Obsidian Energy Announces First Half 2025 Capital Program and Guidance

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].