Obsidian Energy Announces 2024 Operations Update and Commencement of 2025 Drilling Program

• Estimated 2024 average production of approximately 37,450 boe/d exceeded the top end of our guidance range
• Completion of 2024 capital program provided furthers delineation of Peace River acreage
• Successful results from first wells drilled in new Peavine and Gift Lake areas in Peace River
  with the Peavine 8-13 Pad achieving an average 30-day initial production (“IP”) rate of
  302 boe/d (100 percent oil) per well
• Pembina results exceeded expectations with current production of over 1,100 boe/d from the two-well 12-19 Pad

Calgary, Alberta–(. – January 14, 2025) – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to provide an operational update on our second half 2024 development program with all wells rig released as scheduled. We expect our full year 2024 average production to be approximately 37,450 boe/d based on preliminary estimates (surpassing the top end of our 37,000 boe/d to 37,400 boe/d guidance range), representing an approximate 16 percent increase over 2023. For the fourth quarter of 2024, average production was approximately 40,000 boe/d (based on preliminary estimates).

OBE Announces 2024 Operations Update and Commencement of 2025 Drilling Program

“The first year of our three-year growth program provided strong results that, in aggregate, exceeded our initial expectations and set the foundation for accelerating our development activity in 2025,” said Stephen Loukas, Obsidian Energy’s President and CEO. “We are pleased with the results achieved during 2024. With a balanced focus of appraising and delineating our extensive heavy oil asset while continuing to provide stable production and returns from our light oil business, we were able to drive strong production and cash flow growth – which was further enhanced on a per share basis by our share buyback program. As we enter 2025, we are well-positioned to achieve 50,000 boe/d of production during 2026.”

The Company mobilized two additional drilling rigs late in 2024 to allow us to make a head start to our 2025 activities, and presently have six drilling rigs in operation. Given the recent fluctuation in oil and gas prices, foreign exchange prices, potential for trade tariffs, and the valuation of energy equities, we continue to assess the market conditions in aggregate and expect to announce our first half 2025 capital program and guidance on February 5, 2025.

2024 WELLS RIG RELEASED AND ON PRODUCTION

Obsidian Energy completed our fourth quarter 2024 drilling program with four rigs in operation – three drilling rigs in our Peace River area and one in our Willesden Green area. In 2024, a total of 66 (65.4 net) operated wells were rig released (including five oilsands exploration (“OSE“) wells) and 65 (64.3 net) operated wells were brought on production by the end of the year (including seven (7.0 net) wells from our 2023 program). The three (3.0 net) wells yet to be placed on production at year-end were brought onstream in the last few days. Obsidian Energy also participated in the rig release of 18 non-operated (6.3 net) wells in 2024, two (0.9 net) of which were water injection wells. The breakdown of operated wells that were rig released during 2024 is as follows:

		H1 Gross (Net) Wells			H2 Gross (Net) Wells			Total Gross (Net) Wells
Heavy Oil Assets
Peace River (Bluesky)		8 (8.0	)		16 (16.0	)		24 (24.0	)
Peace River (Clearwater)		7 (7.0	)		6 (6.0	)		13 (13.0	)
Light Oil Assets
Willesden Green (Cardium/Belly River)		8 (7.7	)		1 (1.0	)		9 (8.7	)
Pembina (Cardium)		4 (3.7	)		6 (6.0	)		10 (9.7	)
Viking		–			–			–
		27 (26.4	)		29 (29.0	)		56 (55.4	)
EXPLORATION/APPRAISAL WELLS
Peace River (Clearwater)		2 (2.0	)		3 (3.0	)		5 (5.0	)
Peace River (OSE)		5 (5.0	)		–			5 (5.0	)
		7 (7.0	)		3 (3.0	)		10 (10.0	)
TOTAL OPERATED WELLS		34 (33.4	)		32 (32.0	)		66 (65.4	)
(1) Wells on production in 2024 include seven (7.0 net) wells rig released in 2023 that came on production in the first quarter of 2024. In total, 65 (64.3 net) wells were on production by the end of 2024. In addition, Obsidian Energy participated in a total of 18 non-operated (6.3 net) wells in 2024, two (0.9 net) of which were water injection wells.

Six (6.0 net) new wells were brought on production over the last two weeks of December 2024 and are in the process of clean up and/or optimization (four wells in the Bluesky formation and one in the Clearwater formation at Peace River, and one well targeting the Belly River formation at Willesden Green). In January, three (3.0 net) Bluesky wells from the 2024 program were placed on production and three existing, winter access Clearwater wells at Nampa and Gift Lake in Peace River were restarted. Our 2025 first half development program started in January with five rigs active in Peace River drilling in the Clearwater and Bluesky formations, and one rig in our Pembina (Cardium) asset.

