Obsidian Energy Ltd · TSX:OBE
Obsidian Energy — Investor Presentation (November 2021)
34 slides from Obsidian Energy's investor presentation, November 2021
Slide 1: Obsidian Energy Ltd. Corporate Presentation
Obsidian Energy Ltd. Corporate Presentation November 2021 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 CARDIUM ASSETS OPTIONALITY Low decline, oil-weighted asset base with Largest acreage holder in a world class, Flexible and responsive to commodity price significant underlying reserv
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 24,600 – 24,800 boe/d* Shares outstanding* 80.7 million Production mix (2021E) 64% oil and liquids* M
Slide 5: Obsidian Energy Strategy
OBSIDIAN ENERGY STRATEGY STRATEGY We focus on superior execution to deliver results SUPERIOR SHAREHOLDER RETURN Generate excess free Increase scale and Drive per share growth Forecast target leverage cash flow while restoring maintain or reduce cost via asset development ~1.25x Net Debt/ production
Slide 6: Our Two-Year Corporate Performance
OUR TWO-YEAR CORPORATE PERFORMANCE STRATEGY Significant growth in free cash flow accelerates debt reduction PRODUCTION OUTLOOK (boe/d) 2021 updated guidance reflects higher production, the addition of the PROP Acquisition and higher commodity prices 24,800 25,404 24,600 2020 2021E 2022F WTI US$39/bb
Slide 7: Delivering Results – Q3 2021
DELIVERING RESULTS – Q3 2021 OVERVIEW Strategy and focus continue momentum for long-term growth Q1 2021 Q2 2021 Q3 2021 2020 NETBACK ($/boe) Production 23,225 boe/d 24,651 boe/d 24,164 boe/d Capital expenditures $29.5 million $21.5 million $45.1 million $15.59 Decommissioning $3.3 million $0.5 milli
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: Peace River Oil Partnership (PROP)
PEACE RIVER OIL PARTNERSHIP (PROP) ASSETS Full ownership in quality cold-flow heavy oil Bluesky resource HIGH QUALITY PROVEN BLUESKY ASSET ‣ Completed the acquisition of the remaining 45% working interest in the Peace River Oil Property on November 24, 2021, adding: ‣ ~2,400 boe/d (84% heavy oil) of
Slide 10: Our 2021 Development Program
OUR 2021 DEVELOPMENT PROGRAM OPERATIONS H2 drilling program started earlier than anticipated and has increased production guidance WILLESDEN GREEN 36 wells (gross): 26 expected on production CRIMSON in 2021 and 10 in Q1 2022 LAKE 3-03 PAD H1 2021 4-35 PAD 13-19 PAD ‣ 9 wells rig released and on prod
Slide 11: Top Cardium Driller and Operator
TOP CARDIUM DRILLER AND OPERATOR OPERATIONS 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) Prairie Storm (12)
Slide 12: Strong Reserves Provide Drilling Opportunities for Years
STRONG RESERVES PROVIDE DRILLING OPPORTUNITIES FOR YEARS OPERATIONS Over 25 years of drilling opportunities to hold production at current levels ‣ Obsidian Energy remains conservatively booked YE 2020 versus our peers ‣ Our booked undeveloped locations over the $1.2 billion next five years are highl
Slide 13: Dedicated to Sustainability
DEDICATED TO SUSTAINABILITY CORPORATE RESPONSIBILITY Responsible stewardship for all stakeholders We believe it is our responsibility to support our communities, contribute to the economy, minimize our environmental impact and act in the best interests of all our stakeholders ENVIRONMENT SOCIAL VALU
Slide 14: Responsibly Managing Our Decommissioning Liability
RESPONSIBLY MANAGING OUR DECOMMISSIONING LIABILITY CORPORATE RESPONSIBILITY Restoring the land Committed to reducing environmental footprint INACTIVE LEGACY WELL DECOMMISSIONING LIABILITY* ‣ Active committee participation to improve industry practices INVENTORY REDUCTION (YE2019 TO YE2022) ($ millio
Slide 15: Hedging Production to Preserve Cash Flow
HEDGING PRODUCTION TO PRESERVE CASH FLOW SUMMARY Building out our hedge position as appropriate Target: up to 50% of net production volume after royalty Q3 2021 2021 YTD* 20% WTI @ 25% WTI @ C$88.72/bbl C$81.17/bbl 62% 57% 18% @ 18% @ C$3.11/mcf C$2.66/mcf Oil Gas Unhedged Oil Gas Unhedged * Hedged
Slide 16: Reserves Underpin Our Current and Future Value
RESERVES UNDERPIN OUR CURRENT AND FUTURE VALUE SUMMARY Obsidian Energy trading at substantial discount on booked reserves basis YEAR-END 2020 RESERVES SUMMARY N E T A S S E T V A L U E ( N A V ) P E R S H A R E (1) (C$ per share) Proved developed Total Total proved US$65 WTI US$75 WTI producing (PDP
Slide 17: 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 18: Appendix
Appendix TSX: OBE OTCQX: OBELF
Slide 19: 2021 Guidance - Revised
2021 GUIDANCE - REVISED APPENDIX Focused on steadily restoring production while paying down debt 2021E Revised 10/27/21 2021E Post PROP-Acquisition 2020 (Actual) (Guidance) (Guidance) Production 25,404 boe/d 24,300 – 24,500 24,600 – 24,800 Capital expenditures $57 million $136 – $138 million $141 –
Slide 20: Willesden Green – Crimson Lake
WILLESDEN GREEN – CRIMSON LAKE APPENDIX 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 retur
Slide 21: Willesden Green – East Crimson
WILLESDEN GREEN – EAST CRIMSON APPENDIX 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 underdevelope
Slide 22: West Pembina
WEST PEMBINA APPENDIX Undeveloped proven Cardium trend offers future upside for growth ‣ Proven oil rich Cardium trend with undeveloped primary and under-developed waterflood acreage ‣ Strong offsetting production from established Cardium throughout west side of Pembina ‣ Existing flexible infrastru
Slide 23: Central Pembina
CENTRAL PEMBINA APPENDIX 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 infrastruc
Slide 24: Optimization Program Results in Strong ROI
OPTIMIZATION PROGRAM RESULTS IN STRONG ROI APPENDIX 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 increase
Slide 25: 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 ‣ Management team: Stephen E. Loukas Interim President and Chief Executive Officer Peter D. Scott Senior Vice President, Chief Financial
Slide 26: Endnotes
Endnotes TSX: OBE OTCQX: OBELF
Slide 27: Endnotes
ENDNOTES ENDNOTES Slide 3: Investment Highlights Slide 7: Delivering Results – Q3 2021 Opportunities include both booked locations per NI 51-101 standards and our internal, unrisked Netback calculated as revenue (net of hedging) less royalties, operating and transportation expenses. assessment on a
Slide 28: Endnotes (Cont.)
ENDNOTES (CONT.) ENDNOTES Slide 12: Strong Reserves Provide Drilling Opportunities for Years Slide 16: Reserves Underpin our Current and Future Value Drilling opportunities include both booked locations per NI 51-101 standards and our internal, unrisked Reserves evaluation excludes inactive ARO. Our
Slide 29: Definitions and Industry Terms
DEFINITIONS AND INDUSTRY TERMS ENDNOTES 2021E means expectations for 2021 based on internal assumptions Free Cash Flow is funds flow from operations less capital and Netback is the per unit of production amount of revenue less and estimates decommissioning expenditures royalties, net operating expen
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: 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 32: 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 33: 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 34: 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 all and/or finance the repayment of our senior notes when they mature on acceptable terms or at all and/or obtain document, and the
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