Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (June 2021)
26 slides from Obsidian Energy's investor presentation, June 2021
Slide 1: Obsidian Energy Ltd. Corporate Presentation
Obsidian Energy Ltd. Corporate Presentation June 2021 TSX: OBE OTCQX: OBELF
Slide 2: Advisory
ADVISORY OVERVIEW This presentation should be read in conjunction with the Company’s unaudited consolidated financial statements, Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2021. All dollar amounts contained in this presentation are expressed in millions of Ca
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS OVERVIEW An efficient producer with operational strength, providing growth potential PRODUCTION CARDIUM ASSETS OPTIONALITY Low decline, oil-weighted asset base with Largest acreage holder in a world class, Flexible and responsive to commodity significant underlying reserves and
Slide 4: Corporate Overview
CORPORATE OVERVIEW OVERVIEW World class assets and experienced team delivering value People, assets, discipline, return-focus and execution strength CORPORATE SUMMARY MARKET SUMMARY Production 2021E 23,300 – 23,800 boe/d Shares outstanding 74.9 million Production mix (2021E) 65% oil and liquids Mark
Slide 5: Leading Cardium Play Areas
LEADING CARDIUM PLAY AREAS OVERVIEW Our growth foundation with ample development locations for years to come FIELD HISTORY Q1 2021 Cardium production ~19,000 boe/d ‣ One of North America’s most significant light oil fields ‣ Development since the 1950’s; various phases has kept field producing for o
Slide 6: Peace River Oil Partnership (PROP) and Viking
PEACE RIVER OIL PARTNERSHIP (PROP) AND VIKING OVERVIEW Proven assets with significant optionality in current price environment PROP Q1 2021 PROP production ~3,000 boe/d ‣ Reliable and steady base production ‣ 55% working interest, operator and managing partner of asset ‣ Large, contiguous cold-flow
Slide 7: Delivering Stronger Wells at Lower Capital Costs
DELIVERING STRONGER WELLS AT LOWER CAPITAL COSTS OPERATIONS Top tier execution in our core Cardium assets Our 2021 program delivered improvements over 2018: ‣ 27% longer laterals to access more reservoir at 23% lower cost per lateral metre ‣ 21% reduction in completion cost per tonne; less stages ne
Slide 8: Top Cardium Driller and Operator
TOP CARDIUM DRILLER AND OPERATOR OPERATIONS Our Willesden Green field development program results in leading Cardium well performance compared to peers ‣ 900+ identified Cardium drilling locations with only 172 net booked YE 2020 2P Cardium locations ‣ Significant future upside to 2P reserve values
Slide 9: Strong Reserves Provide Drilling Inventory for Years
STRONG RESERVES PROVIDE DRILLING INVENTORY FOR YEARS OPERATIONS Over 25 years of drilling inventory to hold production at current levels ‣ Obsidian Energy remains conservatively booked versus our peers $1.2 billion ‣ Our booked undeveloped locations over the 2P RESERVE VALUE (NPV10%, AFTER TAX) next
Slide 10: Dedicated to Sustainability
DEDICATED TO SUSTAINABILITY CORPORATE RESPONSIBILITY Responsible stewardship for all stakeholders We believe it is our responsibility to support our communities, contribute to the economy, minimize our environmental impact and act in the best interests of all our stakeholders ENVIRONMENT SOCIAL VALU
Slide 11: Responsibly Managing Our Decommissioning Liability
RESPONSIBLY MANAGING OUR DECOMMISSIONING LIABILITY CORPORATE RESPONSIBILITY Restoring the land Committed to reducing environmental footprint ‣ Active committee participation to improve industry practices ‣ Restoring areas to strict regulatory standards, allowing land reuse ‣ Proven ability to econom
Slide 12: Obsidian Energy Strategy
OBSIDIAN ENERGY STRATEGY STRATEGY We focus on superior execution throughout to deliver results Focused on maintaining operational excellence, improving our debt leverage and delivering top quartile total shareholder returns TSX: OBE OTCQX: OBELF June 2021 | CORPORATE PRESENTATION | 12
Slide 13: Our Two-Year Corporate Plan
