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Obsidian Energy Announces Acquisition of 45 Percent Partnership Interest in Peace River Oil Partnership, Up to $22.5 Million Equity Issue and 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, Up to $22.5 Million Equity Issue and 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 Company has filed and been receipted for a preliminary short form prospectus with the securities commissions in each of the provinces of Canada, other than Québec, in connection with a \"best efforts\" marketed equity offering of subscription receipts (\"Subscription Receipts\") for minimum gross proceeds of $12.5 million and maximum gross proceeds of $22.5 million (the \"Offering\"). Final pricing of the Subscription Receip...