Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (February 2025)
40 slides from Obsidian Energy's investor presentation, Feb 25, 2025
Slide 1: Obsidian Energy Ltd. Corporate Presentation
Obsidian Energy Ltd. Corporate Presentation February 2025 TSX:/NYSE American: OBE
Slide 2: Advisory
ADVISORY OVERVIEW This presentation should be read in conjunction with the Company’s audited annual consolidated financial statements and MD&A for the year ended December 31, 2024. All dollar amounts contained in this presentation are expressed in millions of Canadian dollars unless otherwise indica
Slide 3: Corporate Overview
CORPORATE OVERVIEW OVERVIEW World class assets and experienced team delivering value; $320 million disposition of operated Pembina assets People, assets, discipline, return-focused, and execution strength CORPORATE SUMMARY1 MARKET SUMMARY Production 2024 37,474 boe/d Shares outstanding 73.7 million
Slide 4: Obsidian Energy Strategy
OBSIDIAN ENERGY STRATEGY OVERVIEW 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 intrinsic value of business Maintain prudent via production growth, light oil assets to inve
Slide 5: 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 2P reserves, generating light TOP QUALITY ASSETS and heavy oil production with substantial growth upside. S
Slide 6: Strategic Pembina Asset Transaction
STRATEGIC PEMBINA ASSET TRANSACTION PEMBINA ASSET TRANSACTION Transformational divestiture focuses Company with Peace River becoming largest asset and area of growth ‣ Entered into a purchase and sale agreement to dispose of our operated Pembina assets ‣ Transaction proceeds of $320 million consider
Slide 7: Strategic Benefits of the Transaction
STRATEGIC BENEFITS OF THE TRANSACTION PEMBINA ASSET TRANSACTION Enhanced liquidity with InPlay share position providing upside optionality FOCUSES ASSET BASE OBE 2024 PRO FORMA IMPACT (2024) ‣ Production mix weighted towards Peace River Bluesky and Clearwater heavy oil 6% 1% 9% 1% Peace River 6% ‣ P
Slide 8: 2024 Highlights
2024 HIGHLIGHTS 2024 RESULTS Successful, active year achieved strong results and returns, setting foundation for additional value in 2025 and beyond ‣ Increased production and reserves through active capital program with IP rates above internal expectations ‣ Peace River (Clearwater): Substantial pr
Slide 9: Delivering Results
DELIVERING RESULTS 2024 RESULTS Strategy and execution create momentum for long-term value 2022 2023 2024 GROWTH IN PRODUCTION (boe/d; boe/d per share) Production 30,682 boe/d 32,275 boe/d 37,474 boe/d 40,000 180 Capital expenditures $314.8 million $292.5 million $343.1 million 37,474 160 140 Decomm
Slide 10: 2024 Reserves Highlights
2024 RESERVES HIGHLIGHTS 2024 RESULTS Growth in reserves volumes and values reflect high level of development and success of our capital programs YEAR-END 2024 RESERVES SUMMARY Proved developed Total proved Total proved producing (PDP) (1P) plus probable (2P) 8th Consecutive Year of >100% reserve 20
Slide 11: 2024 Reserves Locations
2024 RESERVES LOCATIONS 2024 RESULTS Replacing production by >146% and increasing booked locations with significant future inventory potential Substantial inventory for future growth O B E LA N D BOOKED RESERVE LOCATIONS (net sections prospective for formation) (number, 2P, net) Pembina Asset Transa
Slide 12: Focus During H1 2025
FOCUS DURING H1 2025 STRATEGY Strategy to unlock shareholder value through focus on Peace River growth, share buybacks and debt repayment H1 2025 focuses on Peace River development and delineation activities as we deliver solid FFO, reduce debt levels, and continue share repurchase program to maximi
Slide 13: 2025 H1 Guidance
2025 H1 GUIDANCE STRATEGY Focus on developing and appraising our Peace River asset to set the stage for future heavy oil production growth H1 2025E HEAVY OIL LIGHT OIL Average production 33,300 – 34,300 boe/d Based on midpoint of guidance Capital expenditures $185 – $195 million Average production 1
Slide 14: H1 2025 Capital Program
H1 2025 CAPITAL PROGRAM STRATEGY Peace River development and exploration/appraisal program to delineate asset and for second half production growth 38 (36.4 NET) WELL OPERATED DRILLING PROGRAM ‣ Ability to alter program as needed in response to changing market and commodity prices H1 2025 GROSS (NET
Slide 15: 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 (operated) ~700 section
Slide 16: 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 December 31) 4,891 Average production 12,280 (Dec./21)1 (boe/d
Slide 17: Peace River H1 2025 Program
PEACE RIVER H1 2025 PROGRAM HEAVY OIL ASSETS (PEACE RIVER) Strong technical work provides foundation for substantial future development opportunities and growth NAMPA Successful 2024 program set up for 2025 development and further ‣ Mapping indicates large development potential with stacked pay pote
Slide 18: Clearwater Production Growth
HEAVY OIL ASSETS (PEACE RIVER) CLEARWATER PRODUCTION GROWTH Exploration/appraisal, development and acquisition success CLEARWATER PRODUCTION Clearwater 2024 growth ahead of internal expectations, growing (average boe/d by month) from 447 boe/d to over 4,500 boe/d due to higher well rates, accelerati
Slide 19: Light Oil Assets
LIGHT OIL ASSETS LIGHT OIL ASSETS History of highly economic returns with years of low-risk inventory Q4 2024 WG production 12,036 boe/d Willesden Green (Cardium/Belly River) WILLESDEN ‣ A high-grade light oil field with proven Cardium and emerging Belly River GREEN potential ‣ Increased working int
Slide 20: 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 74% ‣ Extensive acreage totaling 233 net sections (151 net Cardium sections)
Slide 21: Considerable Future Value from Tax Pools
CONSIDERABLE FUTURE VALUE FROM TAX POOLS SUMMARY $2.4 billion of tax pools in unrecognized value to be leveraged in our growth plan Amount of Pools Illustrative Value of Tax Pools TAX POOL COMPOSITION Utilized by Year1 @ 8% Discount Rate2 (December 31, 2024) $200 million $350 million $4.42/share $0.
