Obsidian Energy Ltd - OBELF stock
| Related ticker symbols: TSX: OBE
Description[edit]
Obsidian Energy (OTC: OBELF, TSX: OBE) is an exploration and production company with a singular focus on exploring, developing, and maintaining interests in oil and natural gas properties, along with associated production infrastructure, in the Western Canada Sedimentary Basin. Their portfolio consists of unitized and non-unitized properties encompassing light oil, heavy oil, and natural gas production, featuring reserves with extended lifespans and low decline rates, including interests in significant oil and gas fields. Most of their proved plus probable reserves are situated in Alberta, Canada, with a primary emphasis on capital investments in light-oil development.[1]
Origin[edit]
The origin of Obsidian Energy can be traced back to its founding in 1979 as Penn West Exploration Ltd. The company started as an oil and gas exploration and production company, primarily focused on developing and producing hydrocarbon resources in Western Canada. Over the years, Penn West Exploration Ltd. grew through acquisitions and exploration efforts, expanding its portfolio of oil and gas assets. It became one of the largest conventional oil and natural gas producers in Canada. In the early 2000s, Penn West Exploration Ltd. went through several changes and reorganizations. It expanded its operations and reserves through acquisitions of various companies, and its production reached significant levels. However, in 2014, the company faced financial difficulties due to declining oil prices and a high debt load resulting from aggressive expansion efforts. This led to changes in the management team and a series of divestitures and asset sales to reduce debt and streamline operations. In 2017, as part of its restructuring efforts, Penn West Exploration Ltd. underwent a rebranding initiative and changed its name to Obsidian Energy Ltd. The name "Obsidian" was chosen to represent strength, stability, and resilience, reflecting the company's commitment to a more disciplined and focused approach to operations. With the new name, Obsidian Energy continued to focus on producing oil and gas from its Western Canadian sedimentary basin assets. The company aimed to maintain a sustainable level of production while prioritizing financial discipline and operational efficiency.[2]
Operations[edit]
Viking[edit]
The Viking presents itself as a development play for sweet, light oil, complemented by associated natural gas, situated in central Alberta. This asset offers the potential for highly profitable returns at current commodity prices and allows the Company to continue drilling even during the typical spring break-up period due to favorable ground conditions in the region. Key features of this play encompass a significant drilling inventory, including low-risk infill and step-out development opportunities, resulting in superior netbacks due to lower well costs, coupled with owned and controlled infrastructure and direct market access. It is a shallow, low geological risk resource play, strategically located near several successful offset producers.[3]
In 2022, the company initiated development drilling in the Viking area, successfully licensing and drilling eight wells with a 100% working interest as part of a revitalization program for this asset. These eight wells surpassed expectations, reaching peak production rates exceeding 1,100 barrels of oil equivalent per day (67% of which is light oil). Moreover, we achieved a significant oil discovery with the first step-out well on Pd 4+22, yielding exceptional results and providing valuable delineation for our western acreage.[3]
By May 29, 2023, all 11 Viking wells (11.0 net) drilled in the first half of the company's 2023 development program are operational and producing. Currently, these wells are in the cleanup phase, and collectively, they are producing at a rate of 1,832 barrels of oil equivalent per day (85 percent of which is oil). Furthermore, as part of our 2023 capital program, Obsidian Energy has commissioned the new 13-16 battery in the Viking area to facilitate ongoing growth in the expanded and delineated western region of the play.[4]
Cardium[edit]
Obsidian Energy's primary focus lies in creating consistent, low-decline, and high-netback light-oil wells on their unparalleled Cardium land base located in the Willesden Green and Pembina regions. Their Cardium asset has been fully delineated and de-risked, providing extensive development opportunities for the future. This asset represents one of North America's most significant light oil fields, which has continued to produce for over 70 years, and advancements in horizontal and halo drilling since the late 2000s have revitalized the field.[5]
Peace River[edit]
Peace River possesses a high-quality and stable cold-flow heavy oil Bluesky resource, with the potential for Clearwater upside, strategically situated in the heart of the Peace River Oilsands region. Our company holds complete ownership of a substantial, contiguous land area of approximately 500 sections at Peace River, presenting significant opportunities for future development, especially with favorable commodity prices and recent well outcomes.[6]
Noteworthy features of this play include a large, contiguous land base with rights to Bluesky and Clearwater heavy oil, an established Bluesky development, and a growing Clearwater heavy oil play. The cold-flow heavy oil resource is tapped through multi-leg horizontal wells, and we benefit from extensive owned infrastructure and multiple sales points, further supported by surface synergy between Bluesky and Clearwater, which reduces well and operating costs. Additionally, the competitive royalty structure with low royalty rates makes this a highly economic venture and a promising source of future growth.[6]
After a temporary halt in development due to unfavorable commodity prices, we resumed Bluesky formation development at Peace River in 2021, successfully drilling four wells that demonstrated robust initial-production rates, which have remained strong over time.[6]
- ↑ Dividend Investor. OBELF Stock Quote. Retrieved on 7/21/2023.
- ↑ Wikipedia. Obsidian Energy. Retrieved on 7/21/2023.
- ↑ 3.0 3.1 Obsidian Energy. Operations - Viking. Retrieved on 7/21/2023.
- ↑ Yahoo Finance. Obsidian Energy Announces Increase to Syndicated Credit Facility, Results of Viking Drilling and Update on Alberta Wildfires. May 31, 2023.
- ↑ Obsidium Energy. Operations - Cardium. Retrieved on 7/21/2023.
- ↑ 6.0 6.1 6.2 Obsidian Energy. Operations - Peace River. Retrieved on 7/21/2023.
