Obsidian Energy Announces Sale of Operated Pembina Assets for $320 Million in Cash, Equity and Assets

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].