HEAVY OIL ASSETS

Our Peace River program continued throughout the fourth quarter of 2024 with three rigs in operation and two more added at the start of this year. In 2024, we focused on execution of our strategic growth plan and appraising the potential of new development areas in both our Clearwater and Bluesky plays. We are pleased with our results to date, which include establishing several new development areas. Highlights of our fourth quarter 2024 program are outlined below by targeted formation and field.

Clearwater Formation

We completed our 2024 development and exploration/appraisal programs with all wells rig released and on production. Robust production rates at Dawson and the establishment of a new Clearwater development area at West Dawson produced numerous follow-up locations that we plan to start developing in 2025 along with exploration/appraisal activities at Nampa, Peavine and Gift Lake. The Company’s Clearwater production has grown substantially over the past two years through organic development and acquisitions from 99 boe/d in January 2023 to average over 4,500 boe/d in December 2024 (based on preliminary estimates).

• Dawson – Our Dawson Clearwater development field program continued to produce at higher rates than initially forecasted over the fourth quarter of 2024, allowing a faster pace of development than anticipated. The Company intends to continue developing this area in 2025 and has constructed additional pads for future drilling.
• West Dawson – The two (2.0 net) exploration/appraisal wells at the Dawson 9-21 Pad in our recently discovered field exceeded production expectations with a gross average 30-day IP rate of 269 boe/d (100 percent oil) per well of a higher-quality oil (API gravity of approximately 16^O). With over 25 follow-up locations (unbooked, internally generated) identified in proximity to the 9-21 Pad, we plan to further develop this new Clearwater field as we evaluate the potential western extension of the Clearwater formation trend at Dawson.
• Peavine and Gift Lake – We are pleased with the initial results of the four wells drilled during the fourth quarter of 2024 to appraise these recently acquired properties in Peace River.
  • Peavine: The three well (3.0 net) Peavine 8-13 Pad located within the Peavine Metis Settlement area was rig released in 2024 and produced at a gross average IP 30-day rate of 302 boe/d (100 percent oil) per well. These wells extend our Dawson trend eastward into the Peavine settlement and will be followed up with additional drilling in 2025.
  • Gift Lake: We rig released our first Gift Lake well at the 13-33 Pad within the Gift Lake Metis Settlement area in December, successfully testing a second, lower Clearwater zone that establishes the lower Clearwater sand’s potential to add future well inventory and expand this play. In addition, Obsidian Energy brought the existing two (2.0 net) acquired wells at the 13-33 Pad back on production (producing from the upper zone). We are currently drilling the second exploration/appraisal well at the 4-15 Pad in the Gift Lake area to test the eastern extent of the field, which is expected on production in late January.
• Nampa – In the fourth quarter of 2024, the Company resumed production at our Nampa 6-28 Pad, a winter access only exploration/appraisal well drilled in early 2024, with encouraging initial early oil rates. In late December 2024, we commenced drilling an offset well to this pad to further delineate our Nampa acreage.

Bluesky Formation

We rig released all remaining wells in our 2024 Bluesky formation program by the end of the year and have since brought online the three (3.0 net) remaining wells rig released in December.

• Harmon Valley South (“HVS“) – In 2024, Obsidian Energy successfully tested new drilling and facility designs in our Bluesky HVS field, which provided production results at some pads at the top end of our expectations. In January, we began our 2025 development program in the area.
  • HVS 8-28 Pad: The two (2.0 net) wells drilled in our second half 2024 program on this four-well pad were placed on production by year-end. These wells followed-up two wells drilled in the first half of 2024, and produced at a gross average IP 30-day rate of 105 boe/d (78 percent oil) per well and an average IP 60-day rate of 129 boe/d (84 percent oil).
• Walrus: Obsidian Energy has now drilled pads across our Walrus development field to determine the extent of the field and better understand reservoir complexity. New wells have provided mixed results with shallower declines, but higher water volumes and slightly lower IP rates than originally expected. The information gained through our 2024 program is being used to refine our 2025 development program for this field.
  • Walrus 15-01 Pad: Our first pad in the central portion of the field had the first two wells of four brought on production in late December with the remaining two wells brought on last week. Drilling encountered high quality reservoir on all four wells with two wells testing the “waffle” leg design, continuing our evaluation of this promising technique. Throughout January 2025, the wells are expected to undergo continued evaluation and optimization.
• Cadotte – Offsetting existing strong producing pads, both pads drilled in the second half 2024 program at Cadotte were rig released and placed on production in December. Individual well clean up can be prolonged in the Cadotte area as oil viscosity and water saturation are typically higher than seen elsewhere in our Peace River asset, requiring additional water management prior to realizing stabilized oil rates. The results from these development wells will be used to further delineate and unlock future potential in the Cadotte area.
  • Cadotte 13-15 Pad: All three (3.0 net) wells were placed onstream late in the fourth quarter of 2024 and displayed longer than typical clean up periods. To manage facility constraints, Obsidian Energy staggered the start of this pad throughout the end of the year with two of the wells currently in the process of cleaning up. The first well on production reached a gross average IP 30-day rate of 172 boe/d (100 percent oil) before requiring a pump replacement in early January. The second well had a gross average IP 30-day rate of 30 boe/d (100 percent oil) and hit a peak rate of 251 boe/d (99 percent oil) in early January, and is presently producing in excess of 150 boe/d after approximately two months of production.
  • Cadotte 9-36 Pad: All three (3.0 net) wells were rig released by the end of December with one of the three wells currently on production. The remaining wells will be placed on production as the initial high gas rates on the pad begin to decline.

