• Funds flow from operations was $94.3 million in the quarter (20 percent increase from the first quarter of 2022)

• Peace River development and exploration program extends Walrus Bluesky play and further delineates acreage for both Bluesky and Clearwater formations

• Settled $9.8 million of equity award plans in cash as opposed to issuing more shares, given the significant discount of our share price to our intrinsic value

Calgary, Alberta--(Newsfile Corp. - May 4, 2023) - OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) ("Obsidian Energy", the "Company", "we", "us" or "our") is pleased to report strong operating and financial results for the first quarter of 2023.

(1) We adhere to generally accepted accounting principles ("GAAP"); however, we also employ certain non-GAAP measures to analyze financial performance, financial position, and cash flow, including funds flow from operations ("FFO"), net debt, netback and net operating costs. Additionally, other financial measures are also used to analyze performance. These non-GAAP and other financial measures do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and therefore may not be comparable to similar measures provided by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income and cash flow from operating activities, as indicators of our performance.
(2) Supplementary financial measure. See "Non-GAAP and Other Financial Measures".
(3) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures".
(4) Non-GAAP financial ratio. See "Non-GAAP and Other Financial Measures".
(5) Please refer to the "Oil and Gas Information Advisory" section below for information regarding the term "boe".
(6) Before realized risk management gains/(losses).

Detailed information can be found in Obsidian Energy's unaudited interim consolidated financial statements and management's discussion and analysis ("MD&A") as at and for the three-month period ended March 31, 2023 on our website at www.obsidianenergy.com, which will also be filed on SEDAR and EDGAR in due course.

The majority of our first half 2023 development program was completed across our Peace River, Willesden Green, Pembina and Viking assets in the first quarter, with the remaining activity to be finished in May. First quarter 2023 production increased to 33,153 boe/d - a 13 percent increase over the 29,407 boe/d in the first quarter of 2022 which contributed to increased FFO and net income from the first quarter of 2022.

2023 First Quarter Financial Highlights

• Strong Funds Flow - FFO increased to $94.3 million ($1.15 per basic share) for the first quarter of 2023 compared to $78.6 million ($0.97 per basic share) for the same period in 2022. Increased production combined with realized hedging gains primarily drove the increase over 2022.

• Capital Development Growth - The Company's first half development program was active with the majority of spending incurring in the first quarter, which resulted in 29 (28.8 net) operated wells drilled (including four oilsands exploration wells). Total first quarter capital expenditures were $107.1 million (2022 - $103.4 million) and decommissioning expenditures were $8.7 million (2022 - $8.5 million).

• Stable G&A Costs - General and administrative ("G&A") costs were $1.60 per boe in the first quarter of 2023 compared to $1.57 per boe in the first quarter of 2022 due to the Company's focus on managing our cost structure.

• Managed Net Operating Costs - Net operating costs were higher at $14.57 per boe in the first quarter of 2023 compared to $13.93 per boe in the first quarter of 2022. The increase in net operating costs is mainly due to higher power costs and usage with an increased production base and general inflationary pressures experienced across the industry.

• Higher Net Income - Higher production and solid netbacks contributed to $30.5 million ($0.37 per basic share) of net income for the first quarter of 2023 compared to $23.8 million in the same period in 2022 ($0.29 per basic share). The increase was partially offset by lower commodity prices and a non-cash deferred income tax expense related to the deferred income tax asset recognized in 2022 in conjunction with our significant tax pool position.

• Continued Liquidity and Debt Focus - The amount available under our syndicated credit facility increased to $200.0 million from $175.0 million, with an extension of the revolving period to May 31, 2024, and the term-out date to May 31, 2025, through the early completion of our semi-annual borrowing base redetermination. With capital expenditures from our first half drilling program heavily weighted to the first quarter of 2023, net debt increased to $351.4 million at March 31, 2023, compared to $316.8 million at December 31, 2022, but decreased from $448.8 million at March 31, 2022.

• Approval of Normal Course Issuer Bid to Facilitate Share Buyback - The Board of Directors authorized a normal course issuer bid ("NCIB") to provide a return of capital to shareholders, which was approved by the Toronto Stock Exchange ("TSX") and allows the Company to buy back up to 10 percent of our "public float", as defined by the TSX, up to February 27, 2024. Purchases under the NCIB will be subject to maintaining $65 million of liquidity and complying with the terms of our current credit facilities. The Company is currently in active discussions with several parties to further enhance our liquidity position to afford more flexibility on a return of capital strategy.

• Settlement of Equity-Linked Award Plans in Cash to Avoid Dilution - As we believe the intrinsic value of our shares far exceeds our current trading price, we elected to pay out performance share units and restricted share units that vested in the first quarter in cash ($9.8 million) rather than our usual practice of issuing shares at the current market price.

2023 First Quarter Operational Highlights

• Achieved Robust Development Well Results - Our active first quarter 2023 capital development continued the momentum from our 2022 program, resulting in drilling results with strong initial production ("IP") rates. With five rigs deployed across the Peace River, Willesden Green, Pembina and Viking areas, 25 (24.8 net) development and exploration/appraisal wells were rig released in the first quarter and 21 (20.6 net) wells are now on production; additionally, we drilled four (4.0 net) oilsands exploration ("OSE") wells in Peace River.

• Established New Walrus Development Area in Peace River - Results of our two (2.0 net) Bluesky 2023 exploration/appraisal wells initially produced an average of over 500 boe per day on a combined basis and further delineated our Peace River acreage while opening a new development area at the Walrus field.

• Peace River Potential - Initial results from the drilling and analysis of the well cores gathered from our four (4.0 net) OSE wells in the first quarter provided encouraging results. Placed strategically across our land base, they help to further delineate our extensive land position in Peace River by providing detailed subsurface data for both Bluesky and Clearwater formations.

• Expanded Western Side of Viking Play - Following up on the success of the 2022 step-out well on the western side of the play, we drilled and completed 11 (11.0 net) wells in our first half 2023 program by the end of April. The initial three (3.0 net) wells were brought on production in the first quarter with the first two (2.0 net) wells showing a strong average 30-day IP rate of 212 boe/d (87 percent light oil).

2023 DEVELOPMENT PROGRAM

We are pleased with the results of both our development and exploration/appraisal programs, providing solid production increases across our Peace River, Willesden Green, Pembina, and Viking areas. We further developed our Viking area following the successful step-out well in 2022, established a new development area at Walrus in Peace River, and further delineated our extensive land position in Peace River for both the Bluesky and Clearwater formations. During the first quarter, 25 (24.8 net) operated producing wells and four (4.0 net) operated OSE wells were rig released. We currently have 21 (20.6 net) wells on production of which 11 (10.7 net) wells were spud in 2022 and tied into permanent facilities in 2023.