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Obsidian Energy Ltd (2)
Symbol OBE
Shares Issued 76,247,878
Close 2024-06-26 C$ 10.24
Market Cap C$ 780,778,271
Recent Sedar Documents

Obsidian Energy completes Peace River acquisition

2024-06-26 17:18 ET - News Release

Mr. Stephen Loukas reports reports

OBSIDIAN ENERGY ANNOUNCES CLOSING OF PEACE RIVER ACQUISITION

Obsidian Energy Ltd. has closed its previously announced acquisition of approximately 1,700 barrels of oil equivalent per day (boe/d) (100 per cent oil, based on April, 2024, actual production) of Clearwater production and 148 net sections of land in the Peace River area from a third party.

Total consideration paid for the acquisition was approximately $80.5-million (inclusive of liquids inventory and closing adjustments), with an effective date of May 1, 2024. The cash consideration for the acquisition was financed from the company's syndicated bank facility and a $50-million term loan, which matures in June, 2025.

"We're pleased to have successfully completed this strategic acquisition that provides further upside and optionality within our Peace River operating area," said Stephen Loukas, Obsidian Energy's president and chief executive officer. "With our expanded holdings in the region, we have identified approximately 200 total locations on these lands, of which 103 (including 49 proved plus probable locations) are on trend with our successful Clearwater Dawson development on the Peavine acreage. The acquisition provides us further optionality both within our 2024-2026 three-year corporate growth plan, as well as beyond."

Advisers

Royal Bank of Canada, Bank of Montreal and Canadian Western Bank provided the term loan financing related to the acquisition.

RBC Capital Markets acted as exclusive financial adviser and Burnet, Duckworth & Palmer LLP acted as legal adviser to Obsidian Energy with respect to the acquisition.

Additional reader advisories

Drilling locations

This news release discloses proved and probable drilling inventory obtained from the vendor's reserves report in addition to internal analysis and account for drilling locations that have associated proved and probable reserves. The drilling locations considered for future development will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, and additional reservoir information that is obtained and other factors.

Oil and gas information advisory

Barrels of oil equivalent and barrels of oil equivalent per day may be misleading, particularly if used in isolation. A boe conversion ratio of 6,000 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 with 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.

Obsidian Energy shares are listed on both the Toronto Stock Exchange in Canada and the NYSE American in the United States under the symbol OBE.

We seek Safe Harbor.

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