Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (November 2024)
41 slides from Obsidian Energy's investor presentation, November 2024
Slide 1: Obsidian Energy Ltd. Corporate Presentation
Obsidian Energy Ltd. Corporate Presentation November 2024 TSX:/NYSE American: OBE
Slide 2: Advisory
ADVISORY OVERVIEW This presentation should be read in conjunction with the Company’s interim consolidated financial statements and MD&A for the three and nine months ended September 30, 2024, and audited consolidated annual financial statements and MD&A for the year ended December 31, 2023. All doll
Slide 3: Corporate Overview
CORPORATE OVERVIEW OVERVIEW World class assets and experienced team delivering value People, assets, discipline, return-focused, and execution strength CORPORATE SUMMARY MARKET SUMMARY Production 2024E 37,200 boe/d Shares outstanding 74.5 million Q3 2024 39,714 boe/d YoY production growth* 15% Marke
Slide 4: Our Strategic Advantages
OUR STRATEGIC ADVANTAGES OVERVIEW Differentiating Obsidian Energy from peers to realize enhanced shareholder returns Diversified portfolio of low decline, oil-weighted assets with ~14 years of reserves, generating light and TOP QUALITY ASSETS heavy oil production with substantial growth upside. SOLI
Slide 5: Obsidian Energy Strategy
OBSIDIAN ENERGY STRATEGY STRATEGY We focus on superior execution to deliver results and create value for shareholders STRATEGY TO DELIVER SUPERIOR SHAREHOLDER RETURNS Drive per share growth Use FCF from Grow production to Maintain prudent via production growth, light oil assets to invest 50,000 boe/
Slide 6: Focus During 2024 - Highlights
FOCUS DURING 2024 - HIGHLIGHTS STRATEGY Strategy to unlock shareholder value through focus on Peace River growth, share buybacks and debt repayment 2024 plans expected to deliver 15% production growth and generate FCF, while furthering share repurchase program to maximize shareholder value OPERATION
Slide 7: 2024 Guidance
2024 GUIDANCE STRATEGY Value-added growth through the development of new and existing fields while further appraising our Peace River asset 2024 (REVISED) HEAVY OIL LIGHT OIL Average production 37,000 – 37,400 boe/d Based on midpoint of guidance Capital expenditures $320 – $335 million Average produ
Slide 8: Peace River Growth Asset
PEACE RIVER GROWTH ASSET HEAVY OIL ASSETS (PEACE RIVER) Ownership in high-quality Bluesky and Clearwater heavy oil resource provides production growth and upside Highly economic play and source of future growth 100% ‣ Large, contiguous, long-term land base of working interest >680 sections with Blue
Slide 9: Peace River Transformation
PEACE RIVER TRANSFORMATION HEAVY OIL ASSETS (PEACE RIVER) Expanded holdings, increased production and established new Bluesky and Clearwater development fields D E C E M B ER 2 0 2 1 2024 (post 45% W.I. PROP acquisition) 2021 2024 (as at October 30) 4,891 Average production 11,995 (Dec./21)1 (boe/d)
Slide 10: Peace River 2024 Program
PEACE RIVER 2024 PROGRAM HEAVY OIL ASSETS (PEACE RIVER) Strong technical work provides foundation for substantial future development opportunities and growth NAMPA H2 program builds upon recent development success ‣ Mapping indicates large development potential with stacked pay potential while setti
Slide 11: Clearwater Production Growth
HEAVY OIL ASSETS (PEACE RIVER) CLEARWATER PRODUCTION GROWTH Exploration/appraisal, development and acquisition success CLEARWATER PRODUCTION Clearwater ahead of 3-year plan (4,000 boe/d in 2026) (average boe/d by month) with higher well rates, acceleration of Dawson program and acquisition volumes 4
Slide 12: Dawson Fields – Strong Clearwater Results
DAWSON FIELDS – STRONG CLEARWATER RESULTS HEAVY OIL ASSETS (PEACE RIVER) Dawson development field providing substantial growth and outperforming expectations ‣ High-quality reservoir and fluids ‣ Results outperforming initial type curve expectations ‣ Exploratory/appraisal drilling, delineation and
Slide 13: Strategic Peace River Clearwater Acquisition
STRATEGIC PEACE RIVER CLEARWATER ACQUISITION HEAVY OIL ASSETS (PEACE RIVER) Highly synergistic to existing land base and on trend with existing Dawson Clearwater development field HIGHLIGHTS ‣ Acquired strategic Peace River lands and production for $80.5 million consideration (inclusive of liquids i
Slide 14: Light Oil Assets