LIGHT OIL ASSETS

We completed our second half 2024 light oil capital program with one drilling rig at Willesden Green, which then moved to Pembina to spud the first well in our 2025 capital program, offsetting successful pads from our 2024 program. An update to the remainder of our fourth quarter and initial 2025 activities to date is as follows:

• Pembina (Cardium): We completed our second half 2024 Pembina program with all planned wells rig released and on production by year end. The two (2.0 net) wells at the 12-19 Pad were placed on production and produced at a gross average IP 30-day rate of 343 boe/d (90 percent oil) per well. Production rates have continued to rise with current production of over 1,100 boe/d for the two well pad.

• Willesden Green (Belly River): Our initial delineation well targeting the Belly River formation at the 15-06 Pad was rig released in late December. Initial production from the well was encouraging, however sand production problems have necessitated a coil tubing intervention. We expect that the well will be returned to production during the second half of January.

SENIOR MANAGEMENT APPOINTMENT

Obsidian Energy is pleased to announce the appointment of Jay McGilvary as our new Vice President, Development. Jay has played a key role in the transition of Obsidian Energy, holding key technical leadership roles of increasing responsibility across the full Obsidian Energy portfolio. In this role, Jay will continue to lead the teams responsible for all aspects of our subsurface characterization and exploitation in addition to our drilling and completions operations.

HEDGING UPDATE

The following contracts were in place in December or are currently in place on a weighted average basis:

Oil Contracts

Type	Remaining Term	Volume (bbl/d)	Swap Price (C$/bbl)
WTI Swaps	January 2025	14,250	$100.46
WTI Swaps	February 2025	12,400	$103.23
WTI Swaps	March 2025	7,250	$106.23
WCS Differential	January – December 2025	6,000	($19.30)

AECO Natural Gas Contracts

Type	Remaining Term	Volume (mcf/d)	Swap Price (C$/mcf)
AECO Swap	December 2024	14,929	$3.74
AECO Swap	January – March 2025	14,929	$3.74
AECO Swap	April – October 2025	11,374	$2.24
AECO Collars	December 2024	4,976	$3.43 – $4.11
AECO Collars	January – March 2025	4,976	$3.43 – $4.11
AECO Collars	April – October 2025	1,896	$2.11 – $2.64

Electricity Contracts

Type	Remaining Term	Volume (MWh/d)	Swap Price (C$/MWh)
Power Swaps	December 2024	144 MWh/d	$92.83

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.

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.

DRILLING LOCATIONS

This news release discloses drilling locations or inventory. Unbooked drilling locations are internal estimates based on our prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources.

Unbooked locations have been identified by management as an estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that we will drill all unbooked locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which we actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves or production.

ABBREVIATIONS

Oil		Natural Gas
bbl	barrel or barrels	AECO		Alberta benchmark price for natural gas
bbl/d	barrels per day	GJ		gigajoule
boe	barrel of oil equivalent	mcf		thousand cubic feet
boe/d	barrels of oil equivalent per day	mcf/d		thousand cubic feet per day
MSW	Mixed Sweet Blend	mmcf/d		million cubic feet per day
WTI	West Texas Intermediate
WCS	Western Canadian Select	Electricity
		MWh		Megawatt hour
API	American Petroleum institute	MWh/d		Megawatt hour per day

CONTACT

OBSIDIAN ENERGY
Suite 200, 207 – 9th Avenue SW, Calgary, Alberta T2P 1K3
Phone: 403-777-2500
Toll Free: 1-866-693-2707
Website: www.obsidianenergy.com;

Investor Relations:
Toll Free: 1-888-770-2633
E-mail: investor.relations@obsidianenergy.com

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