Core Points - Obsidian Energy is set to release its first quarter 2025 financial and operational results on May 7, 2025, before North American markets open [1] - The Annual and Special Meeting of the Company is scheduled for the same day, May 7, 2025, at 1:00 p.m. MT [2] - A webcast presentation will follow the meeting at 2:00 p.m. MT, hosted by the President and CEO, Stephen Loukas, along with other management members [3] Meeting and Presentation Details - Access to the Annual and Special Meeting will be limited to essential personnel, registered shareholders, proxyholders, and invited guests [2] - The webcast presentation will be available live on the Company's website and will include a question-and-answer session afterward [4] - Participants can submit questions in advance by registering on the webcast portal or emailing investor relations [4]

We are currently offering a free two-week trial to Distressed Value Investing . Join our community to receive exclusive research about various companies and other opportunities, along with full access to my portfolio of historic research that now includes over 1,000 reports on over 100 companies.Obsidian Energy (NYSE: OBE ) received a fair price for its sale of operated Pembina assets to InPlay Oil for CAD 320 million ($229 million). Over 65% of the deal price was in cash, and this allowed Obsidian to nearl ...

Group 1 - The article focuses on analyzing oil and gas companies, particularly Obsidian Energy, to identify undervalued opportunities in the sector [1] - Obsidian Energy has faced long-standing debt issues, but has recently used improved debt levels to acquire the remaining interest in a heavy oil project [2] - The oil and gas industry is characterized as a boom-bust, cyclical market, requiring patience and experience for successful investment [2] Group 2 - The analysis includes a breakdown of companies' balance sheets, competitive positions, and development prospects [1] - The author has a beneficial long position in the shares of IPOOD, indicating a personal investment interest [3]

Core Viewpoint - Obsidian Energy has successfully completed the divestiture of its operated Pembina assets to InPlay Oil Corp for approximately $320 million, which will enhance the company's financial position and allow for debt reduction [2][3][4]. Group 1: Transaction Details - The total consideration for the Pembina assets includes $220 million in cash, $85 million in InPlay common shares, and a 34.6% working interest in the Willesden Green Cardium Unit 2, valued at approximately $15 million [3][5]. - The effective date of the transaction is December 1, 2024, and Obsidian Energy retains its non-operated holdings in the Pembina Cardium Unit 11 [2][3]. Group 2: Financial Impact - The cash proceeds from the transaction were utilized to pay down debt, leaving approximately $30 million drawn on a reduced $235 million syndicated credit facility [4]. - The completion of the transaction has led to an extension of the revolving period and maturity dates of the credit facility by one year, now set to May 31, 2026, and May 31, 2027, respectively [4]. Group 3: Strategic Positioning - The transaction allows Obsidian Energy to focus on growing its Peace River asset and positions the company to benefit from potential future appreciation in the value of its InPlay share position [3][4]. - Following the transaction, Obsidian Energy owns approximately 33% of the issued and outstanding InPlay shares, totaling 54,838,709 shares [5][6].

Core Viewpoint - Obsidian Energy announced an update regarding its offer to purchase up to $3.0 million of its outstanding Senior Unsecured Notes, which expired on March 11, 2025, with no valid tenders received [1][2]. Group 1: Offer Details - The offer was made to purchase cash for an aggregate amount of $3.0 million of outstanding 11.95 percent Senior Unsecured Notes due July 27, 2027 [1]. - The offer was subject to the terms and conditions outlined in the Offer to Purchase dated February 26, 2025 [1]. Group 2: Tender Results - No Notes were validly tendered before the deadline of 5:00 p.m. EDT on March 11, 2025 [2]. - The company currently has an aggregate principal amount of $114.2 million of Notes outstanding [2]. Group 3: Corporate Information - Obsidian Energy shares are listed on both the Toronto Stock Exchange and the NYSE American under the symbol "OBE" [4].

Core Points - Obsidian Energy has filed its audited Consolidated Financial Statements for the year ended December 31, 2024, along with the related Management's Discussion and Analysis (MD&A) [1] - The company has also submitted its Annual Information Form for the year ended December 31, 2024, which includes reserves data and other oil and gas information as required by National Instrument 51-101 [1] - The Annual Report on Form 40-F for the year ended December 31, 2024, will be filed with the U.S. Securities and Exchange Commission [1] Document Access - Copies of the filed documents can be obtained electronically on the SEDAR+ website, EDGAR website, or Obsidian Energy's website [2] - Hard copies of the audited Consolidated Financial Statements and related MD&A are available upon request, free of charge, through the Investor Relations group or the company's website [2]

