Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Shareholder Meeting (June 2023)
27 slides from Obsidian Energy's shareholder meeting presentation, Jun 12, 2023
Slide 1: Annual & Special Meeting Presentation
Obsidian Energy Ltd. Annual & Special Meeting Presentation June 12, 2023 TSX:/NYSE American: OBE
Slide 2: Advisory
ADVISORY OVERVIEW This presentation should be read in conjunction with the Company’s unaudited consolidated interim financial statements and Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2023. All dollar amounts contained in this presentation are expressed in mil
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS OVERVIEW An efficient producer with operational strength, providing growth potential PRODUCTION WILLESDEN GREEN & PEMBINA PEACE RIVER Low decline, oil-weighted asset base with Largest acreage holder in a world class, High-quality cold-flow, low decline heavy oil significant und
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 Q1 2023 Production 2023E1 ~32,750 boe/d Shares outstanding 82.5 million 33,153 boe/d YoY production growth1, 2 7% Mark
Slide 5: Obsidian Energy Strategy
OBSIDIAN ENERGY STRATEGY STRATEGY We focus on superior execution throughout to deliver results Drive per share growth Use FCF from Increase scale and Target Net Debt Provide return via asset development Cardium asset to invest manage cost of $225 million of capital with and debt reduction in Peace R
Slide 6: Our Corporate Performance
OUR CORPORATE PERFORMANCE STRATEGY Growth in free cash flow allocated to modest production growth, debt reduction and return of capital to shareholders PRODUCTION OUTLOOK (boe/d) 2023 guidance reflects higher production1 33,500 32,000 30,682 24,605 1 Prior to impact of Alberta wildfires of ~525 boe/
Slide 7: Focusing on 2023
FOCUSING ON 20231 STRATEGY Balanced strategy and plans with optionality to adjust in the year 2023 plans expected to deliver 7% production growth1, solid FCF1, debt reduction and return of capital to shareholders to maximize value OPERATIONS FINANCIAL ‣ Capital investment focused on $240 million in
Slide 8: Incentive Rewards Within Peer Levels
INCENTIVE REWARDS WITHIN PEER LEVELS STRATEGY Settling employee incentive award plans in cash results in better value for shareholders ‣ Equity-based incentive compensation* is key to attract and retain qualified EQUITY INCENTIVE BURN RATE employees in the industry, and aligns performance throughout
Slide 9: 2023 Development Program
2023 DEVELOPMENT PROGRAM ASSETS First half drilling program completed across all areas PEACE RIVER 49 (48.2 NET) WELL DRILLING PROGRAM ‣ Expected average production of ~32,750* boe/d, 7% annualized growth from 2022 ‣ Ability to alter program quickly in response to commodity prices ‣ First half drill
Slide 10: Leading Cardium Play Areas
LEADING CARDIUM PLAY AREAS ASSETS Our core foundation with ~25 years of drilling opportunities for future development FIELD HISTORY CARDIUM PRODUCTION (Q1 2023) Q1 2023 Cardium production 24,496 boe/d ‣ One of North America’s most significant light oil fields 47% ‣ Development since the 1950’s; vari
Slide 11: Peace River – Growth Asset
PEACE RIVER – GROWTH ASSET ASSETS Ownership in high-quality heavy oil resource with resource with Bluesky and Clearwater upside Q1 2023 Peace River production 6,885 boe/d ‣ Cold-flow heavy oil resource developed with multi-leg horizontal wells ‣ Large, contiguous, long-term land base of ~500 section
Slide 12: Peace River Clearwater Potential
PEACE RIVER CLEARWATER POTENTIAL ASSETS Industry activity continues over emerging Clearwater formation play ‣ Leverage Bluesky operational experience ‣ Clearwater formation just above Bluesky ‣ Ability to use Bluesky infrastructure to reduce well costs ‣ Evaluate Clearwater potential while drilling
Slide 13: Viking – Significant Development Upside
