Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (January 2022)
27 slides from Obsidian Energy's investor presentation, Jan 24, 2022
Slide 1: Obsidian Energy Ltd. 2022 Guidance Presentation
Obsidian Energy Ltd. 2022 Guidance Presentation January 24, 2022 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 and nine months ended September 30, 2021. All dollar amounts contained in this presentation are express
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS OVERVIEW An efficient producer with operational strength, providing growth potential PRODUCTION WILLESDEN GREEN & PEMBINA PEACE RIVER ASSETS Low decline, oil-weighted asset base with ASSETS High-quality cold-flow, low decline heavy oil significant underlying reserves and peer L
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 24,605 boe/d Shares outstanding* 80.8 million Production mix (2021E) 66% oil and liquids Market capit
Slide 5: 2021 Highlights
2021 HIGHLIGHTS STRATEGY Successful year provides strong foundation for growth in 2022 ‣ Acquired remaining 45% interest in the Peace River Oil Partnership ‣ Successful equity issue with oversubscribed subscription offering ‣ Successfully completed 2021 development program with quick transition into
Slide 6: Focusing on 2022
FOCUSING ON 2022 STRATEGY Building our strategy and plans for the year We will evaluate and determine the right balance between production growth, debt repayment and return of capital to maximize stakeholder value as we move forward through 2022 OPERATIONS FINANCIAL ‣ First-half weighted development
Slide 7: 2022 Guidance
2022 GUIDANCE STRATEGY Balancing production growth, debt reduction from FCF generation and the potential for returns of capital 2022E Average production1 29,100 – 30,100 boe/d Capital expenditures $143 – $149 million Decommissioning expenditures2 $14 million Net operating expenses $12.00 – $12.90/bo
Slide 8: Leading Cardium Play Areas
LEADING CARDIUM PLAY AREAS ASSETS Our growth foundation with >25 years of drilling opportunities for future development FIELD HISTORY CARDIUM PRODUCTION (Q3 2021) Q3 2021 Cardium production ~19,800 boe/d ‣ One of North America’s most significant light oil fields 23% ‣ Development since the 1950’s; v
Slide 9: Our 2022 Development Program
OUR 2022 DEVELOPMENT PROGRAM OPERATIONS First half drilling program started early in 2022, targeting Cardium and PROP areas PEACE RIVER OIL PROPERTY (PROP) 29 wells (28.0 net) front-half weighted drilling program ‣ Further demonstrates strength of asset base and 2-05 PAD operational excellence ‣ Fou
Slide 10: Willesden Green – Crimson Lake
WILLESDEN GREEN – CRIMSON LAKE ASSETS Cornerstone for revitalized primary development on Cardium acreage ‣ Top quality reservoir with banked oil from historical pressure maintenance ‣ Historically under-developed due to challenges for vertical drilling ‣ Horizontal development proving strong returns
Slide 11: Willesden Green – East Crimson
WILLESDEN GREEN – EAST CRIMSON ASSETS Eastward extension of successful Crimson Lake development program ‣ Horizontal development proving strong returns and quick payouts ‣ Flexible, operated infrastructure shared with Crimson Lake ‣ Combination of pressure supported edge drilling and underdeveloped
Slide 12: Central Pembina
CENTRAL PEMBINA ASSETS Centre of low declines supports horizontal drilling and future growth through waterfloods ‣ Low decline, pressure-maintained development ‣ Ability to de-risk opportunities and add additional locations through geological and reservoir modelling ‣ Existing wells and infrastructu
Slide 13: Peace River Oil Partnership (PROP)
PEACE RIVER OIL PARTNERSHIP (PROP) ASSETS Full ownership in high-quality cold-flow heavy oil Bluesky resource with Clearwater upside ‣ Reliable and steady Bluesky production with shallow declines ‣ Large, contiguous cold-flow heavy oil resource developed with multi-leg horizontal wells ‣ Significant
Slide 14: Peace River Drilling Update
PEACE RIVER DRILLING UPDATE ASSETS Successful return to Bluesky development with three wells each currently producing at ~500 bbl/d of oil 6-31 PAD PRODUCTION TO DATE (bbl/d) ‣ Drilled four Bluesky wells in the late 2021 ‣ Pad 6-31 : three wells on production at 1,500 bbl/d+ 500 bbl/d ‣ Currently dr
Slide 15: PROP Clearwater Potential
PROP CLEARWATER POTENTIAL ASSETS Market excitement over emerging Clearwater formation play ‣ 473 sections with Clearwater heavy oil rights ‣ 65+ Clearwater drilling opportunities currently identified in the Dawson field alone ‣ Leverage Bluesky operational experience ‣ Competitive royalty structure
Slide 16: Optimization Program Results in Strong Returns
OPTIMIZATION PROGRAM RESULTS IN STRONG RETURNS ASSETS Modest capital spend results in improved existing well performance, maintaining production in Central Pembina ‣ Low-cost, high value growth opportunities with minimal capital expenditures ‣ Multi-year opportunities of low-cost projects to increas
Slide 17: Hedging Production to Preserve Cash Flow
HEDGING PRODUCTION TO PRESERVE CASH FLOW SUMMARY Building out our hedge position as appropriate 2022 YTD* FINANCIAL Notional Volume Pricing (CAD) Oil - WTI 6% WTI @ C$100.89/bbl January 2022 8,016 bbl/d $98.82/bbl February 2022 7,750 bbl/d $101.81/bbl 4% @ March 2022 2,750 bbl/d $104.31/bbl C$4.63/m
Slide 18: Why Invest in Obsidian Energy?
WHY INVEST IN OBSIDIAN ENERGY? SUMMARY Obsidian Energy offers upside potential for shareholders ‣ Strategy focused on maintaining operational excellence, improving our debt leverage and delivering top quartile total shareholder returns ‣ Dominant Cardium land position and deep opportunity inventory
Slide 19: Endnotes
Endnotes TSX: OBE OTCQX: OBELF
Slide 20: Endnotes
ENDNOTES ENDNOTES Slide 4: Corporate Overview Slide 8: Leading Cardium Play Areas Market capitalization and enterprise value was determined with share price at the close of business on Individual play fairways are Obsidian Energy defined trends displaying similar reservoir and geological January 21,
Slide 21: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES 2021E means expectations for 2021 based on internal assumptions Decommissioning means decommissioning expenditures MMbbl means millions of barrels and estimates DSU means a deferred share unit granted under the DSU Plan MMboe means million barrels of oil equiv
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: Non-GAAP Measures Reconciliations
NON-GAAP MEASURES RECONCILIATIONS ENDNOTES NET DEBT (in $ millions) Q3 2021 2022E Long-term debt FFO and FCF (in $ millions) US$70 WTI US$75 WTI US$80 WTI Syndicated credit facility $340.0 Cash flow from operating activities $260 $275 $292 Senior notes $58.9 Change in non-cash working capital $22 $2
Slide 24: 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 25: 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 26: 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 27: 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 under our credit facility is reduced, that the Company is unable to renew our credit facilities on acceptable terms or at document,
Obsidian Energy — Investor Presentation (January 2022) on 6ix