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Energy Stock News: Obsidian Energy (TSX: OBE) Announces 2022 Operations Update, 2023 Guidance Update, and Inaugural ESG Report

Calgary, Alberta – December 16, 2022 (Newsfile Corp.) ( Newswire) OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy”, the “Company”, “we”, “us” or “our”) is pleased to provide an update on our 2022 second half development program, our 2023 guidance, and the release of our inaugural environment, social and governance report for 2021.


We are committed to delivering a budget that balances production growth and free cash flow generation for 2023. Given the considerable optionality of our asset base coupled with results from drilling programs that are still in progress from our active 2022 capital program, and the recent volatility in both oil prices and heavy oil differentials, we are deferring the release of our 2023 capital budget and associated guidance until January 2023 to allow more time to refine and optimize our operating plans.

While evaluating various development opportunities for our 2023 program and considering different pricing scenarios, the Obsidian Energy team is moving ahead with plans and preparation for first quarter 2023 development. We expect that the 2023 program will include drilling in all core areas including first quarter 2023 drilling in our Viking area following the successful step-out well in 2022, and a significant Clearwater exploration and Bluesky program in Peace River. Once the 2023 capital budget has been approved, detailed guidance along with our intentions regarding continued debt repayment and shareholder return of capital will also be provided.


Since the end of the third quarter, an additional 14.0 wells (13.4 net) were rig-released, including four Cardium wells (4.0 net) in Willesden Green, three Cardium wells (2.9 net) and one vertical Devonian well (0.5 net) in Pembina, and five Bluesky wells (5.0 net) and one Clearwater well (1.0 net) in Peace River. We expect to finish drilling the remainder of our 35 well (33.9 net) second half 2022 program with the final two wells (1.9 net) rig released in early January 2023. In total, we expect 61 wells (59.7 net) from the 2022 development program will be rig-released in 2022, of which 49 wells (47.9 net) are planned to be on production by the end of the year. In addition, two wells (1.8 net) were rig released and nine wells (8.6 net) were on production from our 2021 development program during 2022.

Willesden Green

Our Willesden Green development continues to provide strong returns to the Company. The Crimson 3-03 Pad exhibited top tier results with one of the wells leading the top Cardium well list in Alberta for October1 when the well produced 15,800 bbls at an average rate of 510 bbl/d of oil. In total, the two wells on the pad reached peak initial production (“IP”) rates of 1,187 boe/d (47 percent oil).

Since the third quarter, Obsidian Energy rig released four wells (4.0 net) targeting the Cardium formation. Currently, the North Crimson 9-04 Pad well is on production with an IP-30 average rate of 341 boe/d (39 percent oil). This well targeted the north end of the Willesden Green field, expanding our core Cardium Willesden Green drilling inventory and adding incremental reserves to the field. The Mannville 2-18 Pad gas well drilled late in the third quarter produced at peak 30-day rates of 1,028 boe/d (14 percent liquids). Three additional Cardium wells drilled in the third quarter have been completed and are waiting to come on production in late December and early January.


The 16-09 Pad has cleaned up with peak 30-day production pad rates of approximately 516 boe/d (60 percent oil) for the two newest wells. One Devonian vertical well is under-going tie-in and is expected to be on production in December following successful stimulation. Currently, three wells (2.9 net) from the South Pembina 14-6 Pad are completed and awaiting facility tie-in in December.

In addition, the first non-operated development well at PCU#11 (1-25-49-11W5, 44.8 percent working interest) came on production in October. The well was recognized as the top Alberta Cardium producer in October at 610 bbl/d oil2.

Peace River

Our Bluesky development continues to deliver strong program results highlighting the strength of our position in the Peace River oil play. From a recent notable well report3, Obsidian Energy drilled the top three cumulative production heavy oil wells over the last 12 months within our Bluesky development, with five of our wells being in the top ten for the province.

In the fourth quarter to date, we rig-released five Bluesky wells (5.0 net) from our second half 2022 program, with two wells (2.0 net) currently producing to rate constrained temporary facilities during their clean up process in our Seal property. In total, five Bluesky wells (5.0 net) continue to produce through these temporary production facilities, which are expected to be tied-in to permanent facilities through December and early January.

In November, we rig released the first of our two second half wells (2.0 net) targeting the Clearwater play. Drilled in the Seal area, this well is currently in the process of cleaning up; early results are encouraging with current production of 110 bbl/d using a rate-limited pump. As per our laboratory test, oil quality is 11.7o API with viscosity superior to our Bluesky production. The second well, located in our Dawson field immediately adjacent to the Peavine Clearwater play, spud on December 15 with testing planned in early 2023. These wells will further delineate our land base and provide key information about our Clearwater assets, which will be used to determine the focus and scope of our 2023 Clearwater exploration and development program. We anticipate having an active first half 2023 Clearwater program comprised of vertical oil sands evaluation wells and exploratory drilling locations.

We also purchased a further two-and-a-half sections (approximately 1,600 acres) of land with prospective Bluesky and Clearwater rights in the Peace River area in the fourth quarter. This brings our total land ownership to 500 sections of heavy oil rights in Peace River.


The eight wells (8.0 net) from our Viking program continue to perform extremely well and within expectations. Closely following the successful step-out well that displayed prolific peak rates of 242 boe/d (88 percent oil) and an IP 90-day rate of 201 boe/d (86 percent oil), respectively, we plan to accelerate our western Viking development in the first quarter of 2023.


We are pleased to announce the release of our inaugural environmental, social and governance report for year-end 2021 (the “ESG Report”), which presents a comprehensive view of the Company’s commitment to sustainability across the organization and the communities we work in. We are proud of our commitment to strong ESG practices that include minimizing our environmental impact, creating a culture where individuals and our communities are valued, and implementing best-in-class governance practices to ensure we are acting in the interests of our stakeholders.

“We believe in supporting our communities, contributing to the economy, providing a safe workplace, minimizing our environmental impact and acting in the interests of our stakeholders,” said Stephen Loukas, Interim President and CEO. “Strong stewardship is an integral part of our organization and shapes how we run the business. We are excited to share the results of our journey and look forward to advancing our sustainability practices as part of our long-term strategy.”

Key highlights from our ESG Report includes:

Obsidian’s ESG approach to sustainability along with key initiatives, metrics, and accomplishments
30 percent reduction in decommissioning liabilities since 2018
40 percent decrease in total greenhouse gas emissions since 2018
40 percent and 35 percent reduction in our fresh water usage and intensity since 2019
Implemented over 10,500 worker safety initiatives since 2017
Maintained lost time injury frequency below industry average at 0.18 cases per 200,000 work hours in 2021
Provided over $1.8 billion in economic contribution to local communities, suppliers, and other stakeholders since 2017
The Board’s and executives’ equity-based compensation links pay with total shareholder return – measured through a series of corporate goals and performance targets, including specific ESG metrics
A key and growing focus of the Board and management involves the responsibility for oversight and approval of ESG strategies and goals to ensure our actions minimize impact to the environment and stakeholders, and that a strong ESG culture is integrated throughout the Company

For more information, please visit our website or download the ESG Report.

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