Obsidian Energy Announces Second Half 2025 Capital Program and Guidance
Calgary, Alberta–(July 10, 2025) – OBSIDIAN ENERGY LTD. (TSX: OBE) (NYSE American: OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to announce our second half 2025 capital plan and financial guidance that builds on the success of our first half 2025 program at Peace River and resumes drilling at Willesden Green.
Obsidian Energy Announces Second Half 2025 Capital Program and Guidance
“With the disposition of our Pembina asset during the second quarter, coupled with the recent tariff and OPEC+ induced commodity price volatility, we have adapted our approach to 2025 accordingly,” commented Stephen Loukas, Obsidian Energy’s President and CEO. “Post-disposition, due to our enhanced liquidity position as well as the continued discount that our shares trade to intrinsic-value, we have opted to moderate our near-term production growth via the reduction in capital expenditures and have chosen to drive growth in per-share metrics via incremental share buybacks. Moreover, during the second half we are extending infrastructure to our Open Creek field which will, upon completion, allow us to aggressively grow our Cardium and Belly River production volumes as market conditions improve. Furthermore, we plan on building an all-season road to our Nampa field that will bring ~200 barrels per day of currently shut-in oil back on production and enable pursuit of a full field development plan.”
Mr. Loukas continued, “Our disciplined level of spending will initially keep average production roughly flat to our post Pembina disposition of ~27,700 boe/d while building to ~29,000 boe/d as we exit 2025, with the option to further grow production during the first quarter of 2026 should market conditions prove conducive. Our second half program in Peace River is centred on key development fields in Harmon Valley South (“HVS“) and Dawson, following up on recent success in these areas. Initial drilling operations began in mid-June at HVS targeting the Bluesky. At Dawson we are furthering development in the heart of the field, where results in the Clearwater continue to exceed expectations. The second half of the year will also see us return to development at Willesden Green as we target the proven Cardium formation and continue to delineate the emerging Belly River play at both our Crimson and Open Creek fields. Lastly, regarding our ~33 percent share holding in InPlay Oil Corp. (“InPlay“), despite being subject to restrictions on the sale of our InPlay shares to third parties until October 7, 2025, we have had several third parties express interest in this position. We believe our significant InPlay position can ultimately be monetized at a premium to current trading levels, however, given that as part of our disposition transaction to InPlay we took back a slightly larger equity stake than we had originally contemplated due to market conditions, we intend to monetize ~10 percent of our InPlay share holdings, representing ~3.3 percent of InPlay’s total current shares outstanding through an exchange offer to Obsidian Energy shareholders located in the provinces and territories of Canada for common shares of InPlay later this month. This exchange offer provides a mechanism for the Company to buy back shares while allowing us to marginally reduce our InPlay holdings and providing additional optionality as we work through the further monetization of our position.”
SECOND HALF 2025 GUIDANCE
The Company plans between $110 and $120 million in capital expenditures plus an additional $13 to $15 million in decommissioning expenditures in the second half of 2025. Capital expenditures in the second half of 2025 are expected to be $62 million for Peace River and $52 million for Willesden Green. Included in our second half capital expenditures is approximately $8 million of waterflood capital and $10 million to pre-purchase production tanks at a price discount for our first quarter 2026 Peace River program. At our planned exit rate of ~29,000 boe/d, we estimate sustaining capital on a go forward basis will be approximately $180 million, excluding any incremental discretionary waterflood capital.
Second half 2025 capital expenditures represent a material reduction of approximately 33 percent from both our first half 2025 program and our second half program in 2024. Production is expected to average 27,700 boe/d in the second half of 2025, which is roughly flat to first half 2025 production, excluding the Pembina disposition that closed in April 2025 (the “Pembina Disposition“). Included in our second half production estimate is the impact of a planned turnaround at our non-operated Pembina Cardium Unit #11 field which is expected to reduce second half 2025 volumes by approximately 300 boe/d. Significantly lower capital expenditures have resulted in expected average production below the ~29,000 boe/d referenced in our May 7, 2025 press release, however we expect to reach this production level later in the second half of 2025.
Net operating costs improved in the second half of 2025, primarily driven by the Pembina Disposition, as those assets had a higher cost structure. General & administrative costs increased on a per boe basis in the second half due to our lower production base post the Pembina Disposition, as well as the decision to moderate production growth in the short-term.
Our second half 2025 guidance assumes commodity prices of US$65.00/bbl WTI, US$3.50/bbl MSW differential, US$11.50/bbl WCS differential, and $2.50/GJ AECO natural gas. Based on these assumptions, we anticipate funds flow from operations (“FFO“) of approximately $113 million with a net debt to FFO ratio of approximately 1.3 times (based on annualized second half FFO and not inclusive of the value of our InPlay shares) and prior to the NCIB.
Our second half guidance is presented below.
