Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (May 2022)
35 slides from Obsidian Energy's investor presentation, May 2022
Slide 1: Obsidian Energy Ltd. Corporate Presentation
Obsidian Energy Ltd. Corporate Presentation May 2022 TSX:/NYSE American: OBE
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 ended March 31, 2022. All dollar amounts contained in this presentation are expressed in millions of Ca
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 Production 2022E 30,800 boe/d Shares outstanding 82.1 million Production mix (2022E) 64% oil and liquids Market capita
Slide 5: Focusing on 2022
FOCUSING ON 2022 OVERVIEW 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 6: Delivering Results – Q1 2022
DELIVERING RESULTS – Q1 2022 OVERVIEW Strategy and focus continue momentum for long-term growth Q3 2021 Q4 2021 Q1 2022 2021 NETBACK ($/boe) Production 24,164 boe/d 26,352 boe/d 29,407 boe/d Capital expenditures $45.1 million $44.8 million $103.4 million $29.76 Decommissioning $1.6 million $2.7 mill
Slide 7: Our 2022 Development Program
OUR 2022 DEVELOPMENT PROGRAM ASSETS First half drilling program started early in 2022, targeting Cardium and PROP areas PEACE RIVER 29 wells (28.0 net) front-half weighted drilling program ‣ Further demonstrates strength of asset base and 2-05 PAD operational excellence ‣ Four-rig continuous drill p
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 (Q1 2022) Q1 2022 Cardium production 21,878 boe/d ‣ One of North America’s most significant light oil fields 23% ‣ Development since the 1950’s; va
Slide 9: Top Cardium Driller and Operator
TOP CARDIUM DRILLER AND OPERATOR ASSETS Our development program produces leading Cardium well performance compared to peers LEADING CARDIUM WELL PERFORMANCE: WILLESDEN GREEN FIELD Cumulative production per well (bbl/well) Obsidian (58) Baccalieu (11) Entrada (21) Yangarra (25) InPlay (24) Bonterra (
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 – Revitalized Core Area
PEACE RIVER – REVITALIZED CORE AREA ASSETS Full ownership in high-quality cold-flow heavy oil Bluesky resource with Clearwater upside Q1 2022 Peace River production 6,469 boe/d ‣ Reliable and steady Bluesky production with shallow declines ‣ Large, contiguous cold-flow heavy oil resource developed w
Slide 14: Peace River Drilling Update
PEACE RIVER DRILLING UPDATE ASSETS Successful return to Bluesky development H2 2021 DRILL PROGRAM PRODUCTION ‣ Drilled four Bluesky wells in late 2021 ‣ Four wells on production averaged 447 boe/d per well (bbl/d) (IP90 rate) 447 bbl/d ‣ Drilled four Bluesky wells in the first half of 2022 ‣ Two wel
Slide 15: Peace River Clearwater Potential
PEACE RIVER CLEARWATER POTENTIAL ASSETS Market excitement over emerging Clearwater formation play ‣ 487 sections with Bluesky and Clearwater heavy oil rights in total ‣ Leverage Bluesky operational experience ‣ Competitive royalty structure with low royalty rates ‣ Substantial opportunity for future
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 across our asset portfolio ‣ Low-cost, high value growth opportunities with minimal capital expenditures ‣ Significant potential with >2,000 active wells t
Slide 17: Dedicated to Sustainability
DEDICATED TO SUSTAINABILITY CORPORATE RESPONSIBILITY Responsible stewardship for all stakeholders We believe it is our responsibility to support our communities, contribute to the economy, minimize our environmental impact and act in the best interests of all our stakeholders ENVIRONMENT SOCIAL VALU
Slide 18: Responsibly Managing Our Decommissioning Liability
RESPONSIBLY MANAGING OUR DECOMMISSIONING LIABILITY CORPORATE RESPONSIBILITY Restoring the land Committed to reducing environmental footprint INACTIVE LEGACY WELL INACTIVE VS. ACTIVE ARO ‣ Active committee participation to improve industry practices INVENTORY REDUCTION (YE2019 TO YE2022) ($ millions)
Slide 19: Hedging Production to Preserve Cash Flow
