoma | 40° API | Spot | |||||
Forecast(2) | ($US/bbl) | ($Cdn/bbl) | ($Cdn/mmbtu) | ($US/$Cdn) | ||||
Year | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
Forecast | ||||||||
2023 | 80.25 | 67.91 | 103.16 | 79.36 | 4.44 | 3.22 | 0.74 | 0.80 |
2024 | 78.19 | 65.42 | 97.34 | 76.07 | 4.54 | 3.07 | 0.76 | 0.80 |
2025 | 76.10 | 66.72 | 94.21 | 77.59 | 4.37 | 3.14 | 0.76 | 0.80 |
2026 | 76.96 | 68.05 | 94.90 | 79.13 | 4.44 | 3.20 | 0.77 | 0.80 |
2027 | 78.50 | 69.42 | 96.48 | 80.73 | 4.52 | 3.26 | 0.77 | 0.80 |
2028 | 80.07 | 70.81 | 98.41 | 82.33 | 4.61 | 3.34 | 0.77 | 0.80 |
2029 | 81.67 | 72.22 | 100.38 | 83.98 | 4.70 | 3.40 | 0.77 | 0.80 |
2030 | 83.31 | 73.67 | 102.38 | 85.66 | 4.79 | 3.46 | 0.77 | 0.80 |
2031 | 84.97 | 75.14 | 104.43 | 87.37 | 4.88 | 3.54 | 0.77 | 0.80 |
2032 | 86.68 | 76.64 | 106.16 | 89.12 | 4.98 | 3.60 | 0.77 | 0.80 |
2033 | 88.40 | 108.28 | 5.08 | 0.77 |
(1) Prices escalate at two percent after 2033, with the exception of foreign exchange which stays flat.
(2) Pricing forecasts utilized IC4 pricing (GLJ, Sproule & Associates Ltd., McDaniel & Associates Consultants and Deloitte Resource Evaluation & Advisory).
The financial and operating information in this news release is based on estimates and is unaudited. Some of the terms below do not have standardized meanings. Further detail can be found in the “Oil and Gas Advisory” section contained in this release. Additional reserve information as required under NI 51-101 will be included in our Annual Information Form as at December 31, 2022 which will be filed on SEDAR, EDGAR, and posted to our website once we file our year-end 2022 financial documents.
HEDGING UPDATE
The Company continues to focus our hedging program on near term WTI positions to protect cashflow given our first half capital program. As at January 27, 2023, the following financial oil and gas contracts are in place on a weighted average basis:
WTI Oil Contracts
Type | Remaining Term | Volume (bbl/d) |
Bought Put Price (C$/bbl) |
Sold Call Price (C$/bbl) |
Swap Price (C$/bbl) |
WTI Collar | October 2022 | 10,000 | 109.75 | 130.07 | – |
WTI Swap | November 2022 | 1,950 | 123.97 | ||
WTI Collar | November 2022 | 7,000 | 106.07 | 126.77 | – |
WTI Collar | December 2022 | 2,000 | 105.00 | 130.20 | – |
AECO Natural Gas Contracts
Type | Remaining Term | Volume (mcf/d) |
Swap Price (C$/mmf) |
AECO Swap | October 2022 | 26,065 | 4.74 |
AECO Swap | December 2022 – March 2023 | 14,976 | 6.18 |
AECO Swap | April 2023 – October 2023 | 44,073 | 3.63 |
2023 GUIDANCE RELEASE WEBCAST & UPDATED PRESENTATION
In association with this release, our Interim President and CEO, Mr. Stephen Loukas and other members of management will host a webcast presentation online on Tuesday, January 31, 2023, at 9:30 a.m. Mountain Standard Time (11:30 a.m. Eastern Standard 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 via phone should connect five to 10 minutes prior to the scheduled start time through the following numbers:
Canada / USA: | 1-800-319-4610 (toll-free) |
Toronto: | 1-416-915-3239 |
Calgary: | 1-403-351-0324 |
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 investor.relations@obsidianenergy.com. The updated Presentation will be available for replay following the webcast on our website, www.obsidianenergy.com.
FOURTH QUARTER AND FULL YEAR 2022 RESULTS RELEASE
We intend to release our fourth quarter and full year 2022 financial and operational results before North American markets open on February 23, 2023. In addition, the 2022 management’s discussion and analysis and the audited 2022 consolidated financial statements will be available on our website at www.obsidianenergy.com, on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov on or about the same date.