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Obsidian Energy Announces Sale of Operated Pembina Assets for $320 Million in Cash, Equity and Assets
Obsidian Energy to receive $220 million in cash, $85 million in equity and a 34.6 percent interes...
About this update from Obsidian Energy Ltd
[{"type":"text","content":"Obsidian Energy Announces Sale of Operated Pembina Assets for $320 Million in Cash, Equity and AssetsObsidian Energy to receive $220 million in cash, $85 million in equity and a 34.6 percent interest in the Willesden Green Cardium Unit #2 Field, subject to adjustment in certain circumstancesTransaction results in significantly reduced debt and enhanced liquidityPositions Obsidian Energy to continue growth and delineation of Peace River asset with additional optionality from remaining light oil businessCalgary, Alberta--(Newsfile Corp. - February 19, 2025) - OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (\"Obsidian Energy\", the \"Company\", \"we\", \"us\" or \"our\") is pleased to announce that the Company has entered into a definitive asset purchase and sale agreement (the \"Agreement\") with Calgary-based InPlay Oil Corp. (\"InPlay\") (TSX: IPO).Under the terms of the Agreement, Obsidian Energy will divest our operated Pembina assets (the \"Pembina Assets\") but will retain our non-operated holdings in the Pembina Cardium Unit #11 (\"PCU#11\"). The Company will receive approximately $320 million from InPlay in three components (collectively, the \"Transaction\"), subject to closing and other adjustments, as follows:$220 million in cash (the \"Cash Proceeds\"); $85 million of InPlay's common shares, (the \"InPlay Shares\"[1]; and, together with the Cash Proceeds, the \"Non-Unit Consideration\"); andInPlay's 34.6 percent working interest in the Willesden Green Cardium Unit #2 (\"WGCU#2\") oil field, bringing Obsidian Energy's ownership of WGCU#2 to 99.8[2] percent. The additional interest is estimated by Obsidian Energy to be valued at $15 million. Cash Proceeds are expected to be used to initially pay down debt, improving Obsidian Energy's balance sheet and overall liquidity. Pro forma year-end 2024 estimated (\"2024E\") net debt would be reduced to approximately $192 million (assuming $220 million of Cash Proceeds) from $412 million (unaudited) (subject to closing and other adjustments and transaction costs), implying our syndicated credit facility (the \"Credit Facility\") would be drawn at approximately $5 million post-closing. As part of the Transaction, InPlay will assume all assets and liabilities associated with the Pembina Assets. \"The successful execution of our growth plan to date has put us in a position to r...