LIGHT OIL ASSETS LIGHT OIL ASSETS History of highly economic returns with years of low-risk inventory Q3 2024 Cardium production 25,889 boe/d PEMBINA Cardium (Willesden Green/Pembina) ‣ One of North America’s most significant light oil fields with the dominant land position among peers ‣ Significant
Slide 15: Cardium Resource Play – Consistent Robust Netbacks
CARDIUM RESOURCE PLAY – CONSISTENT ROBUST NETBACKS LIGHT OIL ASSETS History of highly economic returns with years of low-risk inventory and significant owned/operated infrastructure Efficient and highly economic development 80% ‣ Extensive acreage totaling 426 sections average working interest ‣ Adv
Slide 16: Willesden Green/Pembina 2024 Program
WILLESDEN GREEN/PEMBINA 2024 PROGRAM LIGHT OIL ASSETS Economic returns with years of low-risk inventory providing strong returns and quick payouts Foundational asset with horizontal development providing strong returns PEMBINA and quick payouts ‣ Low decline, pressure-maintained development WILLESDE
Slide 17: Considerable Future Value from Tax Pools
CONSIDERABLE FUTURE VALUE FROM TAX POOLS SUMMARY $2.5 billion of tax pools in unrecognized value to be leveraged in our three-year growth plan Our significant tax pool position is estimated to save TAX POOL COMPOSITION ~$35 million in 2024 (September 30, 2024) Amount of Pools Illustrative Value of T
Slide 18: Reserves Underpin Our Current and Future Value
RESERVES UNDERPIN OUR CURRENT AND FUTURE VALUE SUMMARY Trading at substantial discount on booked reserves basis; growing per share metrics to increase shareholder value NET ASSET VALUE (NAV) PER SHARE YEAR-END 2023 RESERVES SUMMARY (C$ per share) TOTAL TOTAL PROVED US$65 WTI US$75 WTI US$85 WTI $35
Slide 19: Why Invest in Obsidian Energy
WHY INVEST IN OBSIDIAN ENERGY SUMMARY Peace River growth area combined with established light oil production offers upside potential for shareholders ORGANIC GROWTH STRATEGY ‣ Strategy focused on growing Peace River production and per share metrics with expectation to continue to return capital to s
Slide 20: Appendix
Appendix TSX:/NYSE American: OBE
Slide 21: Hedging Production to Preserve Cash Flow
HEDGING PRODUCTION TO PRESERVE CASH FLOW APPENDIX Continuing to build on our hedge position at constructive levels Disciplined approach to WTI OIL AECO GAS HEDGES risk management to HEDGES ($, mcf/d) Collars ($, WTI/bbl) $3.43 Swaps protect cash flows for 14,000 50,000 - $4.11 capital investment, de
Slide 22: 2024 Capital Program
2024 CAPITAL PROGRAM APPENDIX Expanded development and exploration/appraisal program to add production and delineate assets 67 (66.4 NET) WELL OPERATED DRILLING PROGRAM ‣ Expected average production of ~37,200 boe/d, a 15% annualized production growth from 2023 ‣ Ability to alter program quickly in
Slide 23: Delivering Results
DELIVERING RESULTS APPENDIX Strategy and execution create momentum for long-term value 2022 2023 Q1 – Q3 2024 GROWTH IN PRODUCTION (boe/d; boe/d per share) Production 30,682 boe/d 32,275 boe/d 36,587 boe/d 37,400 40,000 180 Capital expenditures $314.8 million $292.5 million $259.0 million 160 37,000
Slide 24: Three-Year Growth Plan Financials
THREE-YEAR GROWTH PLAN FINANCIALS APPENDIX Compelling value proposition with accelerated production, and both free cash flow and funds flow growth for strong /share metrics 2024E 2025F 2026F Peace River (heavy oil) 9,500 boe/d 15,500 boe/d 24,000 boe/d ‣ Highlights: WG, Pembina, Viking (light oil) 2
Slide 25: Peace River Multi-Zone Opportunities
PEACE RIVER MULTI-ZONE OPPORTUNITIES APPENDIX Creating value applying multi-zone development across our Peace River asset ‣ Bluesky: ‣ Multi-stacked drilling Apply learnings from ‣ 4 – 8 wells per section, Bluesky and Clearwater FORMATION depending on zone thickness COLORADO SHALE exploration/apprai
Slide 26: Viking – Significant Development Upside
VIKING – SIGNIFICANT DEVELOPMENT UPSIDE APPENDIX Revitalizing light oil asset that provides high IP rates, highly economic return and quick payouts 100% average working interest History of unlocking reserves and production value ‣ Sweet, light oil development play with associated natural gas 2,345 b
Slide 27: Well Economics
WELL ECONOMICS APPENDIX Strong returns across areas despite pressure in the current commodity price environment HALF CYCLE RESERVE TYPE CURVE ECONOMICS PEACE RIVER WILLESDEN GREEN PEMBINA VIKING Formation Bluesky1 Clearwater2 Cardium2 Cardium2 W. Viking (Esther)2 Well Length 11 legs 8 legs 2.0 mile
