Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Merger or Acquisition (January 2021)
33 slides from Obsidian Energy's merger presentation, Jan 5, 2021
Slide 1: Obsidian Energy Corporate Presentation January 2021
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 January 2021Filed by Obsidian Energy Ltd. (Commission File No. 001-32895) Pursuant to Rule 425 under the S
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 Mark Market et S Summar ummary y Ticker Symbol OBE Peace River MM Shares Outstanding 74 3,196 boe/d Q3 2020 Cold flow heavy oil MM Market Capitalization $65 Manage base production MM Net Debt $479 MM Enterprise Value $544 Corpor Corpora at te e Summar Summary y mmboe Reserves (2P
Slide 4: Short-term Strategic Priorities & Results
Short-term Strategic Priorities & Results Short-t Short-te erm rm P Priorities riorities • Pursue successful acquisition of Bonterra to create “The Cardium Champion” • Transformational opportunity for both companies’ shareholders • Continue operational momentum and cost reduction initiatives to impr
Slide 5: Long-term Strategic Priorities
Long-term Strategic Priorities Superior Shareholder Return Generate excess free cash flow Drive per share growth via Create scale and further while holding production flat organic development and debt decrease cost structure via with growth optionality at pay down Cardium consolidation strategy incr
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 • Creates the Cardium Champion wi
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 Wh Why y Is Is T This his T Tr ransaction Compellin ansaction Compelling F g Fo or Both Ob r Both Obs sidian Ener i
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 OPEX Commen Comment tar ary y Exceeding our 2020 OPEX and G&A per boe guidance Operating Expenses (OPEX) • Total reduction in OPEX per boe of 27% from 2017 to Updated 2020 mid-point of 2020 Guidance ($11.10/boe) Guidance • 2020 OPEX per boe continues to decrease desp
Slide 10: Corporate Breakeven Analysis
Corporate Breakeven Analysis Br Break eake ev ve en n US$ US$ WTI/bbl WTI/bbl - - H His ist to oric rica al l and and Pr Project ojecte ed Obsidian / Obsid d Obsidian / Obsidian & Bon ian & Bont terr erra a P Pr ro o F Forma orma Unhedged Cash Flow (US$/bbl) 2020 Breakeven Price ~$US39 WTI including
Slide 11: Undeveloped Reserves
Undeveloped Reserves 2019 2019 PDP PDP/ /1P 1P R Ra at tio io 2019 2019 2P 2P L Loc oca at tions/Section ions/Section Commen Comment tar ary y • OBE has booked undeveloped locations based on achievable capital spending over the next 5 years. OBE is conservatively booked with one of the highest ratio
Slide 12: Cardium Play Fairways: A Large High-Graded Inventory
Cardium Play Fairways A Large High-Graded Inventory W We es st t P Pembina embina Cen Cent tr ra al l P Pe embina mbina R10W5 INDEX MAP 132 680 Type Curve Locations Type Curve Locations • Well established productive • Individual fairways and unit trend significantly de-risked by boundaries in histor
Slide 13: Leading Cardium Well Performance
Leading Cardium Well Performance Cumula Cumulativ tive e o oil il r ra at te e o ov ve er time in the r time in the Willesden Willesden G Gr reen Field een Field 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1 2345 6789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Slide 14: Cardium Growth & Operational Improvements
Cardium Growth & Operational Improvements Commen Comment tar ary y T To ot ta al l Car Card diu ium m P Pr ro oduction duction • 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 • OP
Slide 15: Execute Operationally: H1 2021 Development Program
Execute Operationally H1 2021 Development Program Crimson Lak Crimson Lake e Commen Comment tar ary y • Seven well H1 2021 drilling program builds on drilling results with wells 3 kms R8W5 INDEX MAP adjacent to or nearby 2020 wells that produced above average production 2 miles rates at low operatin
Slide 16: Crimson Lake
