Obsidian Energy Announces $30.0 Million Term Loan Repayment and acquisition | OBE Message Board Posts


Obsidian Energy Ltd.

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Msg  21731 of 21742  at  9/13/2022 8:25:21 AM  by

shiftsuper175607


Obsidian Energy Announces $30.0 Million Term Loan Repayment and acquisition

 Operations Update and Facility Acquisition

Seal 9-15 gas plant acquired in Peace River area
Second half capital program well underway in Cardium and Peace River

Calgary, Alberta–(Newsfile Corp. – September 13, 2022) – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) announces the full repayment of the $30.0 million non-revolving term loan (the “Term Loan“) from free cash flow from our operations. The Term Loan was part of our new syndicated credit facilities with initial borrowing capacity of $205.0 million that was entered into with our debt refinancing completed in July 2022. With the repayment of the Term Loan, our remaining debt consists of a $175.0 million revolving syndicated credit facility with a term-out period of July 27, 2024, and $127.6 million of senior unsecured notes due July 27, 2027.

OBE Announces Term Loan Repayment, Operations Update and Facility Acquisition

“We are in a substantially stronger financial position from where the Company was a year ago,” said Stephen Loukas, Obsidian Energy’s Interim President and CEO. “With the recent refinancing and our repayment of the Term Loan, we are on track to reach our 2022 guidance range of net debt to funds flow from operations of less than 0.6x.”

OPERATIONS UPDATE

Our second half 2022 development program is well underway in our core areas with several of the newly drilled wells rig-released and expected to be on production by mid-October. Approximately nine (9.0 net) wells have been rig-released thus far in the third quarter: four (4.0 net) Cardium wells in Pembina and Willesden Green, four (4.0 net) Bluesky wells in Peace River, and one (1.0 net) Mannville gas well in Willesden Green. In addition, all eight (8.0 net) Viking wells are on production with initial results in line with forecast as they clean up. A significant aspect of the Viking program is the step-out well drilled to test the western extent of the play, which displayed a peak 10-day initial production rate of 218 boe/d (86 percent oil) and opens up additional development and reserves in the area.

ACQUISITION OF SEAL 9-15 GAS PLANT IN PEACE RIVER

Obsidian Energy also announces that we purchased the Seal 9-15 gas plant within our core Peace River asset. The acquisition keeps with our established approach of owning the majority of required processing capacity in our operating areas. With this addition, Obsidian Energy owns a dominant infrastructure position in the Peace River area that includes 70 percent of the total area gas processing capacity, of which the Seal gas plant contributes approximately 10 mmcf/d. Obsidian Energy currently delivers less than 1 mmcf/d of gas to the facility, leaving ample room for our near term and future development.

The acquisition also supports the Company’s commitment to protect the environment through our ongoing work to reduce flaring. In the context of the Alberta Energy Regulator’s Directive 84 and 60 gas conservation regulations for Peace River, ownership of the gas plant provides us with takeaway capacity in an area that is anticipated to see increased future Clearwater and Bluesky development.

Stephen Loukas continued, “The Seal 9-15 gas plant is a key piece of infrastructure in the Peace River area. Given our intention to begin drilling our significant Clearwater holdings and expanding our Bluesky development, we took the opportunity to expand our facility ownership in this important area that is key to our future growth plans.”

HEDGING UPDATE

The Company has continued to hedge WTI in order to protect cash flow as we execute on our capital program and repay debt. We expect to expand our commodity hedge position over the coming months as we solidify our 2023 plans. Currently, we have the following financial oil and gas contracts in place on a weighted average basis:

WTI Oil Contracts

TypeRemaining TermVolume
(bbls/d)
Bought Put Price
(C$/bbl)
Sold Call Price
(C$/bbl)
Swap Price
(C$/bbl)
SwapAugust 20225,000 $125.07
CollarAugust 20225,000$118.00$135.39
SwapSeptember 20227,500 $120.75
CollarSeptember 20222,350$114.01$125.39
CollarOctober 202210,000$109.75$130.07
CollarNovember 20225,000$105.75$129.88

AECO Natural Gas Contracts

TypeRemaining TermVolume
(mcf/d)
Swap Price
(C$/mcf)
SwapAugust – October 202226,065$4.74

PETERS & CO. ENERGY CONFERENCE PRESENTATION

Obsidian Energy is pleased to be participating at the Peters & Co. 26th Annual Energy Conference from September 13 to 15, 2022 in Toronto, Ontario (the “Conference“). Stephen Loukas, Interim President and CEO will discuss the Company at 4:00 p.m. ET (2:00 p.m. MT) on Wednesday, September 14, 2022. The presentation will be webcast with the link and associated information available on our 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. Boe/d means barrels of oil equivalent per day.

TEST RESULTS AND INITIAL PRODUCTION RATES

Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long-term performance or of ultimate recovery. Readers are cautioned that short term rates should not be relied upon as indicators of future performance of these wells and therefore should not be relied upon for investment or other purposes. A pressure transient analysis or well-test interpretation has not been carried out and thus certain of the test results provided herein should be considered preliminary until such analysis or interpretation has been completed.

ABBREVIATIONS

Oil

Natural Gas

bbl/d

Barrels per day

mcf

thousand cubic feet

boe/d

barrels of oil equivalent per day

mcf/d

thousand cubic feet per day

WCS

Western Canadian Select

mmcf/d

million cubic feet per day

WTI

West Texas Intermediate

AECO

Alberta benchmark price for natural ga



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