Obsidian Energy Announces Second Half 2025 Capital Program and Guidance

Core Viewpoint - Obsidian Energy has announced its capital program and financial guidance for the second half of 2025, focusing on production growth and strategic investments following the recent asset disposition and market conditions [1][2]. Capital Expenditures and Production Guidance - The company plans to allocate between $110 million and $120 million for capital expenditures, along with an additional $13 million to $15 million for decommissioning expenditures in the second half of 2025 [3][4]. - Average production is expected to remain roughly flat at approximately 27,700 barrels of oil equivalent per day (boe/d) in the second half of 2025, with a target exit rate of around 29,000 boe/d by year-end [6][8]. Operational Focus - The capital expenditures will be divided with approximately $62 million dedicated to Peace River and $52 million to Willesden Green, with a total of 28 net operated wells planned for drilling [4][14]. - Key development areas include Harmon Valley South and Dawson in Peace River, with a focus on the Clearwater and Bluesky formations [16][17]. Financial Metrics - The company anticipates funds flow from operations (FFO) of approximately $113 million, with a net debt to FFO ratio of about 1.3 times [8][9]. - Net operating costs are projected to be between $13.45 and $14.35 per boe, while general and administrative costs are expected to be between $2.00 and $2.10 per boe [9][10]. Shareholder Engagement - Obsidian Energy intends to launch a share exchange offer to acquire up to $10 million of its common shares in exchange for shares of InPlay Oil Corp, which the company holds a significant stake in [21][22]. - This exchange offer is part of a strategy to enhance liquidity and shareholder value while managing capital expenditures [2][21]. Market Conditions and Pricing Assumptions - The guidance assumes commodity prices of $65.00 per barrel for WTI, $3.50 per barrel for MSW differential, $11.50 per barrel for WCS differential, and $2.50 per GJ for AECO natural gas [8][9]. - The company has implemented hedging strategies to mitigate the impact of commodity price volatility [19].