Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (March 2021)
33 slides from Obsidian Energy's investor presentation, March 2021
Slide 1: Obsidian Energy Corporate Presentation March 2021
Obsidian Energy Corporate Presentation March 2021
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 Shares Outstanding MM 74 Peace River 3,196 boe/d Q3 2020 Market Capitalization MM $129 Cold flow heavy oil Manage base production Net Debt MM $479 Enterprise Value MM $608 Corporate Summary Reserves (2P, YE 2020) mmboe 128 RLI (2P, YE 2020) years 1
Slide 4: Short-term Strategic Priorities & Results
Short-term Strategic Priorities & 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 base business • R
Slide 5: Long-term Strategic Priorities
Long-term Strategic Priorities Superior Shareholder Return Generate excess free cash flow while holding Create scale and further Drive per share growth via production flat with decrease cost structure via organic development and growth optionality at Cardium consolidation debt pay down increased com
Slide 6: Creating The Cardium Champion
Creating The Cardium Champion On September 21st 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 • Creates the Cardium Champion wit
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? ✓ 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% Guidance from 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. OBE is conservatively booked with one of the highest ratios of PDP/1P of all identified peer companies • OBE has a significan
Slide 12: Cardium Play Fairways
Cardium Play Fairways A Large High-Graded Inventory West Pembina Central Pembina 132 Type Curve Locations R10W5 INDEX MAP 680 Type Curve Locations 48 Booked Reserve 25 Booked Reserve Locations (Net) Locations (Net) • Well established • Individual fairways and productive trend unit boundaries in sign
Slide 13: Leading Cardium Well Performance
Leading Cardium Well Performance Cumulative oil rate over time in the Willesden Green Field 100,000 Cumulative Light Oil since Rig Release 90,000 80,000 70,000 (bbl/well) 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 3
Slide 14: Cardium Growth & Operational Improvements
Cardium Growth & Operational Improvements Total Cardium Production Commentary • Our 2017-2020 drilling programs in Crimson Lake 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 2020 i
Slide 15: Execute Operationally
Execute Operationally H1 2021 Development Program Crimson Lake Commentary R8W5 3 kms INDEX MAP • Seven well H1 2021 drilling program builds on drilling results 2 miles with wells adjacent to or nearby 2020 wells that produced above average production rates at low operating costs • One rig program ex
Slide 16: Crimson Lake
Crimson Lake Summary Economics • Q1 – Q3 2020 average production of 9,715 boe/d DCET Capex ($MM) $3.2 • Obsidian Energy cornerstone for revitalized primary EUR (Mboe) 229 development on our Cardium acreage • Banked oil from historical pressure maintenance in Oil IP365 (bbl/d) 157 WGCU#9 Total IP365
Slide 17: East Crimson
East Crimson Summary Economics • Q1 – Q3 2020 average production of 3,127 boe/d DCET Capex ($MM) $2.9 • Continued Eastward extension of the successful EUR (Mboe) 203 Crimson Lake development program Oil IP365 (bbl/d) 136 • Area has been de-risked by recent peer drilling results supporting the revita
Slide 18: Central Pembina
Central Pembina Summary Economics • Q1 – Q3 2020 average production of 4,579 boe/d DCET Capex ($MM) $2.1 • The epicenter of low decline and pressure-maintained EUR (Mboe) 193 development Oil IP365 (bbl/d) 102 • Ability to de-risk inventory and add additional locations through geological and reservoi
Slide 19: West Pembina
West Pembina Summary Economics • Q1 – Q3 2020 average production of 4,194 boe/d DCET Capex ($MM) $3.0 • Proven oil rich Cardium trend with undeveloped EUR (Mboe) 190 primary development acreage Oil IP365 (bbl/d) 148 • Significant offsetting production from established Cardium players throughout the
Slide 20: Optimization
Optimization Finding low cost, high value opportunities in our base 2020 Total Optimization Program Production Commentary Optimization at Obsidian 1,400 • Multi-year inventory of targeted, low 1,200 2020 Annual Average Optimization cost projects to increase base 735 boe/d (75% Oil) production, impro
Slide 21: Alberta Viking
Alberta Viking Strengthening AECO gas prices improving economics Summary Economics • Q1 – Q3 2020 average production of 882 boe/d DCET Capex ($MM) $1.1 • Sweet, light oil development play with significant EUR (Mboe) 73 drilling inventory, including both low risk infill and step- out development, and
Slide 22: 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 R25 R20 R15W5 an average of 1,701 boe/d shut-in during Q2 2020 in INDEX MAP ALBERTA response to low commodity prices, majority of the
Slide 23: 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: $605 million undiscounted • Active participant in AER’s Area-Base Closure (ABC) Near-term
Slide 24: Current Hedge Strategy and Position
Current Hedge Strategy and Position Physical Oil Hedges (CAD$/bbl) Hedging Strategy WTI Heavy Oil Hedge Oil Differential • Target to hedge up to 50% of production Locked-in WTI, 7,500 Light oil volumes after royalty differentials and differential Heavy Oil foreign exchange based on WTI Light Oil • H
Slide 25: Environmental, Social & Governance
Environmental, Social & Governance Environmental Social Governance • Obsidian Energy is committed • Obsidian Energy is committed • Obsidian Energy makes it a to minimizing the impact of to making a positive impact in priority to ensure all our operations on the the communities in which we stakeholde
Slide 26: 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 Strong financial, and leadership $$ commercial and capital • Mr. Loukas is a part
Slide 27: Appendix & Endnotes
Appendix & Sa: Endnotes A Mad
Slide 28: End Notes
End Notes Slide 3: Corporate Overview Slide 15: Execute Operationally Market Capitalization and Enterprise Value was determined at the close of business on February 26, Mid-point of H1 2021 Guidance Range: 10,225 bbl/d light oil, 2,775 bbl/d heavy oil, 1,950 bbl/d NGLs and 49.5 2021. Net Debt, Tax P
Slide 29: Definitions and Industry Terms
Definitions and Industry Terms PDP means proved developed producing reserves as per Oil and Gas Disclosures Advisory FFO means funds flow from operations, detailed in the Non-GAAP 2019 Reserves references are based on the report prepared by measure advisory Sproule Associates Limited dated February
Slide 30: 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 31: 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 32: 2020 Reserves Disclosure and Definitions
2020 Reserves Disclosure and Definitions Unless otherwise noted, any reference to 2020 reserves in this presentation are based on the report ("Sproule Report") prepared by Sproule Associates Limited dated February 10, 2021 where they evaluated one hundred percent of the crude oil, natural gas and na
Slide 33: 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