Obsidian Energy(OBE) - 2024 Q4 - Annual Report

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]