OUR TWO-YEAR CORPORATE PLAN STRATEGY Significant growth in free cash flow accelerates debt reduction WTI US$39/bbl US$60/bbl US$65/bbl US$60/bbl US$65/bbl Funds Flow from Operations $118 million ~$179 million ~$195 million ~$224 million ~$254 million Free cash flow $49 million ~$45 million ~$60 mill
Slide 14: Our Value in the Market Compared to Peers
OUR VALUE IN THE MARKET COMPARED TO PEERS STRATEGY We are significantly undervalued in the market: OBE would trade at $6.72 per share using comparable peer multiples Trading multiples based on Leverage metrics based on Capitalization FactSet median consensus estimates FactSet median consensus estima
Slide 15: Reserves Underpin Our Current and Future Value
RESERVES UNDERPIN OUR CURRENT AND FUTURE VALUE STRATEGY Obsidian Energy trading at substantial discount on booked reserves basis YEAR-END 2020 RESERVES SUMMARY Proved developed Total Total proved producing (PDP) proved (1P) plus probable (2P) Light and medium crude oil 31 MMbbl 51 MMbbl 67 MMbbl Hea
Slide 16: Why Obsidian Energy Trades at a Discount
WHY OBSIDIAN ENERGY TRADES AT A DISCOUNT STRATEGY Historical headwinds resulted in current negative outlook by market ‣ Historical track record of operational underperformance ‣ 2018: Over-leveraged balance sheet due to poor financial performance (debt grew by ~$100 million) ‣ Early 2019: Redwater l
Slide 17: Why Invest in Obsidian Energy?
WHY INVEST IN OBSIDIAN ENERGY? SUMMARY Obsidian offers upside potential for shareholders ‣ Dominant Cardium land position and deep inventory of high- return wells that can be used to accelerate development at appropriate WTI levels ‣ Low decline production profile and strong Free Cash Flow generatio
Slide 18: Endnotes
Endnotes TSX: OBE OTCQX: OBELF
Slide 19: Endnotes
ENDNOTES ENDNOTES Slide 3: Investment Highlights Inventory locations unrisked internal estimates shown on a gross basis and are subject to change Slide 7: Delivering Stronger Wells at Lower Capital Costs without notice. No inventory locations have been assigned to land where Obsidian Energy is not t
Slide 20: Endnotes (cont.)
ENDNOTES (CONT.) ENDNOTES Slide 10: Dedicated to Sustainability Pipeline failure frequency determined as incidents per 1,000 kilometres of pipeline per year. Industry Slide 13: Our Two-Year Corporate Plan, cont. average of 0.89 in 2019 as per AER industry statistics. 2022F: FCF and production profil
Slide 21: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES 2021E means expectations for 2021 based on internal assumptions FX means foreign exchange rate, in our case typically refers to C$ mmcf means million cubic feet and estimates. to US$ exchange rates mmcf/d means million cubic feet per day 2022F means forecast e
Slide 22: Non-GAAP Measures Advisory
NON-GAAP MEASURES ADVISORY ENDNOTES In this presentation, we refer to certain financial measures that are not determined in accordance with IFRS. These measures as presented do not have any standardized meaning prescribed by IFRS and therefore they may not be comparable with calculations of similar
Slide 23: 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 ratio of six thousand cubic feet of natural gas to one barrel of crude oil is based on an energy equivalency conversion method primarily applicable at th
Slide 24: 2020 Reserves Disclosure and Definitions
2020 RESERVES DISCLOSURE AND DEFINITIONS ENDNOTES Unless otherwise noted, any reference to 2020 reserves in this presentation are based on the report ("Sproule Reserve Definitions Report") prepared by Sproule Associates Limited dated February 1, 2021 where they evaluated one hundred percent of the c
Slide 25: 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 contained in this document, the Company has made assumptions "forward-looking statements") within
Slide 26: Forward-Looking Information Advisory (cont.)
FORWARD-LOOKING INFORMATION ADVISORY (CONT.) ENDNOTES Although the Company believes that the expectations reflected in the forward-looking statements contained in this breach one or more of the financial covenants pursuant to our agreements with our lenders and the holders of our document, and the a