Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Merger or Acquisition (November 2020)
32 slides from Obsidian Energy's merger presentation, Nov 30, 2020
Slide 1: Obsidian Energy Corporate Presentation December 2020
Filed by Obsidian Energy Ltd. (Commission File No. 001-32895) Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Bonterra Energy Corp. Obsidian Energy Corporate Presentation December 2020Filed by Obsidian Energy Ltd. (Commission File No. 001-32895) Pursuant to Rule 425 under the
Slide 2: Important Notice to the Readers
Important Notice to the Readers This presentation should be read in conjunction with the Company’s unaudited interim consolidated financial statements, Management's Discussion and Analysis ( MD&A ) for the three and nine months ended September 30, 2020. All dollar amounts contained in this presentat
Slide 3: Corporate Overview
Corporate Overview Market Summary Ticker Symbol OBE Peace River MM Shares Outstanding 73 3,196 boe/d Q3 2020 Cold flow heavy oil MM Market Capitalization $40 Manage base production MM Net Debt $479 MM Enterprise Value $519 Corporate Summary mmboe Reserves (2P YE 2019) 126 Cardium years RLI (2P YE 20
Slide 4: Short-term Strategic Priorities & Year to Date 2020 Results
Short-term Strategic Priorities & Year to Date 2020 Results Short-term Priorities • Pursue successful acquisition of Bonterra to create “The Cardium Champion” • Transformational opportunity for both companies’ shareholders • Continue operational momentum and cost reduction initiatives to improve the
Slide 5: Long-term Strategic Priorities
Long-term Strategic Priorities Superior Shareholder Return Generate excess free cash Create scale and further Drive per share growth via flow while holding production decrease cost structure via organic development and flat with growth optionality Cardium consolidation debt pay down at increased com
Slide 6: Creating The Cardium Champion
Creating The Cardium Champion st On September 21 2020 Obsidian Energy commenced a formal offer to purchase all of the issued and outstanding common shares of Bonterra Energy Corp. • Obsidian Energy has offered 2 Obsidian Energy Shares for each Bonterra Share Central Pembina • Creates the Cardium Cha
Slide 7: Regaining Market Relevance
Regaining Market Relevance Pro Forma Company is poised to deliver a compelling overall investment thesis and to maximize value for all stakeholders of both Bonterra and Obsidian Energy Why Is This Transaction Compelling For Both Obsidian Energy and Bonterra? ü Top 20 WCSB oil producer with 35,000 bo
Slide 8: Obsidian Energy Investment Highlights
Obsidian Energy Investment Highlights • Base business continues to improve through strong production performance leveraging significantly improved cost structure Corporate • Focused on Cardium consolidation to realize significant synergies, continue to lower our WTI/bbl breakeven costs and achieve m
Slide 9: Corporate Cost Improvements
Corporate Cost Improvements OPEX Commentary Exceeding our 2020 OPEX and G&A per boe guidance Operating Expenses (OPEX) Updated 2020 • Total reduction in OPEX per boe of 27% from Guidance 2017 to mid-point of 2020 Guidance ($11.10/boe) • 2020 OPEX per boe continues to decrease despite lower productio
Slide 10: Corporate Breakeven Analysis
Corporate Breakeven Analysis Breakeven US$ WTI/bbl - Historical and Projected Obsidian / Obsidian & Bonterra Pro Forma Unhedged Cash Flow (US$/bbl) 2020 Breakeven Price ~$US39 WTI including Obsidian Hedge Positions Commentary • Our focus on improving the efficiency of the business is yielding materi
Slide 11: Undeveloped Reserves
Undeveloped Reserves 2019 PDP/1P Ratio 2019 2P Locations/Section Commentary • OBE has booked undeveloped locations based on achievable capital spending over the next 5 years. In comparison to peers, OBE is conservatively booked with one of the highest ratio of PDP/1P of all identified companies • OB
Slide 12: Cardium Play Fairways: A Large High-Graded Inventory
Cardium Play Fairways A Large High-Graded Inventory West Pembina Central Pembina R10W5 INDEX MAP 132 680 Type Curve Locations Type Curve Locations • Well established productive • Individual fairways and unit trend significantly de-risked boundaries in historically by major Cardium players pressure s
Slide 13: Leading Cardium Well Performance
Leading Cardium Well Performance Cumulative oil rate over time in the Willesden Green Field 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Month OBE (49 wells) Peer 1 (18 well
Slide 14: Cardium Growth & Operational Improvements
Cardium Growth & Operational Improvements Commentary Total Cardium Production • Our 2017-2020 drilling programs in Crimson Lake have delivered robust production growth with high-netbacks and low operating costs • Lowered DCET costs by 8% since Q2 2018 • OPEX has decreased 41% from FY 2017 – Q1-Q3 20
Slide 15: Crimson Lake
Crimson Lake Summary Economics • Q1 – Q3 2020 average production of 9,715 boe/d DCET Capex ($MM) $3.2 • Obsidian Energy cornerstone for revitalized primary EUR (Mboe) 229 development on our Cardium acreage Oil IP365 (bbl/d) 156 • Banked oil from historical pressure maintenance in WGCU#9 Total IP365
