OBE production was disappointing for Q3. Weather and geology took their tolls.

The reduction in FCF estimates for 2022 was partly the production, but a big part was bringing the WTI price deck down from 90-120 to 85-95. Even so, the FCF expected now at 95 (113 million) is less than they expected previously at 90 (137). This is due to higher CAPEX and low production. I estimate that about 110 million in 2022 CAPEX is growth CAPEX. This spending increased production from 24.5k boed to 31k (26% growth)

So adjusted FCF will be about 220 million for 2022, which is an equity FCF yield of just over 20%. I am expecting 2023 production to average 35k boed, with exit production approaching 40k. I'm expecting FCF(before growth CAPEX) to approach 250 million if WTI averages 90. I would expect another 100 million in debt repayment in 2023 and another 100 million in growth CAPEX. In terms of returning cash to shareholders, I think its a 2024 timeframe.

OBE's 2P reserve potential is far greater than 144 million boe. They have a 25-year drilling inventory in the Cardium. Given the size of OBE, it is easy for the market to digest their 20% production growth.

I think the selloff is overdone.