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Obsidian Energy Announces Acquisition of 45 Percent Partnership Interest in Peace River Oil Partnership Preliminary Third Quarter 2021 Results
Acquisition to provide additional production and reserves, full operational and funding cont...
About this update from Obsidian Energy Ltd
[{"type":"text","content":"Obsidian Energy Announces Acquisition of 45 Percent Partnership Interest in Peace River Oil Partnership Preliminary Third Quarter 2021 ResultsAcquisition to provide additional production and reserves, full operational and funding control Increased third quarter funds flow from operations from higher commodity prices and dedicated focus on managing cost structureCalgary, Alberta--(Newsfile Corp. - November 2, 2021) - OBSIDIAN ENERGY LTD. (TSX: OBE) (OTCQX: OBELF) (\"Obsidian Energy\", the \"Company\", \"we\", \"us\" or \"our\") is pleased to announce it has entered into a purchase and sale agreement (the \"Agreement\") to acquire the remaining 45 percent partnership interest in the Peace River Oil Partnership (\"PROP\") asset from our joint venture partner (the \"Vendor\"), through a wholly-owned subsidiary (the \"Acquisition\"). Total consideration paid will be $43.5 million prior to closing adjustments with an effective date of July 1, 2021. The Acquisition will be funded by a combination of cash and, if necessary, Obsidian Energy common shares (\"Common Shares\") issued to the Vendor. \"With this acquisition, we will have 100 percent interest and full operating and funding control of PROP,\" said Stephen Loukas, Obsidian Energy's Interim President and CEO. \"This acquisition allows us to better execute future development programs in the area, maximize cost efficiencies and further optimize production. In addition, improved economic returns from higher oil prices makes future development of the Peace River area highly compelling, and allows us to access the depth of our existing inventory and the resource potential of this asset.\"The cash consideration for the Acquisition will be funded by a $16.3 million limited-recourse loan secured by the 45 percent interest in PROP, which will be acquired pursuant to the Acquisition and proceeds from a new equity offering (the \"Offering\"). If the Company receives gross proceeds of less than $22.5 million pursuant to the Offering, the Vendor will receive common shares in the capital of Obsidian Energy (\"Common Shares\") valued at the price at which the Offering is conducted in payment of the balance of the purchase price of $43.5 million less customary adjustments payable at closing of the Acquisition; any Common Shares issued to the Vendor will be subject to a four-month hold period. AC...