Slide 22: Reserves Underpin Our Current and Future Value
RESERVES UNDERPIN OUR CURRENT AND FUTURE VALUE SUMMARY Trading at substantial discount on booked reserves basis; growing per share metrics to increase shareholder value PRO FORMA NET ASSET VALUE/SHARE YEAR-END 2024 RESERVES SUMMARY (C$ per share) TOTAL TOTAL PROVED US$65 WTI US$75 WTI US$85 WTI $35
Slide 23: Why Invest in Obsidian Energy
WHY INVEST IN OBSIDIAN ENERGY SUMMARY Peace River growth area combined with established light oil production offers upside potential for shareholders ORGANIC GROWTH STRATEGY ‣ Strategy focused on growing Peace River production and per share metrics with expectation to continue to return capital to s
Slide 24: Appendix
Appendix TSX:/NYSE American: OBE
Slide 25: Hedging Production to Preserve Cash Flow
HEDGING PRODUCTION TO PRESERVE CASH FLOW APPENDIX Continuing to build on our hedge position at constructive levels Disciplined approach to WTI OIL HEDGES AECO GAS HEDGES ($, mcf/d) risk management to ($, WTI/bbl) Collars Swaps Swaps protect cash flows for 16,000 40,000 capital investment, debt 14,00
Slide 26: 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 ‣ 4 – 8 wells per section, Apply learnings from Bluesky and Clearwater FORMATION depending on zone thickness COLORADO SHALE exploration/apprai
Slide 27: Viking – Stable Returns with Development Upside
VIKING – STABLE RETURNS WITH DEVELOPMENT UPSIDE APPENDIX Revitalized 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
Slide 28: 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 VIKING Formation Bluesky1 Clearwater2 Cardium2 W. Viking (Esther)2 Well Length 11 legs 8 legs 2.0 mile 1.5 mile DCET3 Ca
Slide 29: 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 ~290 staff & contractors with deep Strong financial, commercial and capital Stephen E. Loukas President
Slide 30: Endnotes
Endnotes TSX:/NYSE American: OBE
Slide 31: Endnotes
ENDNOTES ENDNOTES Slide 3: Corporate Overview Slide 9: Delivering Results Market capitalization determined with share price on the close of business on February 24, 2025, on Production per share data based on average boe/d and basic shares for the year, as applicable. the TSX ($8.32 per share) and c
Slide 32: Endnotes, Cont.
ENDNOTES, CONT. ENDNOTES Slide 13: H1 2025 Guidance Slide 15: Peace River Growth Asset Mid-point of guidance range: 9,440 bbl/d light oil, 12,200 bbl/d heavy oil, 2,530 bbl/d NGLs and 57.8 Booked reserve locations reflects locations as defined by our Independent, Qualified Reserves Evaluator in mmcf
Slide 33: Endnotes, Cont.
ENDNOTES, CONT. ENDNOTES Slide 22: Reserves Underpin our Current and Future Value Slide 25: Hedging Production to Preserve Cash Flow Reserves evaluation excludes inactive ARO. Our YE2024 reserves evaluation conforms to the In accordance with policies approved by our Board of Directors, the Company m
Slide 34: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES H1 2025E means the expected 2025 results for the first half of the year, Decommissioning means decommissioning expenditures NYSE American means the New York Stock Exchange, American based on internal assumptions and estimates EUR means expected ultimate recove
Slide 35: 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 36: 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 37: 2024 Reserves Disclosure and Definitions
2024 RESERVES DISCLOSURE AND DEFINITIONS ENDNOTES Unless otherwise noted, any reference to 2024 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 38: Forward-Looking Information Advisory
FORWARD-LOOKING INFORMATION ADVISORY ENDNOTES Certain statements contained in this document constitute forward-looking statements or information (collectively subject to change including regarding production levels, commodity prices, operating and other costs and capital "forward-looking statements"
Slide 39: Forward-Looking Information Advisory (Cont.)
FORWARD-LOOKING INFORMATION ADVISORY (CONT.) ENDNOTES levels, including that we will not be required to shut-in production due to low commodity prices or the further U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company; liabilities deterioration of co
Slide 40: Forward-Looking Information Advisory (Cont.)
FORWARD-LOOKING INFORMATION ADVISORY (CONT.) ENDNOTES differentials for crude oil and natural gas produced in Canada as compared to other markets, and transportation restrictions, including pipeline and railway capacity constraints; fluctuations in foreign exchange or interest rates; unanticipated o
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