Calgary, Alberta – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) confirms that the Alberta Energy Regulator (“AER“) issued an order (the “Order“) regarding the Company’s 14-18-082-17W5 water disposal well (the “Water Disposal Well“), located approximately 40 kilometres Southeast of the Town of Peace River.
Obsidian Energy is cooperating with the AER and intends to comply with the Order, including establishing seismic monitoring at the Water Disposal Well. The Order confirmed that the AER was not aware of any adverse effects related to the seismic events near the Town of Peace River between November 29, 2022, and March 16, 2023. The Company has requested the data and analysis that the AER relied on when making its decision to issue the Order. The Alberta Geological Survey’s analysis of the seismic events on November 29, 2022 attributed the seismic activity to natural causes and stated there was not a clear correlation between the seismic events and Obsidian Energy’s disposal operations.
“Obsidian Energy has a strong history of responsible operations and takes seriously our commitment to safeguarding the environment,” said Stephen Loukas, Obsidian Energy’s President and Chief Executive Officer. “We meet or exceed regulatory requirements to reduce the potential impact on our local communities, our people, and the areas in which we operate. However, since we have not seen any data or other evidence for the AER’s conclusions, we cannot – and do not – agree with these conclusions. We have requested data from the AER and intend to engage independent third-party experts to help us better understand the AER’s reasoning. We believe that this additional evaluation and further monitoring are required before a proper conclusion can be reached regarding the cause of the seismic events.”
The disposal of produced water into subsurface reservoirs is a standard industry practice necessary for the responsible production of hydrocarbons, and the Company’s Water Disposal Well is both approved and licensed by the AER. Obsidian Energy ensures that all of our operations are in compliance with regulatory requirements and operates the Water Disposal Well at pressures far below licensed rates. The Water Disposal Well does not involve hydraulic fracturing or high-pressure pumping activities. Obsidian Energy’s Water Disposal Well has operated safely for more than a decade, as have, to the best of the Company’s knowledge, similar water disposal wells operated by other oil producers in the vicinity.
At this time, we anticipate no impact on the Company’s production due to the Order.