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Dienstag, 05.01.2021 13:00 von PR Newswire | Aufrufe: 88

Obsidian Energy Announces First Half 2021 Drilling Program and Guidance

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PR Newswire

CALGARY, AB, Jan. 5, 2021

$40 million capital in development and decommissioning program for first half 2021
Seven well drilling program builds on success of 2020 Willesden Green Cardium locations

CALGARY, AB, Jan. 5, 2021 /PRNewswire/ - OBSIDIAN ENERGY LTD. (TSX: OBE) (OTCQX: OBELF) ("Obsidian Energy" or the "Company") today announced first half 2021 guidance as the Company continues to advance its development in the Cardium area. A total of $35 million in capital expenditures plus $5 million in decommissioning expenditures is currently budgeted for the first half of 2021, furthering the Company's Cardium development activity in Willesden Green with a planned seven well drilling program that builds on the 2020 program where Obsidian Energy experienced strong production results. Assuming continued supportive commodity prices and weather conditions, Obsidian Energy could expand the first half drilling program to eight wells. The Company's successful optimization program will also continue with $4 million allocated in the first half of 2021 (included in the capital expenditure figures above) in order to capture further highly attractive capital efficiencies.

"Our 2020 drilling program resulted in some of the best wells we've seen in the history of our Cardium program," said Stephen Loukas, Obsidian Energy's Interim President and CEO. "Our first half 2021 program will build on these results with most of the wells adjacent to or very near our 2020 wells, which produced excellent production rates at very low operating costs. With shallow production declines and a strong portfolio of development opportunities, our expansion in this area forms the foundation in creating the 'Cardium Champion' along with potential future consolidation."

Obsidian Energy began its first half 2021 program in December, and has successfully rig-released the first two wells on the 4-35 Cardium pad located in Crimson Lake, which is adjacent to the 1-27 and 12-26 pads that were drilled in 2020 and produced some of the highest production rates in the Company's Cardium development history. One drilling rig is being utilized to deliver the seven-well program, offering significant operating and capital efficiencies. While Obsidian Energy expects to drill all seven wells prior to spring break up, current guidance assumes that only five wells are brought on stream in the first half of 2021 with the remaining two wells scheduled to be completed as soon as weather and ground conditions allow, giving the Company a jump-start on its second half capital program.

The first half development program will strengthen the Company's underlying production base and position it to maintain 2021 first half average production at 2020 exit levels, while generating incremental free cash flow for debt repayment. Obsidian Energy's operational flexibility provides management with the ability to quickly modify development plans as commodity prices fluctuate – increasing capital expenditures and adding new production in higher oil price environments or reducing development activities and protecting liquidity in low price scenarios. If WTI oil prices remain near US$50 per barrel, management anticipates utilizing two drilling rigs in its second half 2021 capital program.

Stephen Loukas continued, "Throughout 2021, we will continue to monitor commodity prices and be strategic in our capital allocation to optimize economic returns. With our land base held by production, we can grow light-oil production when it makes financial sense, with the added competitive advantage of being able to draw from a deep inventory of opportunities across our diverse portfolio."

The Company's first half 2021 production and cost guidance is provided below, which assumes five wells are completed and brought on production in the first half of the year.

H1 2021 Guidance

ARIVA.DE Börsen-Geflüster

Kurse

Obsidian Energy Ltd

7,665 $

+0,39%

Production (boe/d)⁽¹⁾

23,000 – 23,400

Capital Expenditures ($millions)

$35

Decommissioning Expenditures ($millions)

Operating Expense ($/boe)

$12.20 – $12.60

General & Administrative ($/boe)

$1.75 - $1.85


(1)	Mid-point of guidance range: 10,225 bbl/d light oil, 2,775 bbl/d heavy oil, 1,950 bbl/d NGLs and 49.5 mmcf/d natural gas

CORPORATE UPDATE

Obsidian Energy closed the year with another strong operational quarter and is on track to meet the Company's previously issued 2020 guidance below.

	2020 Guidance
Production (boe/d) ^{1 2}	25,300 – 25,500
Capital Expenditures ($millions)	56
Decommissioning Expenditures ($millions)	11
Operating Expense ($/boe)	11.00 – 11.20
General & Administrative ($/boe)	1.45 – 1.55


(1)	Adjusted for January 2020 Carrot Creek Disposition of 115 boe/d (85% light oil)
(2)	Mid-point of Updated 2020 Guidance Range: 11,600 bbl/d light oil, 2,850 bbl/d heavy oil, 2,200 bbl/d NGLs and 52.5 mmcf/d natural gas

The Company's Bigoray egress project continues to be on schedule and on budget with permitting and groundwork completed and key equipment on location. During January, pipeline, electrical and control system installations will be completed and approximately 450 boe/d of high netback, oil-weighted net production is expected to be restored by the end of the month. Obsidian Energy continues to pursue third-party processing revenue opportunities.

Obsidian Energy has successfully abandoned 99 net wells in the fourth quarter of 2020 supported through participation in the Alberta Site Rehabilitation Program ("ASRP"), resulting in a reduction of over $3 million to the Company's inactive decommissioning liability. This impact is in addition to 148 net wells abandoned by Obsidian Energy's Area Based Closure ("ABC") spending in the first half of 2020.

ASRP activity will be expanded in 2021 with anticipated deployment of nearly $10 million of ASRP grants. The Company expects to abandon an additional 422 net wells prior to the end of 2022 due to the support from this program. Grants previously awarded on Obsidian Energy licenses in the first two application periods were increased by $0.5 million to better reflect costs for these activities, bringing the total grants and allocations to date to $22 million. The Company expects to receive additional ASRP support grants via the fifth and sixth application periods, which are scheduled to open February 1, 2021.

In addition, Mr. Loukas' employment contract has been extended through the end of January 2021 to allow for the Board to negotiate a longer-term extension.

HEDGING UPDATE

The Company has continued to build on its hedge book with a focus on the first quarter of 2021, and currently has the following financial oil and natural gas hedges and physical oil hedges in place:

Financial

	2021
Oil	January	February	March
WTI C$/bbl	$59.62	$60.34	$61.91
Total bbl/d	5,750	2,500	1,000

	2021
Natural gas	January	February	March
C$/mcf	$2.94	$2.94	$2.94
Total mcf/d	23,700	23,700	23,700

Physical ¹

	2021
Oil	January	February	March	April	May	June
WTI C$/bbl	$55.24	$55.24	$55.24	$59.04	$59.04	$59.04
Total bbl/d	524	581	524	577	558	577


(1)	WTI and differentials on production hedged to lock-in positive net operating income on certain heavy oil properties.

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, www.obsidianenergy.com. Key information includes maps and plans for the first half 2021 capital program.

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