Obsidian Energy Provides Operational and Hedging Update

Source Press Release
Company Obsidian Energy Ltd. 
Tags Capital Spending, Guidance, Strategy - Corporate, Financial & Operating Data
Date January 16, 2020

 OBSIDIAN ENERGY LTD. (TSX – OBE, NYSE – OBE.BC) ("Obsidian Energy", the "Company", "we", "us" or "our") is pleased to provide an update on our Cardium development program which continues to demonstrate encouraging results as we initiate our 2020 drilling campaign. Additionally, the Company provides the details of recently added hedges to our 2020 program.    

Cardium Development Program Update

All 13 wells from the second half of 2019 were successfully brought online prior to the end of December. Results from the program continue to meet the strong production expectations for the area, with IP10 rates for the program averaging 520 boe/d (90% oil) per well (all 13 wells are included in the average), and IP30 rates for wells averaging 485 boe/d (83% oil) per well (11 of the 13 wells are included in the average). We are very encouraged with our capital cost performance, with the wells averaging C$3.5 million per well, down from C$4 million estimated for a comparable well design at our 2018 Investor Day.

Activity is well underway to deliver the nine well program planned for the first half of 2020. Two drilling rigs are active for the Company. Three wells have been rig-released, with the drilling of the fourth and fifth wells underway.

We continue to prepare for our second half 2020 program in the Willesden Green region, which is expected to begin after breakup conditions end.

Hedging Update

The volatility of oil prices over the past several weeks has allowed Obsidian Energy to strengthen its 2020 hedging program, providing additional certainty to our cash flow at levels that are constructive to our business.

Currently, the Company has the following 2020 oil and natural gas hedges in place:

  January  February  March  April  May  June 
WTI C$/bbl  $76.61  $78.98  $78.58  $78.11  $77.92  $77.41 
Total bbl/day  8,250  7,750  7,000  4,000  3,000  2,000 
  January  February         
C$/GJ  $2.40  $2.33         
Total GJ/day  23,000  18,000         

Updated Corporate Presentation

For further information on these and other matters, Obsidian Energy has posted an updated Corporate Presentation which can be found on its website, . 

Additional Reader Advisories

Oil and Gas Information Advisory 

Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd