Obsidian Energy(US:OBE) Newsfile·2025-02-25 12:00Core 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]