VIKING – SIGNIFICANT DEVELOPMENT UPSIDE ASSETS Revitalizing light oil asset that provides highly economic returns ‣ Sweet, light oil development play with associated natural gas Q1 2023 Viking production 1,267 boe/d ‣ Significant drilling inventory, including both low risk infill and de-risked step-
Slide 14: Sustainability Highlights Over the Past Five Years
SUSTAINABILITY HIGHLIGHTS OVER THE PAST FIVE YEARS CORPORATE RESPONSIBILITY Striving to make a difference to the environment, the community and for all stakeholders; published inaugural ESG report Environment Social Governance 40% REDUCTION IN GHG >10,500 WORKER 86% INDEPENDENT EMISSIONS SAFETY INIT
Slide 15: Industry Leader in Asset Retirement Management
INDUSTRY LEADER IN ASSET RETIREMENT MANAGEMENT CORPORATE RESPONSIBILITY Our commitment to stakeholders includes responsible asset retirement as part of the full cycle of development 2019 – 2022: STRATEGY 989 Wells abandoned ‣ Committed to reducing environmental footprint 2,735 km Pipelines discontin
Slide 16: Considerable Future Value from Tax Pools
CONSIDERABLE FUTURE VALUE FROM TAX POOLS SUMMARY $2.5 billion of tax pools in unrecognized value Amount of Pools Illustrative Value of Tax Pools TAX POOL COMPOSITION Utilized by Year1 @ 8% Discount Rate2 (March 31, 2023) $200 million $352 million $4.19/share $0.3 billion $300 million $404 million $4
Slide 17: Reserves Underpin Our Current and Future Value
RESERVES UNDERPIN OUR CURRENT AND FUTURE VALUE SUMMARY Obsidian Energy trading at substantial discount on booked reserves basis YEAR-END 2022 RESERVES SUMMARY N E T A S S E T V A L U E ( N A V ) P E R S H A R E (1) (C$ per share) US$70 WTI US$80 WTI US$90 WTI Proved developed Total Total proved prod
Slide 18: Why Invest in Obsidian Energy?
WHY INVEST IN OBSIDIAN ENERGY? SUMMARY Obsidian Energy offers upside potential for shareholders ‣ Dominant Cardium land position and deep opportunity inventory of high-return wells that can be used to maintain strong FCF generation ‣ Low decline production profile and strong FCF generation allows fo
Slide 19: Endnotes
Endnotes TSX:/NYSE American: OBE
Slide 20: Endnotes
ENDNOTES ENDNOTES Slide 4: Corporate Overview Slide 8: Incentive Rewards Within Peer Levels Market capitalization and enterprise value was determined with share price on the close of business on Compensation peer group companies include Athabasca Oil Corp., Baytex Energy Corp., Bonterra Energy June
Slide 21: Endnotes (cont.)
ENDNOTES (CONT.) ENDNOTES Slide 14: Sustainability Highlights Over the Past Five Years Slide 17: Reserves Underpin our Current and Future Value GHG emission reduction is measured in tCO2e/year as a total of all emission including flared, fugitive, Reserves evaluation excludes inactive ARO. Our YE202
Slide 22: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES 2023E means the expected 2023 results, based on internal Debt is bank debt and senior notes. NYSE American means the New York Stock Exchange, American assumptions and estimates Decommissioning means decommissioning expenditures IP30 means total barrels of oil
Slide 23: 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 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 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 25: 2022 Reserves Disclosure and Definitions
2022 RESERVES DISCLOSURE AND DEFINITIONS ENDNOTES Unless otherwise noted, any reference to 2022 reserves in this presentation are based on the report (the “2022 Each of the reserves categories (proved and probable) may be divided into developed and undeveloped categories: Reserves Report”) prepared
Slide 26: Forward-Looking Information Advisory
FORWARD-LOOKING INFORMATION ADVISORY ENDNOTES Certain statements contained in this document constitute forward-looking statements or information (collectively has been no damage to key assets and infrastructure through the recent wildfires; that we will be able to get power "forward-looking statemen
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 contractual counterparties is adversely affected and potentially their ability to perform their contractual obligations the document