HEDGING PRODUCTION TO PRESERVE CASH FLOW SUMMARY Continuing to build on our hedge position at constructive levels HEDGED OIL ($, WTI/BBL) 2022 YTD* $104.53 14% WTI @ 8,633 50% hedge level C$111.28/bbl $125.62 4,060 15% @ Q1 Q2 Q3 Q4 C$4.68/mcf HEDGED AECO GAS 71% ($, MCF) $4.63 $4.65 $4.74 50% hedge
Slide 20: Strong Reserve Growth Provides Drilling for Years
STRONG RESERVE GROWTH PROVIDES DRILLING FOR YEARS SUMMARY Lowest valuation compared to peers despite increase in reserves ‣ 231 net PDP locations including 170 net locations in the YE 2021 Cardium, 26 net locations in the Bluesky and 1.5 net locations in the Clearwater $1.8 billion ‣ Our booked unde
Slide 21: Reserves Underpin Our Current and Future Value
RESERVES UNDERPIN OUR CURRENT AND FUTURE VALUE SUMMARY Obsidian Energy trading at substantial discount on booked reserves basis YEAR-END 2021 RESERVES SUMMARY N E T A S S E T V A L U E ( N A V ) P E R S H A R E (1) (C$ per share) Proved developed Total Total proved US$70 WTI US$80 WTI producing (PDP
Slide 22: 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 accelerate development at appropriate WTI levels ‣ Revitalized core area at Peace River with compe
Slide 23: Appendix
Appendix TSX:/NYSE American: OBE
Slide 24: 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 ‣ ~240 employees EMPLOYEES FINANCIAL AND COMMERCIAL ‣ Management team: Deeply experienced with long track Strong financial, commercial and capital record,
Slide 25: 2021 Reserves Highlights
2021 RESERVES HIGHLIGHTS APPENDIX Strong growth in reserves values and volumes generating >200% reserve replacement and >2.4x recycle ratios YEAR-END 2021 RESERVES SUMMARY Proved developed Total proved Total proved producing (PDP) (1P) plus probable (2P) Reserves volume 71.3 MMboe 113.7 MMboe 147.8
Slide 26: Endnotes
Endnotes TSX:/NYSE American: OBE
Slide 27: Endnotes
ENDNOTES ENDNOTES Slide 4: Corporate Overview Slide 9: Top Cardium Driller and Operator Market capitalization and enterprise value was determined with share price at the close of business on Cumulative Light Oil since Rig Release. Shown on a gross basis. Not adjusted for well length. May 2, 2022. Co
Slide 28: Endnotes (Cont.)
ENDNOTES (CONT.) ENDNOTES Slide 15: Peace River Clearwater Potential Slide 20: Strong Reserves Provide Drilling Opportunities for Years Drilling opportunities include both booked locations per NI 51-101 standards and our internal, unrisked Drilling opportunities include both booked locations per NI
Slide 29: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES 2021E meant the expected 2021 results, based on internal Company, Obsidian Energy or OBE means Obsidian Energy Ltd.; OPEX means operating expenses assumptions and estimates as applicable PROP means Peace River Oil Partnership 2022E means forecast expectations
Slide 30: 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 31: Non-GAAP Measures Reconciliations
NON-GAAP MEASURES RECONCILIATIONS ENDNOTES NET DEBT (in $ millions) Q3 2021 Q4 2021 Q1 2022 FFO and FCF (in $ millions) Q3 2021 Q4 2021 Q1 2022 Long-term debt Cash flow from operating activities $65.5 $62.6 $83.9 Syndicated credit facility $340.0 $321.5 $311.8 Change in non-cash working capital ($9.
Slide 32: 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 33: 2021 Reserves Disclosure and Definitions
2021 RESERVES DISCLOSURE AND DEFINITIONS ENDNOTES Unless otherwise noted, any reference to 2021 reserves in this presentation are based on the report (“Sproule Reserve Definitions Report”) prepared by Sproule Associates Limited dated January 28, 2022 where they evaluated one hundred percent of the c
Slide 34: 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 and FOFI contained in this document, the Company has made "forward-looking statements") within the
Slide 35: Forward-Looking Information Advisory (Cont.)
FORWARD-LOOKING INFORMATION ADVISORY (CONT.) ENDNOTES Although the Company believes that the expectations reflected in the forward-looking statements and FOFI connection with the PROP acquisition when they mature on acceptable terms or at all and/or obtain debt and/or contained in this document, and