Slide 28: 2023 Reserves Highlights
2023 RESERVES HIGHLIGHTS APPENDIX Growth in reserves volumes and improved efficiencies generating strong reserve replacement and recycle ratios YEAR-END 2023 RESERVES SUMMARY Proved developed Total proved Total proved 7th Consecutive Year producing (PDP) (1P) plus probable (2P) of >100% reserve repl
Slide 29: 2023 Reserves Locations
2023 RESERVES LOCATIONS APPENDIX Replacing production by >120% and increasing booked locations with significant future inventory potential Substantial inventory for future growth O B E LA N D BOOKED RESERVE LOCATIONS (sections prospective for formation) (number, 2P, net) 350 129 343 425 300 311 250
Slide 30: Experienced Team with Strong Technical Skills
EXPERIENCED TEAM WITH STRONG TECHNICAL SKILLS APPENDIX Working together to build a top tier developer that provides solid returns to stakeholders EMPLOYEES FINANCIAL AND COMMERCIAL ‣ Management team: ~285 staff & contractors with deep Strong financial, commercial and capital experience in profession
Slide 31: Endnotes
Endnotes TSX:/NYSE American: OBE
Slide 32: Endnotes
ENDNOTES ENDNOTES Slide 3: Corporate Overview Slide 7: 2024 Guidance, cont. Market capitalization determined with share price on the close of business on October 29, 2024, on Capital expenditures include approximately $21 million for exploration/appraisal activity with minimal impact the TSX ($7.78
Slide 33: Endnotes, Cont.
ENDNOTES, CONT. ENDNOTES Slide 13: Strategic Peace River Clearwater Acquisition Slide 18: Reserves Underpin our Current and Future Value, cont. All reserves data presented herein in respect of the Acquisition derived from the reserve report NAV/share based on YE 2023 reserves run at flat pricing. As
Slide 34: Endnotes, Cont.
ENDNOTES, CONT. ENDNOTES Slide 23: Delivering Results Slide 26: Viking – Significant Development Upside Production per share data based on annualized boe/d and average basic shares for the year, and Booked reserve locations reflects locations as defined by our Independent, Qualified Reserves Evaluat
Slide 35: Underlying Assumptions
UNDERLYING ASSUMPTIONS ENDNOTES REVISED 2024 WTI11 US$/bbl 72.50 MSW Differential1 US$/bbl 3.50 The material budget and underlying WCS Differential1 US$/bbl 15.00 assumptions used by the Company in AECO1 $/GJ 1.50 preparation of its 2024 guidance. Foreign Exchange Rate1 CDN$/US$ 1.35 Production2 boe
Slide 36: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES 2024 Guidance means the expected 2024 results, based on internal Company, Obsidian Energy or OBE means Obsidian Energy Ltd.; as Mmcf and mmcf/d means million cubic feet and million cubic feet per day, assumptions and estimates applicable respectively 2024E mea
Slide 37: Non-GAAP Measures Advisory
NON-GAAP MEASURES ADVISORY ENDNOTES Throughout this presentation and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed
Slide 38: Oil and Gas Information Advisory
OIL AND GAS INFORMATION ADVISORY ENDNOTES Barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion Test Results and Initial Production Rates ratio of six thousand cubic feet of natural gas to one barrel of crude oil is based on an energy Readers are ca
Slide 39: 2023 Reserves Disclosure and Definitions
2023 RESERVES DISCLOSURE AND DEFINITIONS ENDNOTES Unless otherwise noted, any reference to 2023 reserves in this presentation are based on the report (the “Reserves Each of the reserves categories (proved and probable) may be divided into developed and undeveloped categories: Report”) prepared by GL
Slide 40: Forward-Looking Information Advisory
FORWARD-LOOKING INFORMATION ADVISORY ENDNOTES Certain statements contained in this document constitute forward-looking statements or information (collectively With respect to forward-looking statements and FOFI contained in this document, the Company has made "forward-looking statements") within the
Slide 41: Forward-Looking Information Advisory (Cont.)
FORWARD-LOOKING INFORMATION ADVISORY (CONT.) ENDNOTES Although the Company believes that the expectations reflected in the forward-looking statements and FOFI breach one or more of the financial covenants pursuant to our agreements with our lenders and the holders of our contained in this document,
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