Crimson Lake Summar Summary y E Ec conomics onomics • Q1 – Q3 2020 average production of 9,715 boe/d DCET Capex ($MM) $3.2 • Obsidian Energy cornerstone for revitalized primary development EUR (Mboe) 229 on our Cardium acreage Oil IP365 (bbl/d) 156 • Banked oil from historical pressure maintenance i
Slide 17: East Crimson
East Crimson E Ec conomics onomics Summar Summary y • Q1 – Q3 2020 average production of 3,127 boe/d DCET Capex ($MM) $2.9 • Continued Eastward extension of the successful Crimson Lake EUR (Mboe) 203 development program Oil IP365 (bbl/d) 136 • Area has been de-risked by recent peer drilling results
Slide 18: Central Pembina
Central Pembina E Ec conomics onomics Summar Summary y • Q1 – Q3 2020 average production of 4,579 boe/d DCET Capex ($MM) $2.1 • The epicenter of low decline and pressure-maintained development EUR (Mboe) 193 • Ability to de-risk inventory and add additional locations through Oil IP365 (bbl/d) 93 geo
Slide 19: West Pembina
West Pembina E Ec conomics onomics Summar Summary y • Q1 – Q3 2020 average production of 4,194 boe/d DCET Capex ($MM) $3.0 • Proven oil rich Cardium trend with undeveloped primary EUR (Mboe) 190 development acreage Oil IP365 (bbl/d) 148 • Significant offsetting production from established Cardium pl
Slide 20: Optimization: Finding low cost, high value opportunities in our base
Optimization Finding low cost, high value opportunities in our base Commen Comment tar ary y 2020 2020 T To ot ta al l Optimiz Optimiza ation tion P Pr ro ogr gram am P Pr ro oduction duction Optimization at Obsidian 1,400 • Multi-year inventory of targeted, low cost 1,200 2020 Annual Average Optimi
Slide 21: Alberta Viking
Alberta Viking Strengthening AECO gas prices improving economics Summar Summary y E Ec conomics onomics • Q1 – Q3 2020 average production of 882 boe/d DCET Capex ($MM) $1.1 • Sweet, light oil development play with significant drilling inventory, EUR (Mboe) 73 including both low risk infill and step-
Slide 22: Peace River Oil Partnership (PROP)
Peace River Oil Partnership (PROP) Ongoing optimization allowing for continued positive net income Summar Summary y PR PROP OP • Q1 – Q3 2020 average production of 3,123 boe/d, with an average R25 R20 R15W5 INDEX MAP ALBERTA of 1,701 boe/d shut-in during Q2 2020 in response to low T90 commodity pric
Slide 23: Reducing Decommissioning Liability
Reducing Decommissioning Liability Commentary Demons Demonstr tra at ted R ed Reduction eduction i in W n We ell ll Abandonmen Abandonment t Cos Cost ts s Compelling Decommissioning Liability reductions • Multi-year trend of decommissioning liability reduction Q3 2020: $605 million undiscounted • Ac
Slide 24: Current Hedge Strategy and Position
Current Hedge Strategy and Position Physical Physical O Oil Hedges il Hedges Hedging Hedging Str Stra at te eg gy y (CAD$ (CAD$ WTI/bbl) WTI/bbl) • Target to hedge up to 50% of production volumes after 1, 5 0 0 royalty Locked-in WTI and differentials on 1, 2 50 • Hedge at price levels to: lowest API
Slide 25: Environmental, Social & Governance
Environmental, Social & Governance Environmental Social Governance • Obsidian Energy makes it a priority to • Obsidian Energy is committed to • Obsidian Energy is committed to ensure all stakeholders have a clear minimizing the impact of our making a positive impact in the understanding of our appro
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 and leadership Strong financial, commercial and • Mr. Loukas is a partner, managi
Slide 27: Appendix & Endnotes
Appendix & Endnotes 27Appendix & Endnotes 27
Slide 28: End Notes
End Notes Slide 3: Corporate Overview Slide 16-19, 21-22: Asset Slides Market Capitalization and Enterprise Value was determined at the close of business on January 4, Inventory locations are internal estimates and are subject to change. No inventory locations have been assigned 2021. Net Debt, Tax
Slide 29: 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 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: 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 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 ty
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