Production and Reserves - Average annual production increased by 16% to 37,474 boe/d in 2024, surpassing previous guidance[6] - Reserves increased significantly, with 148% of 2024 production replaced on a proved developed producing basis[11] - The Peace River Clearwater Acquisition added approximately 1,700 boe/d of production and 6.3 Mmboe of 2P reserves[16] - The company completed 66 operated wells in 2024, with 65 wells brought on production by year-end[24] Financial Performance - Funds Flow from Operations (FFO) rose 14% to $432.0 million in 2024, with fourth quarter FFO at $107.7 million[9] - The company recorded a net loss of $202.6 million in 2024, attributed to a non-cash impairment charge related to the Pembina assets[10] - Free cash flow (FCF) for 2024 was $65 million, slightly below the guidance of $69 million, with FCF per share at $0.86[1] - Cash flow from operating activities for Q4 2024 was $115.0 million, a decrease of 2.3% from $117.7 million in Q4 2023[47] - Funds flow from operations increased to $107.7 million in Q4 2024, up 10.7% from $97.0 million in Q4 2023[47] - Free cash flow for the year ended December 31, 2024, was $65.0 million, compared to $58.5 million in 2023, reflecting a 11.4% increase[47] - Netback for the year ended December 31, 2024, was $486.7 million, an increase of 12.1% from $434.3 million in 2023[48] Capital Expenditures and Debt - Capital expenditures totaled $343.1 million in 2024, up from $292.5 million in 2023, focusing on production growth in the Peace River area[9] - Net debt increased to $411.7 million at December 31, 2024, primarily due to the $80.5 million funding of the Peace River Clearwater Acquisition[10] - Capital expenditures for 2024 were guided at $320 – $335 million, with actual expenditures totaling $343.1 million[1] - Net debt increased to $412 million, compared to the guidance of $390 million, resulting in a net debt to FFO ratio of 1.0[1] - Total net debt as of December 31, 2024, was $411.7 million, up from $330.2 million in 2023, indicating a 24.6% increase[50] Shareholder Actions - The company repurchased 4.5 million shares for $41.7 million under its normal course issuer bid in 2024[7] - The company announced a definitive agreement to divest its Pembina assets for approximately $320 million, aimed at improving its balance sheet[16] Market Engagement and Future Plans - The company plans to participate in the Scotiabank Global Energy Conference in February 2025, indicating ongoing market engagement[30] - The company anticipates drilling activities in the second half of 2025, aiming to enhance production capabilities[53] - The company plans to evaluate opportunities to realize additional value from InPlay Shares obtained from a recent transaction[53] Risks and Uncertainties - The Company emphasizes that forward-looking statements involve numerous assumptions and risks, and actual performance may differ materially from expectations[55] - The Company is exposed to risks related to potential tariffs and trade restrictions between the U.S. and Canada, particularly affecting oil and natural gas imports[55] - The Company faces uncertainties in estimating oil and natural gas reserves and competition for capital and skilled personnel[55] - The Company may not achieve anticipated benefits from potential transactions, and its future capital requirements remain uncertain[56] - The Company’s 2024E net debt post-Transaction may exceed expectations, impacting financial results[56] - The Company is subject to fluctuations in commodity prices, which can adversely affect its operations and financial performance[56] - The Company’s ability to execute business plans may be hindered by economic and political conditions in Canada, the U.S., and globally[56] - The Company’s financial covenants with lenders may be at risk of breach, affecting its credit facilities[56] - The Company’s operations may be impacted by environmental events and extreme weather conditions, leading to production delays[56] Pricing and Costs - Average sales price for Q4 2024 was $213.8 million, up 23.1% from $173.6 million in Q4 2023[48] - Net operating costs for Q4 2024 were $51.2 million, compared to $40.2 million in Q4 2023, representing a 27.5% increase[49] - General and administrative costs decreased by 7% to $1.50 per boe in 2024, benefiting from a higher production base[10] Hedging and Future Contracts - An active hedging program resulted in a realized gain of $21.6 million, primarily from natural gas contracts[27] - Future oil contracts for 2025 include WTI swaps with volumes ranging from 500 to 14,250 bbl/d at prices between $100.46 and $106.37 per bbl[27] Stock Exchange Listing - The Company’s shares are listed on both the Toronto Stock Exchange and NYSE American under the symbol "OBE"[58]