Slide 16: East Crimson
East Crimson Summary Economics • Q1 – Q3 2020 average production of 3,127 boe/d DCET Capex ($MM) $2.9 • Continued Eastward extension of the successful Crimson EUR (Mboe) 203 Lake development program Oil IP365 (bbl/d) 136 • Area has been de-risked by recent peer drilling results supporting the revita
Slide 17: Central Pembina
Central Pembina Summary Economics • Q1 – Q3 2020 average production of 4,579 boe/d DCET Capex ($MM) $2.1 • The epicenter of low decline and pressure-maintained EUR (Mboe) 193 development Oil IP365 (bbl/d) 93 • Ability to de-risk inventory and add additional locations Total IP365 (boe/d) 115 through
Slide 18: West Pembina
West Pembina Summary Economics • Q1 – Q3 2020 average production of 4,194 boe/d DCET Capex ($MM) $3.0 • Proven oil rich Cardium trend with undeveloped primary EUR (Mboe) 190 development acreage Oil IP365 (bbl/d) 148 • Significant offsetting production from established Cardium Total IP365 (boe/d) 160
Slide 19: Optimization
Optimization Finding low cost, high value opportunities in our base 2020 Total Optimization Program Production Commentary Optimization at Obsidian • Multi-year inventory of targeted, low 2020 Annual Average Optimization cost projects to increase base 714 boe/d (75% Oil) production, improve injection
Slide 20: Alberta Viking
Alberta Viking Strengthening AECO gas prices improving economics Summary Economics • Q1 – Q3 2020 average production of 882 boe/d DCET Capex ($MM) $1.1 • Sweet, light oil development play with significant drilling EUR (Mboe) 73 inventory, including both low risk infill and step-out development, and
Slide 21: Peace River Oil Partnership (PROP)
Peace River Oil Partnership (PROP) Ongoing optimization allowing for continued positive net income Summary PROP • Q1 – Q3 2020 average production of 3,123 boe/d, with an R25 R20 R15W5 INDEX MAP ALBERTA average of 1,701 boe/d shut-in during Q2 2020 in response T90 to low commodity prices, majority of
Slide 22: Reducing Decommissioning Liability
Reducing Decommissioning Liability Commentary Demonstrated Reduction in Well Abandonment Costs Compelling Decommissioning Liability reductions • Multi-year trend of decommissioning liability reduction Q3 2020: $605 million undiscounted • Active participant in AER’s Area-Base Closure (ABC) Near-term
Slide 23: Current Hedge Strategy and Position
Current Hedge Strategy and Position Hedging Strategy • Hedge up to 50% of production volumes after royalty • Hedge at price levels to: • Protect FFO • Protect positive NOI on specific heavy oil assets • Support economic capital program • Potential debt repayment • Hedges are done on a $CAD basis to
Slide 24: Environmental, Social & Governance
Environmental, Social & Governance Environmental Social Governance Obsidian Energy is committed to Obsidian Energy is committed to Obsidian Energy makes it a minimizing the impact of our making a positive impact in the priority to ensure all stakeholders operations on the environment. communities in
Slide 25: Experienced management and strong technical team
Experienced management and strong technical team Stephen E. Loukas, Interim President and Chief Executive Officer Financial and commercial • Vast experience in corporate transactions, capital markets, corporate finance and Strong financial, commercial leadership and capital markets $ • Mr. Loukas is
Slide 26: Appendix & Endnotes
Appendix & Endnotes 26Appendix & Endnotes 26
Slide 27: End Notes
End Notes Slide 3: Corporate Overview Slide 15-18, 20-21: Asset Slides Market Capitalization and Enterprise Value was determined at the close of business on November 27, Inventory locations are internal estimates and are subject to change. No inventory locations have been assigned 2020. Net Debt, Ta
Slide 28: Definitions and Industry Terms
Definitions and Industry Terms PDP means proved developed producing reserves as per Oil and FFO means funds flow from operations, detailed in the Non-GAAP Q1-Q3 2020 means the first 9 months of 2020 Gas Disclosures Advisory measure advisory 1P means proved reserves as per Oil and Gas Disclosures Rec
Slide 29: Non-GAAP Measures Advisory
Non-GAAP Measures Advisory 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 measures
Slide 30: Oil and Gas Information Advisory
Oil and Gas Information Advisory 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 the burner
Slide 31: Reserves Disclosure and Definitions
Reserves Disclosure and Definitions Unless otherwise noted, any reference to reserves in this presentation are based on the report ( Sproule Report ) prepared by Sproule Associates Limited dated February 3, 2020 where they evaluated one hundred percent of the crude oil, natural gas and natural gas l
Slide 32: Forward-Looking Information Advisory
Forward-Looking Information Advisory Certain statements contained in this document constitute forward-looking statements or information (collectively forward-looking statements ) within the meaning of the safe harbour provisions of applicable securities legislation. Forward-looking statements are ty
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