H2 2025E Guidance |
|||||||
Production1 | boe/d | 27,100 – 28,300 | |||||
% Oil and NGLs | % | 72 | |||||
Capital expenditures2 | $ millions | 110 – 120 | |||||
Decommissioning expenditures | $ millions | 13 – 15 | |||||
Net operating costs3 | $/boe | 13.45 – 14.35 | |||||
General & administrative | $/boe | 2.00- 2.10 | |||||
Based on midpoint of above guidance | |||||||
FFO3 | $ millions | 113 | |||||
FFO/share2,3 | $/share | 1.67 | |||||
FCF3 | $ millions | (16 | ) | ||||
FCF/share2,3 | $/share | (0.24 | ) | ||||
Net debt (prior to NCIB)3,4 | $ millions | 295 | |||||
Annualized net debt (prior to NCIB) to FFO3,5 | times | 1.3 | |||||
Pricing assumptions2 | |||||||
WTI | US$/bbl | 65.00 | |||||
Foreign Exchange Rate | CAD/USD | 1.36 | |||||
MSW Differential | US$/bbl | 3.50 | |||||
WCS Differential | US$/bbl | 11.50 | |||||
AECO | $/GJ | 2.50 |
Asset level information, based on midpoint of above guidance |
H2 2025E Guidance |
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Heavy Oil | |||||||
Average production | boe/d | 13,500 | |||||
Capital expenditures2 | $ millions | 62 | |||||
Net operating costs3 | $/boe | 17.40 | |||||
Netback3 | $/boe | 26.92 | |||||
Net operating income3 | $ millions | 67 | |||||
Asset level FCF | $ millions | 5 | |||||
Light Oil | |||||||
Average production | boe/d | 14,200 | |||||
Capital expenditures2 | $ millions | 52 | |||||
Net operating costs3 | $/boe | 10.60 | |||||
Netback3 | $/boe | 26.90 | |||||
Net operating income3 | $ millions | 70 | |||||
Asset level FCF | $ millions | 18 | |||||
(1) Refer to ‘Supplemental Production Disclosure’ below for details of production by product types. (2) Refer to “Budget Assumptions Information” below for further details. (3) See “Non-GAAP and Other Financial Measures” section below for further details. (4) Net debt figures do not include the impact of the 9.1 million InPlay Oil Corp. common shares, which were received as part of the Pembina disposition, valued at ~$87 million using a closing price of $9.50 on July 9, 2025. |
Estimated sensitivities to selected key assumptions on FFO for the second half of 2025 are as follows:
Guidance Sensitivity Table | |||||||
Variable | Range | Change in H2 2025E FFO ($ millions) |
|||||
WTI (US$/bbl) | +/- $1.00/bbl | 3.2 | |||||
Foreign Exchange Rate (CAD/USD) | +/- $0.01 | 1.4 | |||||
MSW light oil differential (US$/bbl) | +/- $1.00/bbl | 0.9 | |||||
WCS heavy oil differential (US$/bbl) | +/- $1.00/bbl | 1.3 | |||||
AECO ($/GJ) | +/- $0.25/GJ | 0.9 |
SECOND HALF 2025 CAPITAL AND OPERATING PROGRAM
The breakdown of operated wells expected to be rig released during the second half of 2025 is as follows:
Gross (Net) Wells | |||||||
H2 2025E | |||||||
DEVELOPMENT WELLS | |||||||
Heavy Oil Assets | |||||||
Peace River (Bluesky) | 2 (2.0 | ) | |||||
Peace River (Clearwater) | 18 (18.0 | ) | |||||
Light Oil Assets | |||||||
Willesden Green (Cardium) | 4 (4.0 | ) | |||||
Willesden Green (Belly River) | 3 (3.0 | ) | |||||
Willesden Green (Mannville) | 1 (1.0 | ) | |||||
TOTAL OPERATED WELLS1 | 28 (28.0 | ) |
(1)In addition, Obsidian Energy expects to participate in a total of six non-operated (2.7 net) wells in the second half of 2025.
HEAVY OIL ASSETS
Over the second half of 2025, the Company has planned $62 million of capital expenditures in Peace River, supporting average production of 13,500 boe/d, a 15 percent increase from the 11,728 boe/d in the second half of 2024.
Our second half 2025 Peace River drilling program is focused on our key development fields at HVS (Bluesky formation) and Dawson (Clearwater formation). After an exploration/appraisal focused first half 2025 program, approximately 70 percent of our second half program utilizes existing pads, which allows us to efficiently grow our production by targeting lower risk development areas.
- Clearwater Formation — The Dawson area remains a key focus for the Company with 18 (18.0 net) wells planned, representing 90 percent of our second half Peace River development program. We have recently commenced drilling with two rigs on existing pads and expect this field to continue its organic growth trajectory.
Our waterflood pilot on the Dawson 4-24 Pad continues to progress with all five (5.0 net) wells now on production including the two single-leg injector wells that are temporarily being produced prior to being converted to injection. The third development well on this pad was placed on production in mid-May and reported a 30-day initial production (“IP”) rate of 242 boe/d (100 percent oil).
- Bluesky Formation — In June, we commenced our two (2.0 net) well second half 2025 Bluesky development program on our 14-07 HVS Bluesky Pad, immediately offsetting our initial highly productive well. The first (1.0 net) well that was drilled on this pad, earlier in 2025, produced at a 30-day IP rate of 546 boe/d (100 percent oil).
LIGHT OIL ASSETS
The Company expects to return to development in our Willesden Green area in the second half of 2025 with a one-rig operated program. Primary activities include development and exploration/appraisal drilling in the Cardium, Belly River and Mannville formations combined with continued participation in a non-operated Pembina Cardium Unit #11 drilling program. Over the second half of 2025, the Company has planned $52 million of capital expenditures in our Light Oil assets, supporting average production of approximately 14,200 boe/d.
NT4


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