Core Viewpoint - Obsidian Energy has announced its capital program and financial guidance for the first half of 2025, focusing on heavy oil production growth at Peace River while leveraging cash flow from light oil assets for reinvestment [1][2]. Capital Expenditure and Production Guidance - The company plans capital expenditures between $185 million and $195 million for the first half of 2025, including approximately $24 million for exploration/appraisal drilling and $11 million for waterflood projects [3][7]. - First half production is expected to average approximately 33,800 boe/d, representing a three percent decrease from 35,006 boe/d in the first half of 2024, primarily due to the sale of approximately 10,000 boe/d of production [3][6]. Operational Focus and Strategy - The majority of the first half 2025 program will be concentrated on Peace River, with a significant focus on exploration/appraisal drilling to delineate land positions [1][2]. - The company is initiating its first Clearwater waterflood pilot during the first half of 2025, which is expected to enhance future production levels and recovery factors [2][16]. Financial Performance Expectations - The company anticipates funds from operations (FFO) of approximately $180 million for the first half of 2025, with a net debt to FFO ratio of approximately 0.7 times [4][6]. - The guidance is based on lower commodity prices than in 2024, with WTI expected at $71.00/bbl and AECO natural gas at $2.00/GJ [4][7]. Development and Exploration Plans - The capital plan includes 38 net operated wells, with a focus on heavy oil assets in Peace River and the initiation of Clearwater waterflood projects [5][14]. - The company plans to rig release a total of 18 development and exploration/appraisal wells targeting the Clearwater formation in the first quarter of 2025 [17][18]. Transaction Impact - The agreement to sell operated Pembina assets to InPlay Oil Corp. is expected to enhance liquidity and provide future optionality for the company [2][12]. - The transaction is anticipated to close by March 31, 2025, and will impact the company's production and financial metrics accordingly [39].

Core Insights - Obsidian Energy reported a successful year in 2024, achieving a 16% increase in average annual production to 37,474 boe/d compared to 32,275 boe/d in 2023, surpassing previous guidance [9][18] - The company generated $432.0 million in funds flow from operations (FFO), a 14% increase from 2023, with a basic FFO per share of $5.69 [11][18] - Despite lower commodity prices, the company maintained strong production levels and executed a significant capital program, resulting in increased reserves and production growth [9][12] Financial Performance - Cash flow from operating activities for Q4 2024 was $115.0 million, while for the full year it was $361.9 million, compared to $117.7 million and $352.7 million in 2023 respectively [4][11] - The net income for 2024 was a loss of $202.6 million ($2.67 per share), primarily due to a non-cash impairment charge related to the classification of Pembina assets as held for sale [13][18] - Capital expenditures totaled $343.1 million in 2024, up from $292.5 million in 2023, with a focus on expanding production and reserves [12][13] Operational Highlights - Daily production in Q4 2024 averaged 40,119 boe/d, with significant contributions from the Peace River area [9][12] - The company repurchased and canceled approximately 4.5 million shares for $41.7 million in 2024, continuing its share buyback program [10][13] - Net operating costs decreased to $13.85 per boe in 2024 from $14.21 per boe in 2023, benefiting from higher production levels [13][18] Capital Program and Reserves - The capital program in 2024 was heavily focused on Peace River heavy oil assets, leading to increased production and reserves [12][14] - Reserves before-tax net present value (NPV10) increased to $1.6 billion for proved developed producing (PDP) reserves, reflecting a 15% increase on a per share basis [14] - The company replaced 148% of its 2024 production on a PDP basis, indicating effective reserve management and development [14] Future Outlook - The company is in the process of renewing its normal course issuer bid (NCIB) after the current program expires at the end of February 2025 [10] - A definitive asset purchase agreement was entered into with InPlay Oil Corp. to divest Pembina assets for approximately $320 million, which will be used to pay down debt and improve liquidity [20][18] - The company plans to continue focusing on operational execution and cost reduction initiatives while monitoring commodity market volatility [17][18]

Core Viewpoint - Obsidian Energy has announced the sale of its operated Pembina assets to InPlay Oil Corp for approximately $320 million, which will enhance its financial flexibility and reduce debt significantly [1][2][4]. Transaction Overview - The transaction includes $220 million in cash, $85 million in equity, and a 34.6% interest in the Willesden Green Cardium Unit 2, increasing Obsidian's ownership in that field to 99.8% [4][5]. - The cash proceeds will primarily be used to pay down debt, reducing estimated net debt from $412 million to approximately $192 million post-transaction [2][4]. Financial Metrics - The total consideration for the Pembina assets is valued at $305 million, with an additional $15 million for the WGCU2 interest, representing an approximate 2.7x multiple on estimated 2024 net operating income [7][8]. - The average production from the sold assets is approximately 10,300 boe/d, implying a production multiple of about $31,000 per boe/d [7][8]. Strategic Implications - Post-transaction, Obsidian Energy will focus on its Peace River assets, which will account for over 42% of total production and 33% of total proved plus probable reserves [7][8]. - The transaction is expected to streamline operations and enhance the company's ability to generate free cash flow from its remaining light oil assets [6][7]. Future Plans - The company plans to evaluate monetization options for its InPlay share position in the second half of 2025, aiming to recycle capital for further growth [6][7]. - Obsidian Energy will also have two nominees on the InPlay Board of Directors and expects to receive monthly dividend income from its InPlay shares [6][7].